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30 Cards in this Set
- Front
- Back
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A special cash fund to pay relatively small amounts.
ch7 |
petty cash fund
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Highly liquid investments that are usually reported with cash on the balance sheet.
ch7 |
cash equivalents
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The ratio of cash and cash equivalents to current liabilities.
ch7 |
doomsday ratio
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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
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A set of procedures for authorizing and recording liabilities and cash payments.
ch7 |
voucher system
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A special form for recording relevant data about a liability and the details of its payment.
ch7 |
voucher
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A system in which computers rather than paper (money, checks,etc) are used to effect cash transactions.
ch7 |
electronic funds transfer (EFT)
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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
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Most companies'invoices are designed so that customers return a protion of the invoice called a(n)________ ___________.
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remittance advice
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Vouchers are ordinarily filed in the unpaid voucher file in order of _________ date.
ch7 |
due
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Highly liquid investments that are usually reported with cash on the balance sheet are called ______ ______.
ch7 |
cash equivalents
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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
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Procedures designed to detect theft or misuse of cash are called ________ controls.
ch7 |
detective
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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.
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change
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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
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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.
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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.
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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.
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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.
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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.
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The _______ is the one who signs the check, ordering payment by the bank.
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drawer
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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.
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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. |
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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. |
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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. |
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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.
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The ratio of cash and cash equivalents to current liabilities is called the __________ ratio.
ch7 |
doomsday
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In a bank reconcilliation, a bank debit memorandum for service charges is ________
_______ the cash balance according to the depositor's records. ch7 |
deducted from
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In a bank reconcilliation, deposits in transit are _______ ______ the cash balance according to the bank statement.
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added to
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A voucher for the purchase of goods is normally supported by the supplier's invoice, a purchase order, and a(n)_______ _________.
ch7 |
receiving report
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