Question 1

Which of the following would require a journal entry after the bank reconciliation has been prepared?

Accepted Answer

A)  deposit in transits.
B)  outstanding checks.
C)  notes collected by the bank.
D)  none of the answers listed. C

Question 2

A person authorized to write checks drawn on a checking account at a bank must sign and have on file with the bank a

Accepted Answer

A)  deposit ticket.
B)  signature card.
C)  bank statement.
D)  bank reconciliation.
E)  payee card. B

Question 3

Henry Co. establishes a Petty Cash Fund of $150. The journal entry to establish the fund would be:

Accepted Answer

A)  Petty Cash Fund $150Cash $150
B)  Cash $150Petty Cash Fund $150
C)  Supplies Expense $150Cash $150
D)  none of the answers listed. A

Question 4

When reimbursing the Petty Cash Fund, the journal entry would involve a

Accepted Answer

A)  debit to Petty Cash Fund.
B)  credit to Petty Cash Fund.
C)  debit to Cash.
D)  credit to Cash.

Question 5

A special fund maintained to pay relatively small amounts for expenses, assets, or withdrawals is called a Petty Cash Fund.

Accepted Answer

A) True 
 B)False

Question 6

Frank Delivery Services establishes a Change Fund of $100. At the end of the day, Frank Delivery Services had $1,230 on hand. The journal entry to record the day's receipts would include a

Accepted Answer

A)  debit to Change Fund.
B)  credit to Income from Services.
C)  debit to Petty Cash Fund.
D)  none of the answers listed.

Question 7

A bank service charge appears on a bank reconciliation as a(n)

Accepted Answer

A)  deduction from the ledger balance.
B)  addition to the bank balance.
C)  addition to the book balance.
D)  deduction from the bank balance.
E)  A bank service charge does not appear on a bank reconciliation statement.

Question 8

The amount of cash appearing on the November 30 balance sheet is the amount

Accepted Answer

A)  reported on the November 30 bank statement.
B)  shown as the adjusted balance on the bank reconciliation statement.
C)  of cash added to the book balance on the bank reconciliation.
D)  of cash deducted from the book balance on the book reconciliation.
E)  reported on the October 31 bank statement.

Question 9

The entry to reimburse the Petty Cash Fund includes a

Accepted Answer

A)  credit to Petty Cash Fund.
B)  debit to Cash.
C)  credit to Accounts Payable.
D)  debit to Petty Cash Fund.
E)  debit to various accounts upon which the money was spent.

Question 10

If cash amounts to $1,419, excluding the Change Fund, and the cash register tape shows cash sales of $1,425, then Cash Short and Over is credited for $6.

Accepted Answer

A) True 
 B)False

Question 11

The three parties to a check are the

Accepted Answer

A)  bank, payee, and the IRS.
B)  bank, maker, and payor.
C)  signer, depositor, and endorser.
D)  drawer, payee, and bank.
E)  drawer, payor, and drawee.

Question 12

A depositor's Cash account is carried on the books of the bank as

Accepted Answer

A)  revenue.
B)  an owner's equity account.
C)  a contra asset.
D)  an asset.
E)  a liability.

Question 13

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 14

A check that is outstanding for two consecutive months should be included on the bank reconciliation for the first month only.

Accepted Answer

A) True 
 B)False

Question 15

Internal control is the system of policies and procedures that is designed to:

Accepted Answer

A)  protect assets against fraud and waste.
B)  provide for accurate accounting data.
C)  promote efficient operation.
D)  encourage adherence to management policies.
E)  all of the answers listed.

Question 16

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 using page 9.
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 17

When a Petty Cash Fund is established, Cash is debited and Petty Cash Fund is credited.

Accepted Answer

A) True 
 B)False

Question 18

In a bank reconciliation, a $400 NSF check is

Accepted Answer

A)  deducted from the ledger balance.
B)  added to the ledger balance.
C)  deducted from the bank balance.
D)  added to the bank balance.
E)  ignored.

Question 19

A __________________ is a record indicating the amount of each petty cash voucher, the accounts to which it should be charged, and the purpose of the expenditure.

Accepted Answer

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

Question 20

The bank reconciliation for Stuart Co. shows a $1,000 note collected by the bank from customer, A. Randall. The journal entry to record this item would involve a

Accepted Answer

A)  debit to cash.
B)  credit to Accounts Receivable.
C)  debit to Notes Receivable.
D)  none of the answers listed.

Exam 6: Bank Accounts and Cash Funds

Which of the following would require a journal entry after the bank reconciliation has been prepared?

A person authorized to write checks drawn on a checking account at a bank must sign and have on file with the bank a

Henry Co. establishes a Petty Cash Fund of $150. The journal entry to establish the fund would be:

When reimbursing the Petty Cash Fund, the journal entry would involve a

A special fund maintained to pay relatively small amounts for expenses, assets, or withdrawals is called a Petty Cash Fund.

Frank Delivery Services establishes a Change Fund of $100. At the end of the day, Frank Delivery Services had $1,230 on hand. The journal entry to record the day's receipts would include a

A bank service charge appears on a bank reconciliation as a(n)

The amount of cash appearing on the November 30 balance sheet is the amount

The entry to reimburse the Petty Cash Fund includes a

If cash amounts to $1,419, excluding the Change Fund, and the cash register tape shows cash sales of $1,425, then Cash Short and Over is credited for $6.

The three parties to a check are the

A depositor's Cash account is carried on the books of the bank as

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

A check that is outstanding for two consecutive months should be included on the bank reconciliation for the first month only.

Internal control is the system of policies and procedures that is designed to:

When a Petty Cash Fund is established, Cash is debited and Petty Cash Fund is credited.

In a bank reconciliation, a $400 NSF check is

A __________________ is a record indicating the amount of each petty cash voucher, the accounts to which it should be charged, and the purpose of the expenditure.

The bank reconciliation for Stuart Co. shows a $1,000 note collected by the bank from customer, A. Randall. The journal entry to record this item would involve a