Acct Ch 5

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Ownership of a check cannot be transferred.

False

The journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by check.

False

The petty cash slip is the source document for the entry to replenish petty cash.

False

When petty cash is replenished, Petty Cash is debited and Cash is credited.

False

When the petty cash fund is replenished, the balance of the petty cash account increases.

False

An endorsement consisting of the words "Pay to the order of" and a new owner's name is a special endorsement.

True

An endorsement consisting only of the endorser's signature is a blank endorsement.

True

An important aspect of cash control is verifying that the information on a bank statement and in a checkbook is in agreement.

True

An outstanding check is one that has been issued but not yet reported on a bank statement by the bank.

True

Not only do banks charge a fee for handling a dishonored check, but they also deduct the amount of the check from the account.

True

On a bank statement reconciliation, the adjusted check stub balance must be the same as the adjusted bank balance.

True

A business form ordering a bank to pay cash from a bank account is a ______.

check

The bank statement shows a checking account balance of $5,500.00. There are outstanding checks totaling $600.00 an outstanding deposit of $400.00, and a bank service charge of $15.00. The checking account balance should be _________.

$5,300.00

A memorandum is the source document for the entry to record establishing a petty cash fund.

False

A petty cash fund is used for making large cash payments without writing checks.

False

Because cash transactions occur more frequently than other transactions, the chances for making recording errors affecting cash are less.

False

A check with a future date on it is a postdated check.

True

A check that contains errors must be marked with the word VOID, and another check must be written.

True

The amount of a check is written twice on each check.

True

The souce document for an electronic funds transfer is a memorandum.

True

Using a memorandum as the source document for a dishonored check is an application of the accounting concept Objective Evidence.

True

Using a petty cash fund usually decreases the number of checks that have to be written.

True

Voided checks should be recoreded in the journal.

True

When a bank statement is received, the depositor should verify its accuracy immediately.

True

When a deposit is made in a bank account, the bank issues a receipt.

True

When writing a check, the first step is to prepare the check stub.

True

An endorsement on the back of a check consisting only of a signature is __________.

a blank endorsement

If any kind of error is made in preparing a check, _________.

all of the above

A signature or stamp on the back of a check transferring ownership is _______.

an endorsement

A lost check with a blank endoresment on it can be cashed by ___________.

anyone who has the check

The entry to establish a $200.00 petty cash fund is __________.

debit Petty Cash, $200.00; credit Cash, $200.00

Each time cash or checks are placed in a bank account, the customer prepares a _________.

deposit slip

The scource document for journalizing a bank service charge is a ___________.

memorandum

The scource document for journalizing an electronic funds transfer is a _____________.

memorandum

If a check is endorsed on the back with the words "For deposit only," the check can be cashed by ________.

no one--it must be deposited

A form showing proof of a petty cash payment is a __________.

petty cash slip

An endorsement on the back of a check consisting of the words "Pay to the order of" and a new check owner's name is a _______.

special endorsement


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