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| 1 | |
Which of the following statements is not correct? |
| | A) | In accounting, the term "cash" includes checks, money orders, and funds on deposit in a bank as well as currency and coins. |
| | B) | The cash register proof is used to enter the cash sales and sales tax in the cash receipts journal. |
| | C) | The entry to record the receipt of a promissory note to replace an open account is recorded in the cash receipts journal. |
| | D) | The cash receipts journal has separate columns for debits to Cash, credits to Accounts Receivable, and credits to Sales and Sales Tax Payable. |
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| 2 | |
A cash sale of merchandise would be recorded in |
| | A) | the sales journal. |
| | B) | the general journal. |
| | C) | the cash receipts journal. |
| | D) | the cash payments journal. |
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| 3 | |
Upon collection of the amount due on an interest-bearing promissory note from a customer, the accountant would debit Cash, credit Notes Receivable, and |
| | A) | debit Interest Expense. |
| | B) | credit Interest Income. |
| | C) | credit Interest Expense. |
| | D) | debit Interest Income. |
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| 4 | |
The entry to record an additional cash investment by the owner is recorded in |
| | A) | the cash payments journal. |
| | B) | the cash receipts journal. |
| | C) | the general journal. |
| | D) | the purchases journal. |
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| 5 | |
Which of the following statements is correct? |
| | A) | The entry to record the payment of an invoice within the cash discount period would include a debit to the Purchases Discounts account. |
| | B) | To record a cash purchase of merchandise, the accountant would debit Purchases and credit Cash. |
| | C) | A transaction that is properly recorded in the cash payments journal will always include the recording of an amount in the Cash Debit column. |
| | D) | Purchase discounts is a contra revenue account. |
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| 6 | |
To record the payment of a purchase invoice when a cash discount is taken, the accountant would |
| | A) | debit Accounts Payable, credit Purchases Discounts, and credit Cash. |
| | B) | debit Accounts Payable, debit Purchases Discounts, and credit Cash. |
| | C) | debit Accounts Payable and credit Cash. |
| | D) | debit Purchases, credit Purchases Discounts, and credit Cash. |
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| 7 | |
The entry to replenish a petty cash fund includes |
| | A) | a debit to Cash and a credit to Petty Cash. |
| | B) | a debit to Petty Cash Fund and a credit to Cash. |
| | C) | debits to various expense accounts and a credit to Petty Cash Fund. |
| | D) | debits to various expense accounts and a credit to Cash. |
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| 8 | |
The most appropriate form of endorsement of a check for business purposes is |
| | A) | the blank endorsement. |
| | B) | the restrictive endorsement. |
| | C) | the full endorsement. |
| | D) | no endorsement. |
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| 9 | |
On a bank reconciliation statement, you would find all of the following except |
| | A) | a list of canceled checks. |
| | B) | a list of NSF checks. |
| | C) | a list of outstanding checks. |
| | D) | the bank service charge. |
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| 10 | |
A firm's bank reconciliation statement shows a book balance of $15,820, an NSF check of $400, and a service charge of $20. Its adjusted book balance is |
| | A) | $16,240. |
| | B) | $15,400. |
| | C) | $15,440. |
| | D) | $16,200. |
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