Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/30

Click to flip

30 Cards in this Set

  • Front
  • Back
A special cash fund to pay relatively small amounts.
ch7
petty cash fund
Highly liquid investments that are usually reported with cash on the balance sheet.
ch7
cash equivalents
The ratio of cash and cash equivalents to current liabilities.
ch7
doomsday ratio
Coins, currency (paper money), checks, money orders, and money on deposit that is available for unrestricted withdrawal from banks and other financial institutions.
ch7
cash
A set of procedures for authorizing and recording liabilities and cash payments.
ch7
voucher system
A special form for recording relevant data about a liability and the details of its payment.
ch7
voucher
A system in which computers rather than paper (money, checks,etc) are used to effect cash transactions.
ch7
electronic funds transfer (EFT)
The analysis that details the items responsible for the difference between the cash balance reported in the bank statement and the balance of the cash account in the ledger.
ch7
bank reconciliation
Most companies'invoices are designed so that customers return a protion of the invoice called a(n)________ ___________.
ch7
remittance advice
Vouchers are ordinarily filed in the unpaid voucher file in order of _________ date.
ch7
due
Highly liquid investments that are usually reported with cash on the balance sheet are called ______ ______.
ch7
cash equivalents
A company erroneously recorded a check issued for $180 as $810. On the bank reconcilliation, the difference of $530 would be added to the cash balance according to the ______ _____.
ch7
depositor's records
Procedures designed to detect theft or misuse of cash are called ________ controls.
ch7
detective
At the beginning of a work shift each cash register clerk is given a cash drawer that contains a predetermined amount of cash. The amount of cash in each drawer is called a(n) _________ fund.
ch7
change
If Cash Short and Over has a credit balance at the end of the period, the balance would be reported on the income statement in the section entitled _______
______________.
ch7
Other income
What entry is required in the depositor's accounts to record outstanding checks?
a) debit Cash; credit Accounts Payable
b) debit Accounts Receivable; credit Cash
c)debit Accounts Payable; creit Cash
d) No entry is required
ch7
d. No entry is required in the depositor's accounts to record outstanding checks.
Receipts from cash sales of $7,500 were recorded incorrectly as $5,700. What entry is required in the depositor's accounts?
a) debit Cash; credit Accounts Receivable
b) debit Cash; credit Sales
c) debit Accounts Receivable; credit Cash
d) debit Sales; credit Cash
ch7
b) The entry required in the depositor's accounts for receipts from cash sales of $7,500, recorded incorrectly as $5,700, is a debit to Cash and a credit to Sales for $1,800.
The amount of the outstanding checks is included on the bank reconciliation as:
a) an addition to the balance per bank statement
b) a deduction from the balance per bank statement
c) an addition to the balance per depostitor's records
d) a deduction from the balance per depositor's records
ch7
b. The amount of the outstanding check is included on the bank reconcilliation as a deduction from the balance per bank statement.
Accompanying the bank statement was a credit memorandum for a short-term, non-interest-bearing note collected by the bank. What entry is required in the depositor's account?
a) debit Cash; credit Miscellaneous income
b) debit Cash; credit Notes Receivable
c) debit Accounts Receivable; credit Cash
d) debit Notes Receivable; credit Cash
ch7
b. The entry required in the depositor's accounts for a credit memorandum for a short-term, non-interest-bearing note collected by the bank is a debit to Cash and a credit to Notes Receivable.
The bank on which a check is drawn is known as the _____.
ch7
The bank on which a check is drawn is known as the drawee.
The _______ is the one who signs the check, ordering payment by the bank.
drawer
In a bank reconcilliation, deposits not recorded by the bank are:
a) added to the balance according to the bank statement.
b) deducted from the balance according to the bank statement
c) added to the balance according to the depositor's records
d) deducted from the balance according to the depositor's records
ch7
a.In a bank reconcilliation, deposits not recorded by the bank are added to the balance according to the bank statement.
For good internal control over cash receipts, remittance advices should be separated from cash received by mail and sent directly to the:
a) treasurer
b) cashier's department
c) accounting department
d) voucher clerk
ch7
a. incorrect. Since the treasurer is responsible for the custody of cash, the remittance advices should not be sent to the treasurer.
b.incorrect. Since the cashier's department handles cash, the remittance advice should not be sent ot the cashier's department.
c. Correct. For good internal control over cash receipts, remittance advices should be separated from cash received by mail and sent directly to the accounting department.
d.incorrect. Voucher clerks do not use remittance advices in carrying out their responsibilities.
An important characteristic of the voucher system is the requirement that:
a)vouchers be prepared by the treasurer
b) vouchers be paid immediately after they are prepared
c) paid vouchers are filed by due date
d) a voucher be prepared for each major expenditure.
ch7
a)incorrect. Vouchers are not prepared by the treasurer.
b)Vouchers are not paid immediately after they are prepared; they are filed and paid by the due date
c)incorrect. Paid Vouchers are filed numerically, not by due date.
d)correct. An important characteristic of the voucher system is the requirement that a voucher be prepared for each major expenditure.
Journal entries based on the bank reconcilliation are required on the depositor's books for:
a) additions to the balance according to the depositor's records.
b) deductions from the balance according to the depositor's records
c) both a and b
d) both additions to and deductions from the balance according to the bank's records
ch7
a.incorrect. Journal entries based on the bank reconcilliation are also required on the depositor's books for deductions from the balance according to the depositor's records.
b.incorrect. Journal entries based on the bank reconcilliation are also required on the depositor's books for additions to the balance according to the depositor's records.
c.CORRECT. Journal entries based on the bank reconcilliation are srequired on the depositor's records and deductions from the balance according to the depositor's records.
d. incorrect. Journal entries based on the bank reconcilliation are not required on the depositor's books for additions to and deductions from the balance according to the bank's records.
The entry to record the replenishment of the petty cash fund includes a debit to various expense and asset accounts and a credit to:
a) Cash
b) Petty Cash
c) Accounts Receivable
d) various liability accounts
c. The entry to record the replenishment of the petty cash fund includes a debit to various expense and asset accounts and a credit to Cash.
The ratio of cash and cash equivalents to current liabilities is called the __________ ratio.
ch7
doomsday
In a bank reconcilliation, a bank debit memorandum for service charges is ________
_______ the cash balance according to the depositor's records.
ch7
deducted from
In a bank reconcilliation, deposits in transit are _______ ______ the cash balance according to the bank statement.
added to
A voucher for the purchase of goods is normally supported by the supplier's invoice, a purchase order, and a(n)_______ _________.
ch7
receiving report