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- 1. Multiple Choice
A company would use a change fund if:
the owner wants to make a personal withdrawals easily.
they want to pay the postage expense without writing a check.
there are cash transactions daily.
None of these are correct.
- 2. Multiple Choice
The May bank statement for Accounting Services shows a balance of $6,300, but the balance per checkbook shows a cash balance of $7,980. Other information includes:
- A check for $200 to pay the electric bill was recorded on the checkbook as $20.
- Checks outstanding totaled $260.
- Included on the bank statement was a note collecting by the bank for $400 plus interest of $30.
- Bank service charges were $50.
- Deposit in transit were $2.140.
$8,180
$7,980
$9,810
$7,620
- 3. Multiple Choice
Cash Short and Over is:
A Misc Expense or Misc Revenue account depending on the balance in the account.
a Misc Expense account.
a Misc Revenue account.
Neither a Misc Expense or Misc Revenue.
- 4. Multiple Choice
Toree's Boutiques' cash register tape did not agree with the 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:
$404 debit to Cash and $404 credit to Sales
$400 debit to Cash and $400 credit to Sales
$404 debit to Cash; $4 to Cash Short/Over; and $400 credit to Sales.
$400 debit to Cash; $4 debit to Cash Short/Over; and $404 credit to Sales.
- 5. Multiple Choice
If the owner of Legal Services forgot to deduct a withdrawal from the balance per books, what entry would be necessary?
Debit Cash; credit Withdrawals
Debit Cash; credit Revenue
Debit Withdrawals; credit cash
Debit Revenue; credit Cash
- 6. Multiple Choice
A check is written and signed by the:
payee
drawer
payer
drawee
- 7. Multiple Choice
The replenishment of petty cash fund was recorded twice. This would cause:
petty cash to be understated.
expenses to be overstated.
expenses to be understated.
petty cash to be overstated.
- 8. Multiple Choice
The bank added another company's deposit to our account. This would be included on the bank reconciliation as a(n):
addition to the balance per bank.
subtraction from the balance per books.
addition to the balance per books.
subtraction from the balance per bank.
- 9. Multiple Choice
An example of electronic funds transfer is:
a transfer of funds without the use of paper checks.
a transfer of funds by writing a check.
the same as a deposit in transit.
All of these are correct.
- 10. Multiple Choice
Company policy for internal control should include all of the following except:
At time of payment, all supporting invoices or documents will be stamped "paid".
The owner (or responsible employee) signs all checks after receiving authorization to pay from the departments concerned.
Monthly bank statements should be sent to and reconciled by the same employee who authorize payment and write checks.
Employees will be rotated.
- 11. Multiple Choice
The bank would issue a credit memorandum to maria's Life Management when the bank:
received the deposits in transit.
Collects a note receivable from a customer.
Discovered a check that was deposited was returned for non sufficient funds.
None of these answers are correct.
- 12. Multiple Choice
Petty Cash is an liability shown on the balance sheet.
True
False
- 13. Multiple Choice
When the bank pays a check written by the company, it would:
debit the customer's bank account.
no increase or decrease is made to the company's bank account.
debit the cash account on the company's books.
credit the customer's bank account.
- 14. Multiple Choice
The entry to replenish a $300 petty cash fund, which has cash of $140 and valid receipts for $148, would include:
a credit to Cash for $160.
a debit to Petty Cash for $160.
a credit to Petty Cash for $148.
a credit to Cash for $148.
- 15. Multiple Choice
The journal entry to adjust the records from Nothin' But Organization bank reconciliation would include:
deposits in transit.
correction of any errors or omissions on the bank statement.
the total of outstanding checks.
notification from the bank of a customer's NSF check.
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