BUS 7 - Quiz 9

The entry to replenish a petty cash fund typically includes

The entry to replenish a petty cash fund typically includes

Which of the following is a check that is returned to the depositor unpaid?

dishonored check

Which of the following is a signature that transfers a check to a specific party for a specific purpose?

restrictive endorsement.

Most businesses use the petty cash fund to pay for

small expenditures.

George's Grocers keeps a $100 change fund in its cash register. The cash sales per the cash register tape on January 30 were $405. The cash count was $502. Identify the correct journal entry below to record the sales and cash overage (or shortage) for January 30.

Debit Cash 402 Debit Cash short or over 3 Credit Sales 405

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.

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 as outstanding when preparing the bank reconciliation.

To arrive at an accurate balance on a bank reconciliation statement, a service charge should be

deducted from the book balance.

Which of the following statements is correct?

An endorsement is a written authorization that transfers ownership of a check.

A firm's bank reconciliation statement shows a book balance of $15,820, an NSF check of $400, and a service charge of $20. Its adjusted book balance is

$15,400. Explanation $15,820 book balance − $400 NSF check − $20 service charge = $15,400 adjusted book balance

A firm's bank reconciliation statement shows a book balance of $21,000, an NSF check of $3,400, and a service charge of $30. Its adjusted book balance is

$17,570 Explanation $21,000 book balance − $3,400 NSF check − $30 service charge = $17,570 adjusted book balance

On August 3, Marley's Sporting Goods accepted a six-month promissory note from J.J. Brown, who owed $490 on account. (J.J. had needed more time to pay his balance.) The promissory note had a 10 percent interest rate. The journal entry on August 3 to record the transaction would be:

Debit Note Receivable 490 Credit Account Receivable 490

Which of the following would not be shown as an adjustment to the book balance on a bank reconciliation statement?

Deposits in transit

Which of the following is not a reason why the book balance of cash may not agree with the balance on the bank statement?

End of the month

Which of the following is not an essential cash receipt internal control?

Ensure that the person who records cash receipts is the same person who receives and deposits the funds.

Which of the following is not an internal control procedure that applies to petty cash?

Write petty cash fund checks to the order of "Cash," not to the person in charge of the fund.

A check issued for $785 to pay a vendor on account was recorded in the firm's records as $758; the canceled check was properly listed on the bank statement at $785. The journal entry for this reconciling item would include:

a credit to Cash for $27. Explanation $785 check amount − $758 incorrectly recorded amount = $27 overstatement of cash

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 Accounts Receivable and a credit to Cash.

ABC Office Suppliers keeps a $100 change fund in its cash register. The cash sales per the cash register tape on June 30 were $600. The cash count was $705. Identify the correct journal entry below to record the sales and cash overage (or shortage) for June 30.

Debit Cash 605 Credit Cash short or over 5 Credit Sales 600

On March 30, a firm's bank reconciliation statement shows a book balance of $31,640, an NSF check of $800, and a service charge of $40. The journal entry on March 30 to record these items would be:

Debit Account Receivable 800 Debit Bank Fee Expense 40 Credit Cash 840

The bank statement showed a non-interest bearing note receivable from a customer that was collected by the bank, which the company listed as a reconciling item on the bank reconciliation statement. The journal entry needed for this reconciling item includes:

a debit to Cash.