accounting chapter 22

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The change fund account is listed on the chart of accounts as an

asset

The petty cash fund account is an

asset account

A ___ is prepared to verify that the amount of cash in the drawer is equal to the total cash sales for the day plus the change fund cash

cash proof

A ___ consists of varying denominations of bills and coins and is used to make change in cash transactions

change fund

A ___ is usually used in retail stores such as supermarkets for making change for cash customers

change fund

Recorded a cash overage in the change fund

debit cash in bank, credit cash short and over

Decreased the change fund

debit cash in bank, credit change fund

Recorded a cash shortage in the petty cash fund

debit cash short and over, credit cash in bank

Established a change fund

debit change fund, credit cash in bank

Established a petty cash fund

debit petty cash fund, credit cash in bank

Increased the petty cash fund

debit petty cash fund, credit cash in bank

Replenished the petty cash fund; petty cash vouchers were for supplies, delivery expenses, and miscellaneous expenses

debit supplies, delivery expense, miscellaneous expense, credit cash in bank

A cash proof is prepared to verify that the amount of cash in the cash register drawer is equal to the total cash sales for the day

false

At the end of the fiscal period, the balance of the cash short and over account is closed directly into retained earnings

false

Cash overages are revenue and are recorded as credits to the sales account

false

Cash shortages are liabilities and are debited to the cash short and over account

false

Once a business establishes a petty cash fund for a set amount, the Internal Revenue Service does not permit the size of the fund to be changed

false

Replenishing the petty cash fund increases the fund's original balance

false

The change fund account is debited each time the fund is replenished

false

The entry to establish the petty cash fund is recorded in the cash payments journal

false

The petty cash register is considered an accounting journal because all amounts are posted from this register to general ledger accounts

false

Cash shortages or overages are recorded in the

general journal

Which of the following businesses would probably not have a change fund?

lawyer's office

If the change fund was established for $100 and there is $296 in cash receipts and the cash balance is $400, cash is said to be

over

A ___ is any payment made from the petty cash fund

petty cash disbursement

Any payment from the petty cash fund is called a ___

petty cash disbursement

Cash that is kept on hand by a business for making small, incidental cash payments is called a ___

petty cash fund

Many businesses use a ___ for paying small cash payments

petty cash fund

A ___ is a record of all disbursements made from the petty cash fund

petty cash register

All payments made from the petty cash fund are recorded in the ___

petty cash register

A ___ is a form prepared by the petty cashier to request cash for replenishing the petty cash fund

petty cash requisition

The form used for requesting money to replenish the petty cash fund is a ___

petty cash requisition

A ___ is a proof of payment from the petty cash fund

petty cash voucher

Every payment made from the petty cash fund be supported by a ___

petty cash voucher

The ___ is responsible for making payments from the petty cash fund

petty cashier

The person responsible for handling the petty cash fund is ___

petty cashier

In business, cash overages are

revenue

If the petty cash fund was established for $50 and there is $4 in cash with $45 in vouchers, cash is said to be ___

short

Cash short and over is classified as a

temporary account

Businesses that use a petty cash envelope for recording petty cash disbursements use a new petty cash envelope for each period's disbursements

true

Change funds are classified as assets and are listed directly below cash in bank in the chart of accounts

true

Sales clerks are usually required to sign the cash proof to indicate they have counted the cash in the drawer and verified its accuracy

true

Some businesses that have a petty cash fund do not use a petty cash register

true

The amount of cash sales for the day is taken from the cash register tape and entered on the cash proof form

true

The amounts paid out of the petty cash fund must be journalized and recorded in the appropriate general ledger accounts when the petty cash fund is replenished

true

The balance of the cash from the cash register drawer is deposited in the business's checking account after the cash in the cash register drawer is counted and the change fund is set aside

true

The purpose of a change fund is to enable the cashier using the cash register to have enough coins and currency to conduct business for the day

true

The sales clerk usually counts the cash in the drawer, verifies its accuracy, and signs the cash proof form

true

The size of the change fund does not change unless the business finds it needs more or less than its original estimate

true

The size of the petty cash fund is determined by the needs of the business

true

The size of the petty cash fund will not change unless the business finds that it needs more or less than its original estimate

true

The petty cash fund is replenished

when its balance reaches the minimum amount and at the end of the fiscal period

The petty cash fund account is debited

when the fund is established and when the amount of money in the fund is increased


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