Philosophy Chapter 5

When a check is presented to a bank for payment & the amount is deducted from the payer's account the check is said to have ________ the bank.

Cleared

which of the following is not a specific objective of the SOX act

Conceal Fraud

The bank will show a customer's deposit on bank statements as a ____.

Credit, because a deposit is a liability from the banks point of view

if a cashier rang up sales of $4000, but only had $3,997 to deposit, which journal entry would be recorded?

Debit Credit cash $3,997 Sales revenue $4000 Shortage $3

the entry to record the establishment of a petty cash fund it to debit _________ and credit ____.

Petty Cash //// Cash

restricted cash is reported _________

Separately as an asset on the balance sheet

NSF Checks from customers should be subtracted from the ____ balance on a bank reconciliation

Bank

a company has a $10,000 cash balance per its books. the bank statement has a balance of $9,580. the bank reconciliation included $800 of deposits in transit, $500 of checks outstanding, a $100 NSF check from a customer, and a $20 bank service charge. the up to date cash balance equals

$9,880 ADD deposit in transit ($800) SUBTRACT outstanding checks (500) NSF AND BANK SERVICE CHARGE ONLY USED ON COMPANY BOOKS NOT BANK BALANCE

in a bank reconciliation, interest revenue earned on the bank account balance is?

Added to the book balance

the benefits of internal control procedures is that they

1) improve the efficiency and effectiveness of oeprations 2) protect against theft of assets 3) enhance the reliability of accounting information

Deposits in _____ are added to the _____ (bank/book) side of the bank reconciliation

Transit /// Bank

outstanding checks written by the company should be a ______ on the company's bank reconciliation

deduction from the bank balance

voucher

instrument authorizing a cash payment.