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College Accounting

John Price, University of North Texas
M. David Haddock, Chattanooga State Technical Comm. College
Horace Brock, University of North Texas
Connie Hahn, Southern Alberta Institute of Technology
Traven Reed, Canadore College

Cash and Cash Control

True/False Questions


1	Internal controls are not necessary if payments are made by cheque.
		A)	True
		B)	False


2	The use of special journals for cash receipts and cash payments allows division of the accounting work by permitting more than one person to record journal entries at the same time.
		A)	True
		B)	False


3	Except for petty cash payments, all payments should be made by cheque.
		A)	True
		B)	False


4	Correct internal control procedures require that the approval for a paying all bills, writing all cheques, and signing all cheques should be the responsibility of the same person.
		A)	True
		B)	False


5	An adequate system of internal control over cash will provide for safeguarding both incoming and outgoing funds
		A)	True
		B)	False


6	A petty cash fund is used to account for small miscellaneous receipts of cash.
		A)	True
		B)	False


7	Each petty cash payment is entered separately in the cash payments journal.
		A)	True
		B)	False


8	The petty cash analysis sheet is a memorandum record of petty cash payments rather than a record of original entry.
		A)	True
		B)	False


9	The check to replenish the petty cash fund is written for an amount sufficient to restore the fund to its established balance
		A)	True
		B)	False


10	When posting from the cash payments journal at the end of the month, the accountant posts the total cash payments as a single credit to Cash.
		A)	True
		B)	False


11	The abbreviation "CP5" in the Posting Reference column of a ledger account indicates that the posting was made from the cash payments journal on the fifth day of the month.
		A)	True
		B)	False


12	A cash payments journal can help the accountant greatly reduce the number of individual postings required.
		A)	True
		B)	False


13	The Other Accounts Debit column of a cash payments journal is used to record the debits that are to be posted individually.
		A)	True
		B)	False


14	In proving a cash payments journal, the total of the Debit columns should equal the total of the Credit columns.
		A)	True
		B)	False


15	Account numbers are recorded below the totals of each column as each summary posting from the cash payments journal is completed.
		A)	True
		B)	False


16	A cash investment by the owner in a business should not be recorded in the cash receipts journal
		A)	True
		B)	False


17	The title of a special journal makes it possible to omit much of the explanation that would be needed in a general journal entry.
		A)	True
		B)	False


18	Depositing cash receipts daily is a good practice.
		A)	True
		B)	False


19	Cash payments for goods and services should not be made directly from cash receipts
		A)	True
		B)	False


20	The Sales Tax Payable account represents an expense of the business.
		A)	True
		B)	False


21	Cash Short or Over is a general ledger account that normally has a debit balance because cash tends to be short more often than over.
		A)	True
		B)	False


22	All payments, except those from special-purpose funds such as a petty cash fund, should be made by cheques in order to have better control over cash.
		A)	True
		B)	False


23	Cash received by mail should be deposited by a person other than the one who accepts and lists it.
		A)	True
		B)	False


24	Only cheques are listed on the deposit slip
		A)	True
		B)	False


25	Cheques made payable to cash or to bearer need not be endorsed when deposited.
		A)	True
		B)	False


26	The best form of endorsement for business purposes is the restrictive endorsement, which limits the use of the cheques to a stated purpose.
		A)	True
		B)	False

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