Chapter 9 - Cash (SmartBook)
A check stub records which of the following:
Balance brought forward, check amount, balance, date, payee, purpose
A statement that accounts for the differences between the bank statement balance and the book balance of cash is called a _________
Bank reconciliation statement
Identify the characteristics of debit cards
Debit cards operate like cash or a personal check, the bank debits the depositors' checking accounts when depositors use their debit cards
A company issued a check to replenish its petty cash fund. An analysis of payments from the fund showed only one payment of $50 for delivery expense. The replenishment would be recorded with a:
Debit to delivery expense, credit to cash
A company established a $100 petty cash fund. The journal entry to record this transaction includes a:
Debit to petty cash, credit to cash
A form prepared to record the deposit of cash or checks to a bank account is called a:
Deposit slip
A check returned to the depositor unpaid because of insufficient funds in the drawer's account is called a _________ check, also known as a NSF check
Dishonored
An electronic transfer of money from one account to another is called a(n) _________
Electronic funds transfer
Items found on the second section of the bank reconciliation, or adjustments to the book balance include:
Errors in the books, deposits not recorded
When completing a bank reconciliation, adjustments such as deposits in transit, outstanding checks, and bank errors, are adjustments that are listed in the:
First section, or adjustment to the bank statement balance
Outstanding checks are checks that:
Have been recorded in the general journal but have not yet been paid by the bank
Negotiable
A financial instrument whose ownership can be transferred to another person or business
Bank endorsement
A signature of the payee written on the back of the check that transfers ownership of the check without specifying to whom or for what purpose
Restrictive endorsement
A signature that transfers a check to a specific party for a stated purpose
Full endorsement
A signature transferring a check to a specific person, firm, or bank
Endorsement
A written authorization that transfers ownership of a check
Check
A written order signed by an authorized person
The process by which employees are investigated by an insurance company that will insure the business against losses by employee theft or mishandling of funds is called:
Bonding
A check that has been paid by the bank on which it was drawn is called a _________ check
Canceled
Currency, coins, checks, money orders, and funds on deposit in a bank are recorded in a(n) _________ account
Cash
A document that records the verification that the amount of currency and coins in a cash register agrees with the amount shown on the cash register transaction totals is called a _________
Cash proof
When cash in the register is more than the cash register tape, cash is over and is recorded as a credit in the _________ account
Cash short or over
Outstanding checks and deposits in transit are:
Common reasons why the bank statement balance does not agree with the book balance
While preparing a bank reconciliation, a bank service charge was discovered. This adjustment would be recorded with a:
Credit to cash, debit to bank fees expense
When a promissory note is used to replace an outstanding accounts receivable balance, the entry to record this transaction requires a (debit/credit) _________ to accounts receivable and a (debit/credit) _________ to notes receivable
Credit, debit
A deposit that is recorded in the general journal but that reaches the bank too late to be shown on the monthly bank statement is called a deposit _________ _________
In transit
Identify internal controls related to cash payments:
Issue checks only for approved bills and invoices, enter all cash payment transactions into the accounting records promptly
Which of the following are internal controls related to cash receipts:
Keep cash receipts in a locked register, safe, or drawer Bank reconciliation should be completed by an employee not responsible for cash receipts Cash receipts should always be recorded promptly
Good internal control of banking activities include:
Limiting access of the checkbook to designated employees, using prenumbered checks
Items found on the first section of the bank reconciliation, or adjustments to the bank statement balance include:
Outstanding checks, deposits in transit
A special-purpose cash fund used to handle payments involving small amounts of money is called a _________ cash fund
Petty
A check dated some time in the future is called a _________ check
Postdated
Internal controls related to petty cash include:
Preparing a petty cash voucher for each payment, keeping petty cash in a safe, locked cash box
A(n) _________ is sometimes used by businesses to extend credit for a sales transaction
Promissory note
Common uses of online banking include:
Receipt of payment from customers, payments to the government, payments to vendors
When completing a bank reconciliation, adjustments such as deposits not recorded, bank service fees, and errors in the books, are adjustments that are listed in the:
Second section, or adjustments to book balance
The form sent to a firm's customers showing transactions during the month and the balance owed is referred to as a _________ of _________
Statement, account
The following accounts are used as typical column headings on a petty cash analysis
Supplies debit, delivery expense debit, miscellaneous expense debit
Drawee
The bank on which a check is written
Drawer
The person or firm issuing a check
Payee
The person or firm to whom a check is payable
A form that is used to record the payments made from a petty cash fund is called a petty cash _________
Voucher