Question 1

A __________________ should be used to account for every payment from the fund.

Accepted Answer

A)  petty cash fund 
B)  petty cash voucher 
C)  petty cash signature card 
D)  none of the answers listed

Question 2

Which of the following is required by a bank to authorize the payment of a check made out to a business?

Accepted Answer

A)  The transfer of the check 
B)  The issue of the check 
C)  The acceptance of the check 
D)  The endorsement of the check

Question 3

Which of the following would be added to the bank statement balance when preparing a bank reconciliation?

Accepted Answer

A)  deposit in transits. 
B)  outstanding checks. 
C)  notes collected by the bank. 
D)  bank service charges.

Question 4

A business should make all payments by check, including payment from the Petty Cash Fund.

Accepted Answer

A) True 
 B)False

Question 5

How does a petty cash payments record differ from a general journal?

Accepted Answer

The answer of How does a petty cash payments record...

Question 6

The Petty Cash Fund balance of cash is the same as the balance in the general ledger Cash account.

Accepted Answer

A) True 
 B)False

Question 7

Petty cash payments do not need to be recorded separately in the general journal.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would be added to the ledger balance of cash when preparing a bank reconciliation?

Accepted Answer

A)  deposit in transits. 
B)  outstanding checks. 
C)  notes collected by the bank. 
D)  bank service charges.

Question 9

If the Petty Cash Fund is not replenished on the balance sheet date,

Accepted Answer

A)  income will be understated. 
B)  both assets and liabilities will be understated. 
C)  assets will be understated. 
D)  liabilities will be overstated. 
E)  both assets and income will be overstated.

Question 10

On June 1 of this year, Estes and Company established a Petty Cash Fund. The following petty cash transactions took place during the month, and the fund has $165.00 remaining at June 30.
 
Instructions:
1. Journalize the entry to establish the Petty Cash Fund in general journal.
2. Record the disbursements of petty cash in the petty cash payments record.
3. Journalize the summarizing entry to reimburse the Petty Cash Fund.

Accepted Answer

The answer of On June 1 of this year, Estes...

Question 11

The following bank reconciliation contains several errors.
?
Instructions:
Prepare a corrected bank reconciliation.

Accepted Answer

The answer of The following bank reconciliation contains several errors.
?
Instructions:
Prepare...

Question 12

Accompanying the bank statement is a debit memorandum for an NSF check for $120. This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)  addition to the bank statement balance. 
B)  deduction from the bank statement balance. 
C)  addition to the ledger balance of cash. 
D)  deduction from the ledger balance of cash. 
E)  addition to a revenue account.

Question 13

If cash amounts to $1,585, excluding the Change Fund, and the cash register tape shows cash sales of $1,570, then Cash Short and Over is credited for $15.

Accepted Answer

A) True 
 B)False

Question 14

A Petty Cash Fund established for a $250 balance had petty cash receipts totaling $219 and cash in the amount of $31. The entry to replenish the fund would include a

Accepted Answer

A)  credit to Petty Cash Fund for $219. 
B)  credit to Cash for $250. 
C)  debit to Petty Cash Fund for $219. 
D)  debit to the various accounts money was spent on for $219. 
E)  debit to Petty Cash Fund for $250.

Question 15

Raton Services cash count at the end of the day totals $3,120 and the cash register tape shows $3,025. The amount of the change fund is $100. Raton Services would record the revenue for the day as follows

Accepted Answer

A)  
$\text { Cash } \quad \$ 3,120$
$\text { Income from Services } \quad \$ 3,120$ 
B) 
$\begin{array} { l c } 
\text { Cash } & \$ 3,120 \
\text { Cash Short and Over } & \$ 5 \
\text { Income from Services } & \$ 3,125
\end{array}$ 
C) 
$\begin{array} { l l } 
\text { Cash } & \$ 3,025 \
\text { Income from Services } & \$ 3,025
\end{array}$ 
D)  
$\begin{array} { l c } 
\text { Cash } & \$ 3,020 \
\text { Cash Short and Over } & \$ 5 \
\text { Income from Services } & \$ 3,025
\end{array}$

Question 16

Match the terms below with the correct definitions.
-Cash fund used for making small, immediate cash payments

Accepted Answer

A) Petty Cash Fund 
B) Bank routing number 
C) Canceled checks 
D) Positive pay 
E) Payee
F)Petty cash payments record
G)Deposit slip
H)Endorsement
I)Change Fund
J)Petty cash voucher

Question 17

Which of the following represent good internal control procedures concerning cash receipts?

Accepted Answer

A)  Cash should be deposited only at the end of the month. 
B)  Cash receipts should be posted to the Accounts Receivable account at the end of the month. 
C)  Designate a specific employee to open mail, handle cash, and record the cash. 
D)  Endorse checks immediately upon receipt with the stamp, "For Deposit Only".

Question 18

Which of the following statements is correct concerning a Petty Cash Fund?

Accepted Answer

A)  When reimbursing the Petty Cash Fund, the Petty Cash Fund account would be debited. 
B)  If no change is made in the size of the fund, the Petty Cash Fund account is debited only when the fund is first established. 
C)  If the Petty Cash Fund amount is decreased, the Petty Cash Fund account would be debited. 
D)  The Petty Cash Fund is not listed on the financial statements.

Question 19

Match the terms below with the correct definitions.
-Checks issued by the writer that have been paid by the bank

Accepted Answer

A) Petty Cash Fund 
B) Bank routing number 
C) Canceled checks 
D) Positive pay 
E) Payee
F)Petty cash payments record
G)Deposit slip
H)Endorsement
I)Change Fund
J)Petty cash voucher

Question 20

Which of the following causes a cash shortage?

Accepted Answer

A)  A day's receipts are less than the cash register reading. 
B)  A day's receipts are more than the cash register reading. 
C)  A day's total sales is equal to the cash register reading. 
D)  A day's total sales is more than the cash register reading.

Exam 6: Bank Accounts, Cash Funds, and Internal Controls

A __________________ should be used to account for every payment from the fund.

Which of the following is required by a bank to authorize the payment of a check made out to a business?

Which of the following would be added to the bank statement balance when preparing a bank reconciliation?

A business should make all payments by check, including payment from the Petty Cash Fund.

How does a petty cash payments record differ from a general journal?

The Petty Cash Fund balance of cash is the same as the balance in the general ledger Cash account.

Petty cash payments do not need to be recorded separately in the general journal.

Which of the following would be added to the ledger balance of cash when preparing a bank reconciliation?

If the Petty Cash Fund is not replenished on the balance sheet date,

The following bank reconciliation contains several errors. ? Instructions: Prepare a corrected bank reconciliation.

Accompanying the bank statement is a debit memorandum for an NSF check for $120. This item would be included on the bank reconciliation as a(n)

If cash amounts to $1,585, excluding the Change Fund, and the cash register tape shows cash sales of $1,570, then Cash Short and Over is credited for $15.

A Petty Cash Fund established for a $250 balance had petty cash receipts totaling $219 and cash in the amount of $31. The entry to replenish the fund would include a

Raton Services cash count at the end of the day totals $3,120 and the cash register tape shows $3,025. The amount of the change fund is $100. Raton Services would record the revenue for the day as follows

Match the terms below with the correct definitions. -Cash fund used for making small, immediate cash payments

Which of the following represent good internal control procedures concerning cash receipts?

Which of the following statements is correct concerning a Petty Cash Fund?

Match the terms below with the correct definitions. -Checks issued by the writer that have been paid by the bank

Which of the following causes a cash shortage?