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