Acct Ch 5
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
