Question 1

When a credit card is used to pay for a purchase the amount is deducted directly from your chequing account.

Accepted Answer

A) True 
 B)False

Question 2

Endorsing a cheque

Accepted Answer

A)  guarantees payment. 
B)  transfers the right to deposit or transfer cash. 
C)  cancels the transaction. 
D)  All of these answers are correct. 
A)  guarantees payment. 
B)  transfers the right to deposit or transfer cash. 
C)  cancels the transaction. 
D)  All of these answers are correct.

Question 3

Information to calculate the adjusted cash balance for Everest Climbing Gear is as follows: Cash balance per general ledger $4,000
Customer's cheque returned--NSF 150
Bank service charges 80
Deposits in transit 1,000
Outstanding cheques 1,400
Customer's note collected by bank 1,290

Accepted Answer

A)  $4,660 
B)  $4,860 
C)  $5,060 
D)  $5,260 
A)  $4,660 
B)  $4,860 
C)  $5,060 
D)  $5,260

Question 4

The entry to establish the petty cash fund debited Misc. Expense. This would cause

Accepted Answer

A)  revenues to be overstated. 
B)  revenues to be understated. 
C)  expenses to be overstated. 
D)  expenses to be understated. 
A)  revenues to be overstated. 
B)  revenues to be understated. 
C)  expenses to be overstated. 
D)  expenses to be understated.

Question 5

Change Fund ________ ________ ________ ________

Accepted Answer

Change Fun

Question 6

Company policy for internal control should include all of the following EXCEPT

Accepted Answer

A)  employees will be rotated through a variety of assignments. 
B)  all cheques are signed by the owner (or responsible employee) after receiving authorization to pay from the departments concerned. 
C)  at time of payment, all supporting invoices or documents will be stamped "paid." 
D)  one employee should have the total responsibility for approving purchases, authorizing payments, and signing cheques. 
A)  employees will be rotated through a variety of assignments. 
B)  all cheques are signed by the owner (or responsible employee) after receiving authorization to pay from the departments concerned. 
C)  at time of payment, all supporting invoices or documents will be stamped "paid." 
D)  one employee should have the total responsibility for approving purchases, authorizing payments, and signing cheques.

Question 7

Indicate what effect each situation will have on the bank reconciliation process. Place the number of your choice beside the items listed.
1. Add to bank balance
2. Deduct from bank balance
3. Add to chequebook balance
4. Deduct from chequebook balance
________ a. Deposit in transit
________ b. Bank service charge
________ c. NSF cheque
________ d. Cheque written for $98 recorded as $89
________ e. Outstanding cheques
________ f. Cheque written for $50 recorded as $500
________ g. Cheque printing charges
________ h. Interest earned on chequing account

Accepted Answer

a. 1
b. 4

Question 8

Deposits not yet added into the bank balance are called

Accepted Answer

A)  deposits in transit. 
B)  late deposits. 
C)  deposits on hold. 
D)  outstanding deposits. 
A)  deposits in transit. 
B)  late deposits. 
C)  deposits on hold. 
D)  outstanding deposits.

Question 9

Cash Short and Over is

Accepted Answer

A)  a Misc. Expense account. 
B)  a Misc. Revenue account. 
C)  a Misc. Expense or Misc. Revenue account depending on the balance in the account. 
D)  neither a Misc. Expense nor Misc. Revenue. 
A)  a Misc. Expense account. 
B)  a Misc. Revenue account. 
C)  a Misc. Expense or Misc. Revenue account depending on the balance in the account. 
D)  neither a Misc. Expense nor Misc. Revenue.

Question 10

Which of the following transactions would most likely NOT be recorded in an auxiliary petty cash record?

Accepted Answer

A)  Purchase of first aid supplies 
B)  Purchase of postage stamps 
C)  Payment on a $700 utility bill 
D)  Payment of gas for the company vehicle 
A)  Purchase of first aid supplies 
B)  Purchase of postage stamps 
C)  Payment on a $700 utility bill 
D)  Payment of gas for the company vehicle

Question 11

The entry to establish the petty cash fund was not completed. This would cause

Accepted Answer

A)  cash to be understated. 
B)  cash to be overstated. 
C)  assets to be understated. 
D)  assets to be overstated. 
A)  cash to be understated. 
B)  cash to be overstated. 
C)  assets to be understated. 
D)  assets to be overstated.

Question 12

The drawer writes the cheque.

Accepted Answer

A) True 
 B)False

Question 13

The journal entry to adjust the records from Nothin' But Organization bank reconciliation would include

Accepted Answer

A)  the total of outstanding cheques. 
B)  deposits in transit. 
C)  notification from the bank of a customer's NSF cheque. 
D)  correction of any errors or omissions on the bank statement. 
A)  the total of outstanding cheques. 
B)  deposits in transit. 
C)  notification from the bank of a customer's NSF cheque. 
D)  correction of any errors or omissions on the bank statement.

Question 14

If a cheque marked NSF is returned from the bank, an adjusting entry crediting cash is needed.

Accepted Answer

A) True 
 B)False

Question 15

Prepare journal entries for the following petty cash fund transactions:
Sept. 1 Established a $100 petty cash fund.
30 Replenished the petty cash fund. Currency and coins remaining was $28;
approved paid vouchers were: $12 donation expense; $18 postage; $24 office
supplies expense; and $26 miscellaneous expense.

Accepted Answer

Date Transaction PR Debit Cred

Question 16

Which of the following transactions would be recorded in an auxiliary petty cash record?

Accepted Answer

A)  Purchase of first aid supplies 
B)  Payment of Salaries Expense 
C)  Owner Withdrawal 
D)  Purchase of a $20,000 piece of Equipment 
A)  Purchase of first aid supplies 
B)  Payment of Salaries Expense 
C)  Owner Withdrawal 
D)  Purchase of a $20,000 piece of Equipment

Question 17

The drawee of the cheque is the person receiving the money.

Accepted Answer

A) True 
 B)False

Question 18

Produce the entry to replenish petty cash using the following information:
Cash in box $25
Balance of petty cash account 200
Valid receipts in box
Postage 45
Office Supplies 60
Withdrawals by owner 50
Invoice from courier 20

Accepted Answer

Postage expense 45
O

Question 19

Indicate which adjustments would require a journal entry during the completion of the bank reconciliation. Place an "X" on the respective line(s).
________ a. Deposit in transit
________ b. Bank service charge
________ c. NSF cheque
________ d. Cheque written for $19 recorded as $91
________ e. Outstanding cheques
________ f. Cheque written for $42 recorded as $4
________ g. Cheque printing charge
________ h. Note collected by bank.

Accepted Answer

_________ a. Deposit in transit
____X___

Question 20

The journal entry to reverse the entry of a customer's nonsufficient funds cheque would include a

Accepted Answer

A)  debit to Cash. 
B)  credit to Cash. 
C)  debit to Accounts Payable. 
D)  credit to Accounts Receivable. 
A)  debit to Cash. 
B)  credit to Cash. 
C)  debit to Accounts Payable. 
D)  credit to Accounts Receivable.

When a credit card is used to pay for a purchase the amount is deducted directly from your chequing account.

Endorsing a cheque

Information to calculate the adjusted cash balance for Everest Climbing Gear is as follows: Cash balance per general ledger $4,000 Customer's cheque returned--NSF 150 Bank service charges 80 Deposits in transit 1,000 Outstanding cheques 1,400 Customer's note collected by bank 1,290

The entry to establish the petty cash fund debited Misc. Expense. This would cause

Change Fund

Company policy for internal control should include all of the following EXCEPT

Deposits not yet added into the bank balance are called

Cash Short and Over is

Which of the following transactions would most likely NOT be recorded in an auxiliary petty cash record?

The entry to establish the petty cash fund was not completed. This would cause

The drawer writes the cheque.

The journal entry to adjust the records from Nothin' But Organization bank reconciliation would include

If a cheque marked NSF is returned from the bank, an adjusting entry crediting cash is needed.

Which of the following transactions would be recorded in an auxiliary petty cash record?

The drawee of the cheque is the person receiving the money.

Produce the entry to replenish petty cash using the following information: Cash in box $25 Balance of petty cash account 200 Valid receipts in box Postage 45 Office Supplies 60 Withdrawals by owner 50 Invoice from courier 20

The journal entry to reverse the entry of a customer's nonsufficient funds cheque would include a

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters

Exam 8: Banking Procedures and Control of Cash

When a credit card is used to pay for a purchase the amount is deducted directly from your chequing account.

Endorsing a cheque

Information to calculate the adjusted cash balance for Everest Climbing Gear is as follows: Cash balance per general ledger $4,000 Customer's cheque returned--NSF 150 Bank service charges 80 Deposits in transit 1,000 Outstanding cheques 1,400 Customer's note collected by bank 1,290

The entry to establish the petty cash fund debited Misc. Expense. This would cause

Change Fund ________ ________ ________ ________

Company policy for internal control should include all of the following EXCEPT

Deposits not yet added into the bank balance are called

Cash Short and Over is

Which of the following transactions would most likely NOT be recorded in an auxiliary petty cash record?

The entry to establish the petty cash fund was not completed. This would cause

The drawer writes the cheque.

The journal entry to adjust the records from Nothin' But Organization bank reconciliation would include

If a cheque marked NSF is returned from the bank, an adjusting entry crediting cash is needed.

Which of the following transactions would be recorded in an auxiliary petty cash record?

The drawee of the cheque is the person receiving the money.

Produce the entry to replenish petty cash using the following information: Cash in box $25 Balance of petty cash account 200 Valid receipts in box Postage 45 Office Supplies 60 Withdrawals by owner 50 Invoice from courier 20

The journal entry to reverse the entry of a customer's nonsufficient funds cheque would include a

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters

Change Fund