Accounting Ch. 5

true

as petty cash is paid out, the amount of cash in the petty cash box decreases

true

banks deduct service charges from customers checking accounts without requiring customers to write a check for that amount

false

because cash transactions occur more frequently than other transactions, the chances for making recording errors affecting cash are less

true

businesses use petty cash when writing a check is not time or cost effective

memorandum

the source document for journalizing a bank service charge is a _________

memorandum

the source document for journalizing an electric funds transfer is ________

false

there are four types of endorsements commonly used: blank special original and restrictive

true

voided checks should be recorded 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

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

true

when writing a check, the first thing to prepare is the check stub

checking account

a bank account from which payments can be ordered by a depositor

debit card

a bank card that automatically deducts that amount of a purchase from the checking account of the card holder

check

a business form ordering a bank to pay cash from a bank account is a _____

the same signature as on the signature card

a check must be signed with _______

dishonored check

a check that a bank refuses to pay

true

a check that contains errors must be marked with the word void and another check must be written

true

a check with a blank endorsement can be cashed by anyone who has possession of the check

postdated check

a check with a future date on it

electric funds transfer

a computerized cash payments system that transfers funds without the use of checks, currency or other paper documents

false

a debit card holder still must remember to write a check for the purchase even though the debit card has been used for the purchase

petty cash slip

a form showing proof of a petty cash payment

anyone who has the check

a lost check with a blank endorsement on it can be cashed by _______

false

a memorandum is the source document for the entry to record establishing a petty cash fund

at the end of the month

a petty cash fund is always replenished _________

false

a petty cash fund is used for making large cash payments without writing checks

bank statment

a report of deposits, withdrawals, and bank balances sent to a depositor by a bank

false

a signature card for a business's checking account should show only the signature of the business owner

endorsement

a signature or stamp on the back of a check transferring ownership

code of conduct

a statement that guides the ethical behavior of a company and its employees

petty cash

an amount of cash kept on hand and used for making small payments

true

an endorsement consisting of the words pay to the order of and a new owners name is a special endorsement

blank endorsement

an endorsement consisting only of the endorsers signature

true

an endorsement consisting only of the endorsers signature is a blank endorsement

special endorsement

an endorsement indicating a new owner of a check

true

an endorsement on a check may either be stamped or written

special endorsement

an endorsement on the back of a check consisting of the words pay to the order of & a new check owners name is ______

restrictive endorsement

an endorsement restricting further transfer of a checks ownership

true

an important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement

true

an outstanding check is one that had been issued but not yet reported on a bank statement by the bank

true

anytime a payment is made from the petty cash fund, a petty cash slip is prepared showing proof of a petty cash payment

false

as petty cash is paid out the balance of the petty cash account decreases

deposit slip

each time cash or checks are placed in a bank account, the customer prepares a _______

true

if a bank does not receive payment from the person who signed the check, each endorser of the check is individually liable for payment

no one--it must be deposited

if a check is endorsed on the back with the words for deposit only the check can be cashed by _______

a new check should be prepared void should be written on the check stub and the check

if any kind of error is made in preparing a check ________

true

in accounting money is usually referred to as cash

true

the source document for an electronic funds transfer is a memorandum

false

most banks do not look at the date the check is written and will withdraw money from the depositors account anytime

false

most banks will accept postdated checks

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 as well

true

not only do banks charge a fee for handling a dishonored check, but they also deduct the same amount of the check from the account

false

ownership of a check cannot be transferred

false

techknow consulting maintains a petty cash fund for making large cash payments without writing checks

true

the amount of a check is written twice on each check

debit petty cash 200 credit cash 200

the entry to establish a 200 petty cash fund is _______

false

the journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by a check

true

the only difference in the journal entry for a cash payment by check and a cash payment by electronic funds transfer is the source document

true

the source document for a debit card purchase is a memorandum