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

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Question 1

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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

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) B) and C)
F) B) and D)

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Question 2

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Record the following transactions for the month of June 2016 on page 23 of a cash receipts journal.Total,prove,and rule the cash receipts journal as of June 30.

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Question 3

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Riley's Company uses the perpetual inventory system and had the following transactions during the month of May.Record the transactions in the general journal.(Omit explanations. )

To arrive at the accurate balance on a bank reconciliation statement,it is necessary to deduct an NSF check from the bank statement balance.

On December 31,2016,Designer's Warehouse received a bank statement with an ending balance of $19,500.The balance in the firm's checkbook and Cash account on the same date was $20,580.The difference between the two balances is caused by the items listed below. Instructions: 1.Prepare a bank reconciliation statement for the firm as of December 31,2016. 2.Record entries for any items on the bank reconciliation statement that must be journalized.Date the entries December 31,2016.Use page 19 of a general journal.

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

On a bank reconciliation statement,you would find all of the following except:

A cash sale of merchandise would be recorded in

Record the following transactions for the month of April,2016 on page 4 of a cash receipts journal.Total,prove,and rule the cash receipts journal as of April 30.

The individual amounts in the Sales Credit column of the cash receipts journal are posted to the accounts receivable subsidiary ledger.

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

Match the accounting terms with the description by entering the proper letter in the space provided. ___ 1.The bank on which a check is written ___ 2.A form that explains any addition,other than a deposit,to a checking account ___ 3.A form that explains any deduction,other than a check,from a checking account ___ 4.A signature transferring a check to a specific person,firm,or bank ___ 5.In accounting,currency,coins,checks,money orders,and funds on deposit in a bank ___ 6.A check returned to the depositor unpaid because of insufficient funds in the drawer's account;also called an NSF check ___ 7.A deposit that is recorded in the cash receipts journal but that reaches the bank too late to be shown on the monthly bank statement ___ 8.A form prepared to record the deposit of cash or checks to a bank account ___ 9.A statement that accounts for all differences between the balance on the bank statement and the book balance of cash ___ 10.A fee charged by a bank to cover the costs of maintaining accounts and providing services ___ 11.A special-purpose fund used to handle payments involving small amounts of money ___ 12.A signature of the payee written on the back of the check that transfers ownership of the check without specifying to whom or for what purpose ___ 13.A financial instrument whose ownership can be transferred to another person or business ___ 14.Checks that have been recorded in the cash payments journal but have not yet been paid by the bank ___ 15.A signature that transfers a check to a specific party for a stated purpose

The entry to record an additional cash investment by the owner is recorded in

Upon collection of the amount due on an interest-bearing promissory note from a customer,the accountant would debit Cash,credit Notes Receivable,and

After a bank reconciliation statement is completed,a firm may have to make an entry in its accounting records for

A check issued for $1,980 to pay a vendor on account was recorded in the firm's records as $1,890;the canceled check was properly listed on the bank statement at $1,980.To arrive at an accurate balance on a bank reconciliation statement,the error should be

Match the accounting terms with the description by entering the proper letter in the space provided. ___ 1.A check paid by the bank on which it was drawn ___ 2.The process by which employees are investigated by an insurance company that will insure the business against losses through employee theft or mishandling of funds ___ 3.A special journal used to record and post transactions involving the receipt of cash ___ 4.A check dated sometime in the future ___ 5.A form sent to a firm's customers showing transactions during the month and the balance owed ___ 6.A form used to record transactions involving petty cash ___ 7.A written authorization that transfers ownership of a check ___ 8.A special journal used to record transactions involving the payment of cash ___ 9.A written promise to pay a specified amount of money on a specific date ___ 10.A verification that the amount of currency and coins in a cash register agrees with the amount shown on the cash register audit tape ___ 11.The person or firm issuing a check ___ 12.A form used to record the payments made from a petty cash fund ___ 13.An account used to record any discrepancies between the amount of currency and coins in the cash register and the amount shown on the audit tape ___ 14.The person or firm to whom a check is payable ___ 15.A written order signed by an authorized person instructing a bank to pay a specific sum of money to a designated person or business

Which of the following statements is NOT correct regarding the cash receipts journal?

The entry to create a petty cash fund includes

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