Accounting 5 - T/F
10. An outstanding check is one that has not yet been issued. (p. 130)
F
14. The source document for an electronic funds transfer is a check number. (p. 137)
F
18. A petty cash report is completed at the end of each business day. (p. 143)
F
19. A memorandum is the source document for the entry to record replenishing the petty cash fund. (p. 144)
F
2. When a deposit is made in a bank account, the bank issues a check. (p. 123)
F
20. When the petty cash fund is replenished, the balance of the petty cash account increases. (p. 145)
F
5. When writing a check, the first step is to prepare the check. (p. 126)
F
6. Most banks do not look at the date the check is written and will withdraw money from the depositor's account anytime. (p. 126)
F
8. A check that contains minor errors can be corrected neatly and initialed. (p. 127)
F
. The amount of a check is written twice on each check. (p. 126)
T
. The journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by debit card. (p. 137)
T
1. Because cash transactions occur more frequently than other transactions, there is more chance for making recording errors affecting cash. (p. 122)
T
11. Banks deduct service charges from customers' checking accounts without requiring customers to write a check for the amount. (p. 132)
T
15. The source document for a debit card purchase is a memorandum. (p. 138)
T
16. The purpose of a petty cash fund is to make small cash payments without writing checks. (p. 140)
T
17. Businesses use petty cash when writing a check is not time or cost effective. (p. 140)
T
2. Not only do banks charge a fee for handling a dishonored check, but they also deduct the amount of the check from the account, as well. (p. 135)
T
3. There are three types of endorsements commonly used: blank, special, and restrictive. (p. 124)
T
9. An important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement. (p. 130)
T
A check with a blank endorsement can be cashed by anyone who has possession of the check. (p. 124)
T