Question 1

A cash sale of merchandise would be recorded in

Accepted Answer

A)   the sales journal.
B)   the general journal.
C)   the cash receipts journal.
D)   the cash payments journal.E) A) and B)
F) C) and D)

Question 2

Grouping all transactions involving cash payments together in the cash payments journal strengthens the audit trail.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements is not correct?

Accepted Answer

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.E) B) and C)
F) B) and D)

Question 4

To record payment of sales tax owed, the accountant would debit ____________________ and credit Cash.

Accepted Answer

The answer of To record payment of sales tax owed,...

Question 5

The entry to replenish petty cash includes a debit to Petty Cash Fund and a credit to Cash.

Accepted Answer

A) True 
 B)False

Question 6

Match the accounting terms with the description by entering the proper letter in the space provided.

Accepted Answer

(1) P, (2) K, (3) L, (4) S, (5...

Question 7

To arrive at an accurate balance on a bank reconciliation statement, a credit memorandum from the bank for the collection of a note and interest should be

Accepted Answer

A)   added to the bank statement balance.
B)   added to the book balance.
C)   deducted from the bank statement balance.
D)   deducted from the book balance.E) None of the above
F) A) and C)

Question 8

A check issued for $890 to pay a vendor on account was recorded in the firm's records as $980; the canceled check was properly listed on the bank statement at $890. To arrive at an accurate balance on a bank reconciliation statement, the error should be

Accepted Answer

A)   added to the bank statement balance.
B)   added to the book balance.
C)   deducted from the bank statement balance.
D)   deducted from the book balance.E) None of the above
F) A) and D)

Question 9

Which of the following would not be shown as an adjustment to the book balance on a bank reconciliation statement?

Accepted Answer

A)   Bank service charges
B)   NSF checks
C)   Deposits in transit
D)   A charge for printing new checksE) A) and B)
F) B) and C)

Question 10

Checks issued by a firm that were paid by the bank and returned to the firm with the bank statement are called ____________________ checks.

Accepted Answer

The answer of Checks issued by a firm that were...

Question 11

Checks issued by a firm and entered in its records that have not been paid by the bank are called ____________________ checks.

Accepted Answer

The answer of Checks issued by a firm and entered...

Question 12

To record the payment of a purchase invoice when a cash discount is taken, the accountant would

Accepted Answer

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.E) All of the above
F) A) and B)

Question 13

The cash receipts journal for Arlen Company is shown below. Describe how the amounts would be posted to the general ledger accounts.

Accepted Answer

Dr. Cash $8,630; Cr. Accounts ...

Question 14

Merchandise costing $5,600 with terms of 1/10, n/30, with transportation costs of $320 included on the invoice (not included in the $5,600)  is sold on account. If the bill is paid within ten days, the amount of the purchase discount is.

Accepted Answer

A)   $59.20.
B)   $56.00.
C)   $3.20.
D)   $52.80E) B) and C)
F) All of the above

Question 15

After a multicolumn special journal such as a cash receipts journal is totaled, it should be proved to be sure that the debits and credits in the journal are equal.

Accepted Answer

A) True 
 B)False

Question 16

If a firm's bank reconciliation statement shows a bank statement balance of $12,000, total deposits in transit of $1,500, and total outstanding checks of $1,000, the adjusted bank balance is ____________________.

Accepted Answer

The answer of If a firm's bank reconciliation statement shows...

Question 17

The person or firm that issues a check is called the ____________________, or payer.

Accepted Answer

The answer of The person or firm that issues a...

Question 18

A firm appropriately wrote a check for $78 but entered the amount as payment of $87 in its records. On a bank reconciliation statement this error would be shown as

Accepted Answer

A)   A deduction of $9 from the book balance.
B)   An addition of $9 to the book balance.
C)   A deduction of $9 from the bank statement balance.
D)   An addition of $9 to the bank statement balance.E) All of the above
F) B) and D)

Question 19

Cash Short or Over is an expense account when it has a debit balance.

Accepted Answer

A) True 
 B)False

Question 20

The process of determining why a difference exists between a firm's records and the bank's records and bringing the two sets of records into balance is known as ____________________ the bank statement.

Accepted Answer

The answer of The process of determining why a difference...

Exam 9: Cash Receipts, Cash Payments, and Banking Procedures

The cash receipts journal for Arlen Company is shown below. Describe how the amounts would be posted to the general ledger accounts.

Correct AnswerverifiedDr. Cash $8,630; Cr. Accounts ...View AnswerShow Answer

The entry to replenish petty cash includes a debit to Petty Cash Fund and a credit to Cash.

Correct AnswerverifiedShow Answer

A cash sale of merchandise would be recorded in

Correct AnswerverifiedShow Answer

The process of determining why a difference exists between a firm's records and the bank's records and bringing the two sets of records into balance is known as ____________________ the bank statement.

Correct AnswerverifiedShow Answer

Grouping all transactions involving cash payments together in the cash payments journal strengthens the audit trail.

Correct AnswerverifiedShow Answer

The person or firm that issues a check is called the ____________________, or payer.

Correct AnswerverifiedShow Answer

If a firm's bank reconciliation statement shows a bank statement balance of $12,000, total deposits in transit of $1,500, and total outstanding checks of $1,000, the adjusted bank balance is ____________________.

Correct AnswerverifiedShow Answer

To record the payment of a purchase invoice when a cash discount is taken, the accountant would

Correct AnswerverifiedShow Answer

To record payment of sales tax owed, the accountant would debit ____________________ and credit Cash.

Correct AnswerverifiedShow Answer

Which of the following would not be shown as an adjustment to the book balance on a bank reconciliation statement?

Correct AnswerverifiedShow Answer

Checks issued by a firm and entered in its records that have not been paid by the bank are called ____________________ checks.

Correct AnswerverifiedShow Answer

A firm appropriately wrote a check for $78 but entered the amount as payment of $87 in its records. On a bank reconciliation statement this error would be shown as

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

A check issued for $890 to pay a vendor on account was recorded in the firm's records as $980; the canceled check was properly listed on the bank statement at $890. To arrive at an accurate balance on a bank reconciliation statement, the error should be

Correct AnswerverifiedShow Answer

After a multicolumn special journal such as a cash receipts journal is totaled, it should be proved to be sure that the debits and credits in the journal are equal.

Correct AnswerverifiedShow Answer

Merchandise costing $5,600 with terms of 1/10, n/30, with transportation costs of $320 included on the invoice (not included in the $5,600) is sold on account. If the bill is paid within ten days, the amount of the purchase discount is.

Correct AnswerverifiedShow Answer

Cash Short or Over is an expense account when it has a debit balance.

Correct AnswerverifiedShow Answer

Match the accounting terms with the description by entering the proper letter in the space provided.

Correct Answerverified(1) P, (2) K, (3) L, (4) S, (5...View AnswerShow Answer

Checks issued by a firm that were paid by the bank and returned to the firm with the bank statement are called ____________________ checks.

Correct AnswerverifiedShow Answer

To arrive at an accurate balance on a bank reconciliation statement, a credit memorandum from the bank for the collection of a note and interest should be

Correct AnswerverifiedShow Answer

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Dr. Cash $8,630; Cr. Accounts ...
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(1) P, (2) K, (3) L, (4) S, (5...
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