Question 1

A signature card shows the signature of only the person who authorizes others in the company to sign checks.

Accepted Answer

A) True 
 B)False

Question 2

A restrictive endorsement on a check:

Accepted Answer

A) can be further endorsed by someone else. 
B) is the safest endorsement for businesses. 
C) permits the bank to use its best judgment. 
D) must be endorsed by the company president. 
A) can be further endorsed by someone else. 
B) is the safest endorsement for businesses. 
C) permits the bank to use its best judgment. 
D) must be endorsed by the company president.

Question 3

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 checkbook balance
4.Deduct from checkbook balance
________ a.deposit in transit
________ b.bank service charge
________ c.NSF check
________ d.Check written for $95 recorded on the company's ledger as $59
________ e.Outstanding checks
________ f.Check written for $80 recorded as $800
________ g.Check printing charges
________ h.Interest earned on checking account

Accepted Answer

a.1,b.4,c.

Question 4

The replenishment of the petty cash fund was recorded twice.This would cause:

Accepted Answer

A) expenses to be overstated. 
B) expenses to be understated. 
C) petty cash to be overstated. 
D) petty cash to be understated. 
A) expenses to be overstated. 
B) expenses to be understated. 
C) petty cash to be overstated. 
D) petty cash to be understated.

Question 5

A blank endorsement on a check:

Accepted Answer

A) can be further endorsed by someone else. 
B) cannot be further endorsed by someone else. 
C) is the safest type of endorsement. 
D) permits only the original endorser to get the money. 
A) can be further endorsed by someone else. 
B) cannot be further endorsed by someone else. 
C) is the safest type of endorsement. 
D) permits only the original endorser to get the money.

Question 6

Determine the cash shortage given the following:
The balance per the petty cash account $200
The count of coin and currency amounts to $120
There are receipts: for telephone costs of $25,for supplies of $6,for transportation $6,for funeral flowers $38
$ ________

Accepted Answer

$5 short [

Question 7

An example of an internal control is:

Accepted Answer

A) the use of bank account. 
B) all checks are prenumbered. 
C) all checks written must have reference source documents. 
D) All of these answers are correct. 
A) the use of bank account. 
B) all checks are prenumbered. 
C) all checks written must have reference source documents. 
D) All of these answers are correct.

Question 8

Prepare journal entries for the following petty cash fund transactions:

Accepted Answer

The answer of Prepare journal entries for the following petty...

Question 9

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 10

________ Bought Supplies on account

Accepted Answer

The answer of ________ Bought Supplies on account...

Question 11

An error,on the company's books,in recording a $72 deposit as $27 would be included on the bank reconciliation as a(n):

Accepted Answer

A) addition to the balance per bank. 
B) subtraction from the balance per bank. 
C) addition to the balance per books. 
D) subtraction from the balance per books. 
A) addition to the balance per bank. 
B) subtraction from the balance per bank. 
C) addition to the balance per books. 
D) subtraction from the balance per books.

Question 12

The change fund is what type of account?

Accepted Answer

A) Expense 
B) Contra-asset 
C) Asset 
D) Liability 
A) Expense 
B) Contra-asset 
C) Asset 
D) Liability

Question 13

A payment for $46 is incorrectly recorded on the checkbook stub as $64.The $18 error should be shown on the bank reconciliation as:

Accepted Answer

A) added to the balance per bank statement. 
B) deducted from the balance per bank statement. 
C) added to the balance per books. 
D) deducted from the balance per books. 
A) added to the balance per bank statement. 
B) deducted from the balance per bank statement. 
C) added to the balance per books. 
D) deducted from the balance per books.

Question 14

The normal balance of the Petty Cash account is a credit.

Accepted Answer

A) True 
 B)False

Question 15

For each of the following,identify in Column 1 the category to which the account belongs,in Column 2 the normal balance for the account,in Column 3 the financial statement on which the account balance is reported,and in Column 4 the nature of the account (permanent/temporary).
Example:
  
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Petty Cash } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following,identify in Column...

Question 16

For each of the following,identify in Column 1 the category to which the account belongs,in Column 2 the normal balance for the account,in Column 3 the financial statement on which the account balance is reported,and in Column 4 the nature of the account (permanent/temporary).
Example:
  
-

Accepted Answer

The answer of For each of the following,identify in Column...

Question 17

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts.The facts are: total cash register tapes $400;total coins and currency $404.The summary journal entry to record the day's transactions would include a:

Accepted Answer

A) $400 debit to Cash;$4 debit to Cash Short and Over;and $404 credit to Service Revenue. 
B) $404 debit to Cash;$4 credit to Cash Short and Over;and $400 credit to Service Revenue. 
C) $404 debit to Cash and $404 credit to Service Revenue. 
D) $400 debit to Cash and $400 credit to Service Revenue. 
A) $400 debit to Cash;$4 debit to Cash Short and Over;and $404 credit to Service Revenue. 
B) $404 debit to Cash;$4 credit to Cash Short and Over;and $400 credit to Service Revenue. 
C) $404 debit to Cash and $404 credit to Service Revenue. 
D) $400 debit to Cash and $400 credit to Service Revenue.

Question 18

Any adjustment to the depositor's records because of an item on the bank statement does not require a journal entry.

Accepted Answer

A) True 
 B)False

Question 19

The Petty Cash account should never be debited when the fund is replenished.

Accepted Answer

A) True 
 B)False

Question 20

On a bank reconciliation,outstanding checks are deducted from the balance per the bank.

Accepted Answer

A) True 
 B)False

Exam 6: Banking Procedure and Control of Cash

A signature card shows the signature of only the person who authorizes others in the company to sign checks.

A restrictive endorsement on a check:

The replenishment of the petty cash fund was recorded twice.This would cause:

A blank endorsement on a check:

Determine the cash shortage given the following: The balance per the petty cash account $200 The count of coin and currency amounts to $120 There are receipts: for telephone costs of $25,for supplies of $6,for transportation $6,for funeral flowers $38 $ ________

An example of an internal control is:

Prepare journal entries for the following petty cash fund transactions:

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

________ Bought Supplies on account

An error,on the company's books,in recording a $72 deposit as $27 would be included on the bank reconciliation as a(n):

The change fund is what type of account?

A payment for $46 is incorrectly recorded on the checkbook stub as $64.The $18 error should be shown on the bank reconciliation as:

The normal balance of the Petty Cash account is a credit.

For each of the following,identify in Column 1 the category to which the account belongs,in Column 2 the normal balance for the account,in Column 3 the financial statement on which the account balance is reported,and in Column 4 the nature of the account (permanent/temporary). Example: -

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts.The facts are: total cash register tapes $400;total coins and currency $404.The summary journal entry to record the day's transactions would include a:

Any adjustment to the depositor's records because of an item on the bank statement does not require a journal entry.

The Petty Cash account should never be debited when the fund is replenished.

On a bank reconciliation,outstanding checks are deducted from the balance per the bank.

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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