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| 1 | |
The book balance of cash after the bank reconciliation is complete and all adjustments have been posted is the same as the balance in the general ledger Cash account. |
| | A) | True |
| | B) | False |
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| 2 | |
Petty Cash payments do not need to be recorded separately in the general journal. |
| | A) | True |
| | B) | False |
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| 3 | |
When a petty cash fund is reimbursed, the Petty Cash account is debited for the amount paid out of the fund. |
| | A) | True |
| | B) | False |
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| 4 | |
You make entries to the Petty Cash account only when the fund is first established, when it is changed in size, or when it is abolished. |
| | A) | True |
| | B) | False |
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| 5 | |
In preparing a bank reconciliation, a deposit in transit is deducted from the bank statement balance of cash. |
| | A) | True |
| | B) | False |
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| 6 | |
All petty cash disbursements are made by check. |
| | A) | True |
| | B) | False |
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| 7 | |
A bank statement balance of cash usually does not match the book balance of cash. |
| | A) | True |
| | B) | False |
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| 8 | |
After a bank reconciliation has been completed, the accountant must make journal entries to record the outstanding checks. |
| | A) | True |
| | B) | False |
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| 9 | |
The amount on the cash register tape indicates the revenue earned, and the cash count will always agree with it. |
| | A) | True |
| | B) | False |
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| 10 | |
When a petty cash fund is established, Petty Cash is debited and Cash is credited. |
| | A) | True |
| | B) | False |
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| 11 | |
On a bank reconciliation, a debit memorandum indicating the bank service charge is subtracted from the book balance of cash. |
| | A) | True |
| | B) | False |
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| 12 | |
On a bank reconciliation, a credit memorandum indicating the interest earned for the month is subtracted from the book balance of cash. |
| | A) | True |
| | B) | False |
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| 13 | |
On a bank reconciliation, a debit memorandum from the bank indicating a NSF check received from a customer, is subtracted from the book balance of cash. |
| | A) | True |
| | B) | False |
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| 14 | |
On a bank reconciliation, a credit memorandum from the bank indicating they collected a note plus interest from one of our customers on our behalf, is subtracted from the book balance of cash. |
| | A) | True |
| | B) | False |
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| 15 | |
Upon completion of a bank reconciliation, we would make adjusting journal entries for all items that affected the book balance of cash (none for items on the bank's side) |
| | A) | True |
| | B) | False |
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| 16 | |
The book balance of cash may differ from the bank statement balance because of |
| | A) | NSF checks. |
| | B) | service charges. |
| | C) | outstanding checks. |
| | D) | all of these. |
| | E) | none of these. |
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| 17 | |
A check issued to a creditor in the amount of $35 was recorded in the journal as $350. In the bank reconciliation, the correction would be recorded as |
| | A) | an addition to the bank statement balance. |
| | B) | a deduction from the bank statement balance. |
| | C) | a deduction from the book balance of cash. |
| | D) | an addition to the book balance of cash. |
| | E) | none of these. |
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| 18 | |
An endorsement including the words "For deposit only" is called |
| | A) | a special endorsement. |
| | B) | a restrictive endorsement. |
| | C) | a qualified endorsement. |
| | D) | a blank endorsement. |
| | E) | none of these. |
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| 19 | |
When a petty cash fund has been established, the following relationship should be true at all times: |
| | A) | petty cash fund = cash in the petty cash box + petty cash vouchers |
| | B) | petty cash fund = cash in the petty cash box - petty cash vouchers |
| | C) | petty cash fund = cash in the petty cash box |
| | D) | petty cash fund = petty cash vouchers |
| | E) | none of these |
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| 20 | |
Marz Company's bank statement shows that a note receivable of $15,000 and interest of $1,050 were collected by the bank on behalf of the depositor. The entry required on the company's books is |
| | A) | debit Cash, credit Notes Receivable. |
| | B) | debit Cash, debit Interest Expense, credit Notes Receivable. |
| | C) | debit Cash, debit Interest Income, credit Notes Receivable. |
| | D) | debit Cash, credit Interest Income, credit Notes Receivable. |
| | E) | none of these. |
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| 21 | |
B. Hanson shows a balance in her Cash account of $360, but the bank statement just received shows a balance of $460. The difference of $100 may be caused by |
| | A) | an NSF check for $100. |
| | B) | an outstanding check for $100. |
| | C) | a debit memo for $100. |
| | D) | all of these. |
| | E) | none of these. |
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| 22 | |
The bank statement will show |
| | A) | the amounts of checks paid during the month. |
| | B) | the balance on deposit at the end of the month. |
| | C) | beginning bank balance. |
| | D) | any deductions from the bank statement balance. |
| | E) | all of these. |
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| 23 | |
On a bank statement, a deposit of $402 was recorded by the bank as $204. The difference of $198 should be treated as |
| | A) | an addition to the bank statement balance. |
| | B) | an addition to the book balance of cash. |
| | C) | a deduction from the book balance of cash. |
| | D) | a deduction from the bank statement balance. |
| | E) | none of these. |
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| 24 | |
Which data are generally not included on a check? |
| | A) | address of the payee |
| | B) | amount the bank is to pay the payee |
| | C) | date of the check |
| | D) | signature of the party writing the check |
| | E) | none of these |
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| 25 | |
An NSF check held by the payee should be carried on the payee's records as |
| | A) | an account payable. |
| | B) | part of cash on hand. |
| | C) | Cash Short and Over. |
| | D) | an account receivable. |
| | E) | none of these. |
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| 26 | |
An outstanding check which has not yet cleared the bank should be |
| | A) | subtracted from the banks balance. |
| | B) | added to the book balance |
| | C) | added to the banks balance. |
| | D) | subtracted from the book balance. |
| | E) | none of these. |
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| 27 | |
A check to the utility company written correctly for $404 was incorrectly posted as $440 in the general ledger cash account. To fix this error on the bank reconciliation, |
| | A) | subtract from the bank's balance an additional $36. |
| | B) | add to the book balance an additional $36. |
| | C) | add to the bank's balance an additional $36. . |
| | D) | subtract from the book balance an additional $36. |
| | E) | none of these. |
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| 28 | |
A check to the utility company written correctly for $404 was incorrectly posted as $440 in the general ledger cash account. The adjusting entry to fix this error in the general journal after the bank reconciliation is performed would include, |
| | A) | A debit to Cash for $36. |
| | B) | A credit to Cash for $36. |
| | C) | A credit to Utilities Expense for $36. |
| | D) | A credit to Cash for $404. |
| | E) | none of these. |
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| 29 | |
Cash includes all of the following EXCEPT: |
| | A) | currency |
| | B) | coins |
| | C) | amounts on deposit in bank accounts |
| | D) | checks acceptable for deposit in bank accounts |
| | E) | all of these are considered cash. |
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| 30 | |
Guidelines for control of cash include which of the following: |
| | A) | separation of the handling of cash from its recordkeeping |
| | B) | cash receipts should be promptly deposited in a bank |
| | C) | cash payments should be made by check. |
| | D) | A, B and C are all correct |
| | E) | None of the above |
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