Accounting chapter 8

The following information is available for Juno Company for the month ending June​ 30, 2025. ​* Balance as per the bank statement is $12,000. ​* Balance as per books is $10,200. ​* Check​ #506 for $1,000 and check​ #510 for $700 were not shown on the June​ 30, bank statement. ​* A deposit in transit of $1,746 had not been received by the bank when the bank statement was generated. ​* A bank debit memo indicated an NSF check for $80 written by Jane Smith to Juno Company on June 13. ​* A bank credit memo indicated a note collected by the bank of $1,900 and interest revenue of $51 on June 20. ​* The bank statement indicated service charges of $25. What is the adjusted book​ balance?

$12,046

A company has a petty cash fund amount of $500. When​ replenished, it has petty cash tickets of $31 for gas​ expense, $23 for postage​ expense, $134 for supplies​ expense, and $110 for miscellaneous expenses. Assume there is no shortage or overage. In the journal​ entry, Cash would be credited for​ ________.

$298

A company has a petty cash fund amount of $500. When​ replenished, it has petty cash tickets of $31 for gas​ expense, $29 for postage​ expense, $161 for supplies​ expense, and $111 for miscellaneous expenses. Upon comparing receipts with the​ cash, it was determined that the Petty Cash fund was short by $16. In the journal​ entry, Cash would be credited for​ ________.

$348

A company received a bank statement with a balance of $6,400. Reconciling items included a bookkeeper error of $300—a $300 check recorded as $700—two outstanding checks totaling $830​, a service charge of $23​, a deposit in transit of $250​, and interest revenue of $20. What is the adjusted bank​ balance?

$5,820

The following information is available for​ Ellen's Fashions, Inc. for the current month. Book balance end of month $7,000 Outstanding checks 650 Deposits in transit 4,500 Service charges 110 Interest revenue 40 What is the adjusted book balance on the bank​ reconciliation?

$6,930

Which of the following statements is​ correct?

A bank statement is a document from the bank that reports the activity in the​ customer's account.

Mercury Company established a petty cash fund with a $200 balance. Which of the following statements is​ incorrect?

A journal entry is needed to debit the Cash account and credit the Petty Cash account for $200.

​Roberts, Inc., a​ retailer, accepts payment through credit cards. During​ July, credit card sales amounted to $115,000. The processor charges a 3​% fee. What is the correct journal entry or entries for credit card sales assuming the gross​ method?

Cash 115,000 Sales Revenue 115,000 Credit Card Expense 3,450 Cash 3,450

The bookkeeper of Wilson Electric​ Supply, Inc. recorded a $1,553 check as $15,530 in payment of the current​ month's rent. Which of the following journal entries is needed to adjust for this error in the books of the​ company?

Cash 13,977 Rent Expense 13,977

​Conner, Inc., a​ retailer, accepts payment through credit cards. During​ August, credit card sales amounted to $140,000. The processor charges a 3​% fee. What is the correct journal entry or entries for credit card sales assuming the net​ method?

Cash 135,800 Credit Card Expense 4,200 Sales Revenue 140,000

​Callie, Inc., a​ retailer, accepts payment through credit cards. During​ August, credit card sales amounted to $190,000. The processor charges a 3​% fee. What is the correct journal entry or entries for credit card sales using the gross​ method?

Cash 190,000 Sales Revenue 190,000 Credit Card Expense 5,700 Cash 5,700

The petty cash fund has a current balance of $100​, which is the established fund balance. Based on activity in the​ fund, it is determined that the balance needs to be changed to $550. Which journal entry is needed to make this​ change?

Debit the Petty Cash account and credit the Cash account for $450.

Which of the following statements describes a receiving​ report?

It is a report showing that the goods have been received in good​ condition, as ordered.

Which of the following statements describes a purchase​ order?

It is an order to purchase goods from a supplier.

Which one of the following is true of the bank​ reconciliation?

It should not be prepared by an employee who handles cash transactions.

Which one of the following is true of a signature​ card?

It shows each authorized​ person's signature for a bank account.

Which of the following is true of internal​ control?

One of the major purposes of internal control is to ensure that the assets are safeguarded

Which of the following is the last step in the daily control over cash receipts by​ mail?

The controller compares the records of the​ day's bank deposit amount from the treasurer and the debit to Cash from the accounting department.

Which of the following is included in the internal control procedure—​documents?

The invoices and orders must be pre−numbered.

Which of the following is NOT an appropriate internal control for cash receipts over the​ counter?

The store clerk deposits the cash in the bank.

In reconciling a bank​ statement, the bank balance is​ $2,100, and the checkbook balance is​ $2,001. Which of the following is the most probable reason for the bank balance being larger than the book​ balance?

There are outstanding checks.

Which of the following would be included in the journal to record an NSF​ check?

a debit to Accounts Receivable and a credit to Cash

A petty cash fund was established with a $400 balance. It currently has cash of $40 and petty cash tickets totaling $360. Which of the following would be included in the entry to replenish the​ fund?

a debit to various expenses for $360

A check was written by a business for​ $507 but was recorded in the journal as​ $705. How would this error be included on the bank​ reconciliation?

an addition on the book side

A company check for payment must be signed by​ ________.

an employee specifically authorized by the company

The controller at Business Services Consulting needs new computers for the accounting department.​ However, there are no guidelines specifying whether the controller can approve purchases of office equipment. Which internal control procedure needs​ strengthening?

assignment of responsibilities

A​ ________ is a document explaining the reasons for the difference between a​ depositor's Cash account in the ledger and the​ depositor's cash balance in its bank account.

bank reconciliation

Which of the following items are reconciling items on the book side of the​ reconciliation?

bank service charge and correction of book error

Which is the most liquid form of​ asset?

cash

Two or more people working together to circumvent internal controls and defraud a company is known as​ ________.

collusion

A petty cash fund was established with a $600 balance. It currently has cash of $45 and petty cash tickets as shown​ below: Travel expense $120 Office supplies expense 250 Equipment rental expense 110 Which of the following would be included in the journal entry to replenish the Petty Cash​ fund?

debit to Cash Short​ & Over for $75

A petty cash fund was established with a $550 balance. It currently has cash of $90 and petty cash tickets as shown​ below: Travel expense $115 Office supplies expense 310 Equipment rental expense 35 Which of the following would be the journal entry to replenish the Petty Cash​ account?

debit various expenses $460​; credit Cash

Which of the following items are reconciling items on the bank side of the​ reconciliation?

deposit in transit and outstanding checks

Which of the following items would require an adjusting entry after preparation of the bank​ reconciliation?

errors made on the books revealed by the bank reconciliation

A check for which a​ maker's bank account has inadequate money to pay the check is known as​ a(n) ________.

nonsufficient funds check

When a check is​ issued, the party being paid the cash is referred to as the​ ________.

payee

At Carlson​ Services, the cashier collects checks and cash from​ customers, and the junior accountant records the transactions in the journal. The controller approves the journal entries and bank reconciliations. The treasurer signs checks and approves contracts. Which internal control procedure is exemplified in the above​ situation?

seperation of duties

No journal entries are required for the reconciling items on the bank side because​ ________.

those transactions have already been recorded in the​ company's journal

Goldman Services hired a new clerk to keep custody of and maintain all the equipment in the equipment yard. The clerk has not yet been adequately trained on the maintenance needs of the equipment. Which internal control procedure needs​ strengthening?

​competent, reliable, and ethical personnel

Vaughan Services hires a new accountant to maintain its petty cash fund. Although the employee possesses an accounting​ degree, he/she had been previously convicted of embezzlement. Which internal control procedure needs to be addressed in this​ situation?

​competent, reliable, and ethical personnel