Accounting-Chapter 5

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false

Most banks do not look at the date the check is written and will withdraw money from the depositor's account anytime

false

When a deposit is made in a bank account, the bank issues a check

false

When the petty cash fund is replenished, the balance of the petty cash account increases

false

When writing a check, the first step is to prepare the check

true

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

false

An outstanding check is one that has not yet been issued

true

Banks deduct service charges from customers' checking accounts without requiring customers to write a check for the amount

checking account

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

debit card

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

debit card

A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder.

deposit slip

A bank form which lists the checks, currency, and coins an account holder is adding to a bank account

deposit slip

A bank form which lists the checks, currency, and coins an account holder is adding to the bank account.

NSF check

A check dishonored by the bank because of insufficient funds in the account of the maker of the check

dishonored check

A check that a bank refuses to pay

voided check

A check that cannot be processed because the maker has made it invalid

voided check

A check that cannot be processed because the maker has made it invalid.

fasle

A check that contains minor errors can be corrected neatly and initialed

canceled check

A check which has been paid by the bank

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

postdated check

A check with a future date on it.

electronic funds transfer

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

petty cash slip

A form showing proof of a petty cash payment

false

A memorandum is the source document for the entry to record replenishing the petty cash fund

cash short

A petty cash on hand amount that is less than a recorded amount

cash short

A petty cash on hand amount that is less than the recorded amount.

cash over

A petty cash on hand amount that is more than a recorded amount

cash over

A petty cash on hand amount that is more than the recorded amount.

false

A petty cash report is completed at the end of each business day

bank statement

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

bank statement

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

endorsement

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

endorsement

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

accounting clerk

An accounting worker who processes routine details about accounting transactions.

petty cash

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

blank endorsement

An endorsement consisting only of the endorser's signature

blank endorsement

An endorsement consisting only of the endorser's signature.

special endorsement

An endorsement indicating a new owner of a check

special endorsement

An endorsement indicating a new owner of a check.

restrictive endorsement

An endorsement restricting further transfer of a check's ownership.

true

Because cash transactions occur more frequently than other transactions, there is more chance for making recording errors affecting cash

true

Businesses use petty cash when writing a check is neither time nor cost effective

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

true

The amount of a check is written twice on each check

true

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

true

The purpose of a petty cash fund is to make small cash payments without writing checks

true

The source document for a debit card purchase is a memorandum

fasle

The source document for an electronic funds transfer is a check number

true

There are three types of endorsements commonly used: blank, special, and restrictive


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