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