accounting chapter 22
The change fund account is listed on the chart of accounts as an
asset
The petty cash fund account is an
asset account
A ___ is prepared to verify that the amount of cash in the drawer is equal to the total cash sales for the day plus the change fund cash
cash proof
A ___ consists of varying denominations of bills and coins and is used to make change in cash transactions
change fund
A ___ is usually used in retail stores such as supermarkets for making change for cash customers
change fund
Recorded a cash overage in the change fund
debit cash in bank, credit cash short and over
Decreased the change fund
debit cash in bank, credit change fund
Recorded a cash shortage in the petty cash fund
debit cash short and over, credit cash in bank
Established a change fund
debit change fund, credit cash in bank
Established a petty cash fund
debit petty cash fund, credit cash in bank
Increased the petty cash fund
debit petty cash fund, credit cash in bank
Replenished the petty cash fund; petty cash vouchers were for supplies, delivery expenses, and miscellaneous expenses
debit supplies, delivery expense, miscellaneous expense, credit cash in bank
A cash proof is prepared to verify that the amount of cash in the cash register drawer is equal to the total cash sales for the day
false
At the end of the fiscal period, the balance of the cash short and over account is closed directly into retained earnings
false
Cash overages are revenue and are recorded as credits to the sales account
false
Cash shortages are liabilities and are debited to the cash short and over account
false
Once a business establishes a petty cash fund for a set amount, the Internal Revenue Service does not permit the size of the fund to be changed
false
Replenishing the petty cash fund increases the fund's original balance
false
The change fund account is debited each time the fund is replenished
false
The entry to establish the petty cash fund is recorded in the cash payments journal
false
The petty cash register is considered an accounting journal because all amounts are posted from this register to general ledger accounts
false
Cash shortages or overages are recorded in the
general journal
Which of the following businesses would probably not have a change fund?
lawyer's office
If the change fund was established for $100 and there is $296 in cash receipts and the cash balance is $400, cash is said to be
over
A ___ is any payment made from the petty cash fund
petty cash disbursement
Any payment from the petty cash fund is called a ___
petty cash disbursement
Cash that is kept on hand by a business for making small, incidental cash payments is called a ___
petty cash fund
Many businesses use a ___ for paying small cash payments
petty cash fund
A ___ is a record of all disbursements made from the petty cash fund
petty cash register
All payments made from the petty cash fund are recorded in the ___
petty cash register
A ___ is a form prepared by the petty cashier to request cash for replenishing the petty cash fund
petty cash requisition
The form used for requesting money to replenish the petty cash fund is a ___
petty cash requisition
A ___ is a proof of payment from the petty cash fund
petty cash voucher
Every payment made from the petty cash fund be supported by a ___
petty cash voucher
The ___ is responsible for making payments from the petty cash fund
petty cashier
The person responsible for handling the petty cash fund is ___
petty cashier
In business, cash overages are
revenue
If the petty cash fund was established for $50 and there is $4 in cash with $45 in vouchers, cash is said to be ___
short
Cash short and over is classified as a
temporary account
Businesses that use a petty cash envelope for recording petty cash disbursements use a new petty cash envelope for each period's disbursements
true
Change funds are classified as assets and are listed directly below cash in bank in the chart of accounts
true
Sales clerks are usually required to sign the cash proof to indicate they have counted the cash in the drawer and verified its accuracy
true
Some businesses that have a petty cash fund do not use a petty cash register
true
The amount of cash sales for the day is taken from the cash register tape and entered on the cash proof form
true
The amounts paid out of the petty cash fund must be journalized and recorded in the appropriate general ledger accounts when the petty cash fund is replenished
true
The balance of the cash from the cash register drawer is deposited in the business's checking account after the cash in the cash register drawer is counted and the change fund is set aside
true
The purpose of a change fund is to enable the cashier using the cash register to have enough coins and currency to conduct business for the day
true
The sales clerk usually counts the cash in the drawer, verifies its accuracy, and signs the cash proof form
true
The size of the change fund does not change unless the business finds it needs more or less than its original estimate
true
The size of the petty cash fund is determined by the needs of the business
true
The size of the petty cash fund will not change unless the business finds that it needs more or less than its original estimate
true
The petty cash fund is replenished
when its balance reaches the minimum amount and at the end of the fiscal period
The petty cash fund account is debited
when the fund is established and when the amount of money in the fund is increased
