CA chapter 9
a firms bank reconciliation statement shows a book balance of $31,640 an NSF check of $800, and service charge of $40. Its adjusted book balance is a) 32,480 b) 30,800 c) 30,880 d) 32,400
30,800
to record the payment of a purchase invoice when a cash discount is taken the accountant would
debit AP, credit PD, and credit Cash
**the person or firm that issues a check is called the __ or payor
drawer
after a bank reconciliation is completed, a firm may have to make an entry in its accounting records for
NSF checks
Upon collection of the amount due on an interest-bearing promissory note from a customer, the accountant would debit Cash, credit Notes Receivable, and
credit interest income
the entry to replenish a petty cash fund includes
debits to various expense accounts and a credit to cash
to arrive at an accurate balance on a bank reconciliation statement outstanding checks should be
deducted from the bank statement balance
To arrive at an accurate balance on a bank reconciliation statement, deposits in transit should be
added to the bank statement balance
**if the amount of cash available for deposit is ___ thank the amount listed on the audit tape taken from the cash register the cash short or over account is debited
more or less
which of the following is correct? a) entry to record pyt of invoice within cash discount period would include a debit to purchases discounts account b) to record a cash purchase of merchandise the accountant would debit purchases and credit cash c) transaction that is properly recorded in cash pyt journal will always include recording of an amount in the cash debit column d) purchase discounts is a contra revenue account
to record a cash purchase of merchandise the accountant would debit purchases and credit cash
Cash Short or Over is an expense account when it has a debit balance.
true
In a firm that has a good system of internal control, cash receipts are deposited often
true
a strong system of internal control requires that all payments be made by check except those made from a carefully controlled cash fund such as petty cash
true
after a multicolumn special journal such as a cash receipts journal is totaled it should be proved to be sure that the debits and credits in the journal are equal
true
amounts that appear in the other accounts credit section of the cash receipts journal require individual posting to the general ledger
true
grouping all transactions involving cash payments together in the cash payments journal strengthens the audit trail
true
no end of month posting is required for the total of the other accounts debit column of the cash payments journal
true
purchase discounts is a contra cost of goods sold account
true
the individual amounts in the accounts payable debit column of the cash payments journal are posted to the accounts payable sub ledger
true
**the petty cash fund account has a (n) ___ balance
debit
**if a firms bank reconciliation statement shows a bank statement balance of $12000 total deposits in transit of $1500 and total outstanding checks of $1000 the adjusted bank balance is ___
$12500
a firms bank reconciliation statement shows a book balance of $15,820, an NSF check of $400, and service charge of $20. its adjusted book balance is a) 16,240 b) 15,400 c) 15,440 d) 16,200
$15,400
to arrive at an accurate balance on a bank reconciliation statement a service charge should be
deducted from the book balance
**to record payment of sales tax owed the accountant would debit __ and credit cash
sales tax payable
A cash sale of merchandise would be recorded in
the cash receipts journal
the entry to record an additional cash investment by the owner is recorded in
the cash receipts journal
the most appropriate form of endorsement of a check for business purposes is
the restrictive endorsement
**when a bank deducts any amount other than a paid check from a depositors account it issues a form called a(n) ___ memo
debit
The entry in a firm's accounting records for a credit customer's check that was returned by the bank marked "NSF" would include
a debit to AR, and a credit to Cash
to arrive at an accurate balance on a bank reconciliation statement, an error made by bank in which the bank deducted a check issued by another business from the balance of the company bank account should be
added to the bank statement balance
A check issued for $890 to pay a vendor on account was recorded in the firm's records as $980; the canceled check was properly listed on the bank statement at $890. To arrive at an accurate balance on a bank reconciliation statement, the error should be
added to the book balance
to arrive at an accurate balance on a bank reconciliation statement, a credit memo from the bank for collection of a note and interest should be
added to the book balance
A firm appropriately wrote a check for $78 but entered the amount as payment of $87 in its records. On a bank reconciliation statement this error would be shown as A. a deduction of $9 from the book balance B. an addition of $9 to the book balance C. a deduction of $9 from the bank statement balance. D. an addition of $9 to the bank statement balance.
an addition of $9 to the book balance
Included with its bank statement a firm may receive a credit memorandum, which could indicate A. a bank service charge deducted from the firm's account balance. B. the bank's return of a dishonored (NSF) check that was issued by a credit customer of the firm. C. a fee for printing new business checks. D. an addition to the firm's account balance because the bank collected the amount due on a promissory note from a customer of the firm.
an addition to the firms account balance because the bank collected the amount due on a promissory note from a customer of the firm
**a(n) ___ is a form received from the bank showing all transactions recorded in a depositors account during the month
bank statement
**checks issued by a firm that were paid by the bank and returned to the firm with the bank statement are called __ checks
canceled
If a check written by a firm is not canceled by the bank and returned with the month's bank statement, the firm should
consider this check outstanding when preparing the bank reconciliation
A check issued for $1,980 to pay a vendor on account was recorded in the firm's records as $1,890; the canceled check was properly listed on the bank statement at $1,980. To arrive at an accurate balance on a bank reconciliation statement, the error should be A. added to the bank statement balance. B. added to the book balance. C. deducted from the bank statement balance. D. deducted form the book balance.
deducted from the book balance
to arrive at an accurate balance on a bank reconciliation statement a debit memo for a customer check marked NSF should be
deducted from the book balance
which of the following would not be shown as an adjustment to the book balance on a bank reconciliation statement? a) bank svc charges b) NSF checks c) deposits in transit d) charge for printing new checks
deposits in transit
**to transfer ownership of a check from one party to another it is necessasary to ___ the check
endorse
which statement is not correct? a) term cash includes checks money orders and funds on deposit in bank as well as currency and coin b) cash register proof is used to enter cash sales and tax in the cash receipts journal c) entry to record receipt of promissory note to replace open acct is recorded in cash receipt journal d) cash receipts journal has separate columns for debit to cash credits to AR and credits to Sales and Sales tax payable
entry to record receipt of promissory note to replace open acct is recorded in cash receipt journal
a check that has a full endorsement can be further endorsed by any bearerand therefor is not as safe as a check with a blank endorsement
false
if cash is over, it is entered in the Other Account Credit column of the cash receipts journal and the figure is circled
false
the entry to replenish petty cash includes a debit to Petty Cash and a credit to Cash
false
the individual amounts in the sales credit column of the cash receipts journal are posted to the accounts receivable sub ledger
false
the monthly bank statement should be received and reconciled by the employee who deposits cash receipts and writes the checks
false
to arrive at the accurate balance on a bank reconciliation statement, it is necessary to deduct an NSF check from the bank statement balance
false
**if a payee indicates as part of the endorsement the name of the person firm or bank to whom the check is to be payable the payee has made a(n) ___ endorsement
full
**the entry to record the issuance of a check in settlement of an interest bearing promissory note includes a debit to notes payable a debit to ___and a credit to cash
interest expense
on a bank reconciliation statement you would find all the following except a) list of cancelled checks b) list of NSF checks c) list of outstanding checks d) bank service charge
list of cancelled checks
** checks issued by a firm and entered in its records that have not been paid by the bank are called ___ checks
outstanding
**a(n) ___ check is a check dated some time in the future
postdated
**A(n) ___ is a written promise to pay a specified amount of money at a specified time
promissory note
**the process of determining why a difference exists between a firms records and the banks records and bringing the two sets of records into balance is known as __ the bank statement
reconciling
