Ch 9 - Cash Rec, Pay and Bank Proc VOCAB

Question 1

Define bank reconciliation statement.

Answer 1

statement that accounts for all differences between balance on the bank statement and book balance of cash

Question 2

Define blank endorsement.

Answer 2

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

Question 3

Define bonding.

Answer 3

process by which employees are investigated by an insurance company that will insure the business against losses through employee theft or mishandling of funds

Question 4

Define canceled check.

Answer 4

check paid by the bank on which it was drawn

Question 5

Define cash.

Answer 5

in accounting: currency, coins, checks, money orders, and funds on deposit in a bank

Question 6

Define cash payments journal .

Answer 6

special journal used to record transactions involving the payment of cash.

Question 7

Define cash receipts journal.

Answer 7

special journal used to record and post transactions involving the receipt of cash

Question 8

Define cash register proof.

Answer 8

verification that the amount of currently and coins in a cash register agrees with the amount shown on the cash register audit tape

Question 9

Define Cash Short or Over account.

Answer 9

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.

Question 10

Define check.

Answer 10

written order signed by authorized person instructing a bank to pay a specific sum of money to a designated person or business.

Question 11

Define credit memorandum.

Answer 11

A form that explains any addition other than a deposit, to a checking account.

Question 12

Define debit memorandum.

Answer 12

form that explains any deduction, other than a check, from a checking account.

Question 13

Define deposit in transit.

Answer 13

deposit that is recorded in the cash receipts journal but that reaches the bank too late to be shown on the monthly bank statement

Question 14

Define deposit slip.

Answer 14

form prepared to record the deposit of cash or checks to a bank account.

Question 15

Define dishonored (NSF) check

Answer 15

check returned to the depositor unpaid because of insufficient funds in drawer’s account, also called NSF check

Question 16

Define drawee

Answer 16

bank on which a check is written

Question 17

Define drawer.

Answer 17

person of firm issuing a check

Question 18

Define electronic funds transfer (EFT)

Answer 18

electronic transfer of money from one account to another

Question 19

Define endorsement.

Answer 19

written authorization that transfers ownership of a check.

Question 20

Define full endorsement.

Answer 20

Signature transferring a check to a specific person, firm or bank.

Question 21

Define negotiable.

Answer 21

financial instrument whose ownership can be transferred to another person or business.

Question 22

Define outstanding checks.

Answer 22

checks that have been recorded in the cash payments journal but have not yet been paid by the bank

Question 23

Define payee

Answer 23

person or firm to whom a check is payable

Question 24

Define petty cash analysis sheet.

Answer 24

form used to record transactions involving petty cash

Question 25

Define petty cash fund

Answer 25

special-purpose fund used to handle payments involving small amounts of money

Question 26

Define petty cash voucher

Answer 26

form used to record the payments made from a petty cash fund

Question 27

Define postdated check.

Answer 27

check dated some time in the future

Question 28

Define promissory note

Answer 28

written promise to pay a specific amount of money on a specific date

Question 29

Define restrictive endorsement

Answer 29

signature that transfers a check to a specific party for a stated purpose

Question 30

Define service charge

Answer 30

fee charged by a bank to cover the costs of maintaining accounts and providing services

Question 31

Define statement of account

Answer 31

form sent to a firm’s customers showing transactions during the month and balance owed