Question 1

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.E) All of the above
F) C) and D)

Question 2

At the end of the fiscal period, the Cash Short and Over account has a credit balance. This amount would be

Accepted Answer

A)   included as part of Miscellaneous Income on the Income Statement.
B)   included as part of Miscellaneous Expense on the Income Statement.
C)   shown as a separate account on the Balance Sheet.
D)   none of the answers listed.E) All of the above
F) C) and D)

Question 3

The system of policies and procedures that a company sets to protect its assets are known as:

Accepted Answer

A)   a lockbox system.
B)   critical control system.
C)   a reconciliation system.
D)   a standard system.
E)   internal control system.F) A) and E)
G) B) and E)

Question 4

A bank will accept a check made out to a business without an endorsement.

Accepted Answer

A) True 
 B)False

Question 5

If the Cash Short and Over account has a debit balance at the end of a month, it indicates a net shortage.

Accepted Answer

A) True 
 B)False

Question 6

A check written for $68.30 in payment of an account was recorded on the books as $86.30. On a bank reconciliation, this will appear as a(n)

Accepted Answer

A)   addition to the bank balance for $18.
B)   deduction from the bank balance for $18.
C)   addition to the ledger balance for $18.
D)   deduction from the ledger balance for $18.
E)   addition to the bank balance of $36.F) None of the above
G) A) and B)

Question 7

On a bank statement, a deposit of $402 was recorded as $204. The difference of $198 should be treated as a(n)

Accepted Answer

A)   deduction from the ledger balance of cash.
B)   addition to the bank statement balance.
C)   deduction from the bank statement balance.
D)   addition to the ledger balance of cash.
E)   addition to the Sales account.F) A) and B)
G) A) and E)

Question 8

The person to whom a check is drawn is referred to as the payee.

Accepted Answer

A) True 
 B)False

Question 9

The amount on the cash register tape indicates the revenue earned, and the cash count will always agree with it.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would be subtracted from 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.E) B) and C)
F) A) and B)

Question 11

A check issued to a creditor in the amount of $35 was recorded in the journal as $350. In the bank reconciliation, the correction would be recorded as a(n)

Accepted Answer

A)   deduction from the bank statement balance.
B)   addition to the bank statement balance.
C)   deduction from the ledger balance of cash.
D)   addition to the ledger balance of cash.
E)   addition to a revenue account.F) None of the above
G) C) and D)

Question 12

B. Hallonon shows a balance in her Cash account of $360, but the bank statement just received shows a balance of $460. The difference of $100 may be caused by

Accepted Answer

A)   an NSF check for $100.
B)   an outstanding check for $100.
C)   a debit memo for $100.
D)   a deposit in transit of $100.
E)   interest income of $50.F) B) and C)
G) C) and D)

Question 13

Match the terms below with the correct definitions.
-Number used by the Federal Reserve Bank to identify the financial institution

Accepted Answer

A)  Petty Cash Fund
B)  Bank routing number
C)  Canceled checks
D)  Positive pay
E)  PayeeF) Petty cash payments recordG) Deposit slipH) EndorsementI) Change FundJ) Petty cash voucherK) D) and E)
L) All of the above

Question 14

Broomfield Services cash count at the end of the day totals $1,230 and the cash register tape shows $1,120. The amount of the change fund is $100. What is the amount of the cash shortage or overage?

Accepted Answer

A)   $110 cash overage
B)   $10 cash shortage
C)   $210 cash shortage
D)   none of the answers listed.E) A) and B)
F) A) and C)

Question 15

A deposit in transit has been recorded by the company but not by the bank.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Explain why internal control is an important aspect of an accounting system, providing at least two specific examples that would be in the policies and procedures of internal control.

Accepted Answer

A very important aspect of any financial...

Question 18

The bank statement will show

Accepted Answer

A)   the beginning bank balance.
B)   the balance on deposit at the end of the month.
C)   any deductions from the bank statement balance.
D)   the amounts of checks paid during the month.
E)   all of these.F) A) and D)
G) A) and E)

Question 19

Which of the following is the journal entry to record a NSF (non-sufficient funds)  check received from a customer?

Accepted Answer

A)   Debit to Accounts Receivable and a credit to Cash
B)   Debit to Sales Expense and a credit to Accounts Payable
C)   Debit to Bad Debts and a credit to Other Income
D)   Debit to Payments and a credit to Cash
E)   Debit to Cash and a credit to Accounts PayableF) B) and C)
G) A) and E)

Question 20

Which of the following gives a bank a copy of the official signatures of any persons authorized to sign checks?

Accepted Answer

A)   A loan statement
B)   A signature card
C)   A visiting card
D)   A memo statement
E)   A payee cardF) B) and C)
G) A) and E)

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

A check written for $68.30 in payment of an account was recorded on the books as $86.30. On a bank reconciliation, this will appear as a(n)

Correct AnswerverifiedShow Answer

A deposit in transit has been recorded by the company but not by the bank.

Correct AnswerverifiedShow Answer

Which of the following is the journal entry to record a NSF (non-sufficient funds) check received from a customer?

Correct AnswerverifiedShow Answer

B. Hallonon shows a balance in her Cash account of $360, but the bank statement just received shows a balance of $460. The difference of $100 may be caused by

Correct AnswerverifiedShow Answer

Which of the following gives a bank a copy of the official signatures of any persons authorized to sign checks?

Correct AnswerverifiedShow Answer

The person to whom a check is drawn is referred to as the payee.

Correct AnswerverifiedShow Answer

At the end of the fiscal period, the Cash Short and Over account has a credit balance. This amount would be

Correct AnswerverifiedShow Answer

The system of policies and procedures that a company sets to protect its assets are known as:

Correct AnswerverifiedShow Answer

If the Cash Short and Over account has a debit balance at the end of a month, it indicates a net shortage.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

On a bank statement, a deposit of $402 was recorded as $204. The difference of $198 should be treated as a(n)

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Which of the following would be subtracted from the ledger balance of cash when preparing a bank reconciliation?

Correct AnswerverifiedShow Answer

The bank statement will show

Correct AnswerverifiedShow Answer

A check issued to a creditor in the amount of $35 was recorded in the journal as $350. In the bank reconciliation, the correction would be recorded as a(n)

Correct AnswerverifiedShow Answer

Explain why internal control is an important aspect of an accounting system, providing at least two specific examples that would be in the policies and procedures of internal control.

Correct AnswerverifiedA very important aspect of any financial...View AnswerShow Answer

Broomfield Services cash count at the end of the day totals $1,230 and the cash register tape shows $1,120. The amount of the change fund is $100. What is the amount of the cash shortage or overage?

Correct AnswerverifiedShow Answer

Match the terms below with the correct definitions. -Number used by the Federal Reserve Bank to identify the financial institution

Correct AnswerverifiedShow Answer

A bank will accept a check made out to a business without an endorsement.

Correct AnswerverifiedShow Answer

The amount on the cash register tape indicates the revenue earned, and the cash count will always agree with it.

Correct AnswerverifiedShow Answer

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A very important aspect of any financial...
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