BUS Accounting Chapter 6

Which of the following would be the accounting entry for a bank service charge that is disclosed on the bank statement?

Debit Service Charge Expense; credit Cash

A manager is reconciling the checking account and has noted that $12,000 of checks are still outstanding checks. Which of the following is true?

The checks have not been presented for payment even though they have been deducted from the checkbook.

A bank service charge of $10 would be included on the bank reconciliation as a(n):

$10 subtraction from the balance per books.

Jim Rogers endorsed a check by signing his name on the back of the left side of the check. This kind of endorsement is called:

Blank endorsement

How is a list of deposits in transit prepared?

By comparing the deposits on the bank statement to the deposits in the checkbook register

A $200 petty cash fund has cash of $50 and valid receipts for $150. The entry to replenish the fund would include a:

Credit to cash for $150

A customer pays with a credit card upon the purchase of a $500 item. The credit card company charges a 1% service charge. Which of the following entries would record properly the sale?

Debit Cash $495; debit Service Charge Expense $5; credit Sales $500

A company is setting up a fund that will be used to make small dollar amount cash purchases of office supplies from time-to-time. Which of the following entries would establish a $250 cash fund?

Debit petty cash $250

If the owner of Office Coffee Services forgot to deduct a withdrawal from the balance per books, what entry would be necessary?

Debit withdrawals; credit cash

If the owner of business withdrawals money for personal use but in performing a bank reconciliation determines that she had neglected to record the withdrawal what accounting entry would be necessary?

Debit withdrawals; credit cash

A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?

It is shown as a debit memo.

Which of the following would be subtracted from the balance per the bank?

Outstanding checks

The debit recorded in the journal entry to establish the petty cash fund is to:

Petty Cash.

Which of the following statements is FALSE?

The bank statement shows outstanding checks.

A manager is reconciling the checking account and has noted that $15,000 of checks are still outstanding checks and that the checking account balance per his check book is $10,000 but the bank statement shows a $24,750 balance. Which of the following is true?

The checks have not been presented for payment even though they have been deducted from the checkbook. This explains most, but not all, of the difference between the bank and book balances.

Bank interest earned on a checking account would be shown on a bank reconciliation as:

added to the balance per books.

An error, on the company's books, in recording a $92 deposit as $29 would be included on the bank reconciliation as a(n):

addition of $63 to the balance per books.

The action that transfers the right to deposit or transfer a check by signing the back of the check is called:

an endorsement.

First City National bank issued a $5,000 credit memorandum to Mac's Auto Service Centers of America when the bank:

collected a note receivable from a customer.

Giant Sports Inc.'s $500 petty cash fund has a shortage of $16. The facts are: $180 in valid receipts for expenses; $304 in coins and currency. The journal entry to replenish the petty cash fund would include a:

debit to Cash Short and Over for $16.

When the petty cash expense receipts plus the coin and currency in the petty cash lockbox are less than the amount that established the fund, which account entry would be made:

debit to Cash Short and Over.

The name of the bank on the face of the check is referred to as the:

drawee.

The ABA code (American Bankers Association) is found:

in the upper-right corner of each check.

An error, on the company's books, in recording a $102 deposit as $201 would be included on the bank reconciliation as a(n):

subtraction of $99 to the balance per books.

A voucher would be used for documentation to:

support a petty cash expenditure.

A petty cash fund is set up:

to pay for small expenses