Chap 6 Quiz

Question 1

There is a debit balance of $100 in the cash in hand account. This means thta
$100 remains in the office of the business
Cash has been overspent by $100
Total cash paid out is $100
Total cash received is $100

Answer 1

$100 remains in the office of the business

Question 2

Cash of $500 taken from the office was banked into the business bank account. What is the journal entry to record the transaction?
Debit Credit
Cash in hand Cash at bank
Cash at bank Cash in hand
Cash in hand Bank Overdraft
Bank overdraft Cash in hand

Answer 2

Cash at bank Cash in hand

Question 3

When will a bank overdraft occur?

Answer 3

When a business has insufficient funds in the bank account to settle a cheque issued

Question 4

Which of the following is a reason why a cheque is dishonoured
The amount of the cheque is low
The cheque is from a different bank from the payee’s bank
The cheque is not presented at the end of the month
The date on the cheque is more than 6 months

Answer 4

The date on the cheque is more than 6 months

Question 5

Give reasons why cheques are rejected

Answer 5

Cheque has expired
Cheque is post dated
Information on the cheque is incomplete
Information on the cheque is inconsistent
Payee has insufficient funds in the bank

Question 6

Which of the following is a reason for giving cash discounts?
To encourage customers to buy more goods
To encourage customers to buy goods on discount
To encourage customers to pay earlier, before the end of the credit period
To encourage customers to pay exactly on the last day of the credit period

Answer 6

To encourage customers to pay earlier, before the end of the credit period

Question 7

The journal entry to record discount allowed is

Answer 7

Debit Credit

Discount allowed Trade receivables

Question 8

The journal entry to record discount received is

Answer 8

Debit Credit

Trade payables Discount received

Question 9

Define cash discount. Explain why cash discounts are given

Answer 9

A cash discount is given to customers who buy on credit, in order to encourage the customers to pay earlier

Question 10

Explain 2 differences between trade discount and cash discount

Answer 10

A cash discount is given to encourage early payment whereas a trade discount is given to encourage the customers to buy in larger quantities
Cash discount is deducted off the invoice amount, trade discount is deducted off the list price
Cash discount is given at the point of payment; trade discount is given at the point of purchase of sale of goods
Cash discount is recorded in the ledger account; trade discount is not recorded in the ledger account

Question 11

Jin Convenience Store purchased inventory worth $4,570 from Health Drinks Supplies. A cheque was issued when the goods was delivered. State the journal Jin Convenience Store would record the transaction in?

Answer 11

Cash Book

Question 12

Jin Convenience Store purchased goods worth $10,320 from Chomp Snack Enterprise on credit. State the journal Jin Convenience Store would record the transaction in

Answer 12

Purchase Journal

Question 13

Jin Convenience Store returned good near expiry to Healthy Drinks Supplies. A cash refund of $420 was received immediately. State the journal Jin Convenience Store would record the transaction in

Answer 13

Cash Book

Question 14

Latifah Kitchen Supplies sold goods worth #1,438 to start Supermarket. A cheque was received when the goods are delivered and banked in immediately. State the journal Latifah Kitchen Supplies would record the transaction in

Answer 14

Cash Book

Question 15

Latifah Kitchen supplies sold goods worth $24,000 to Moved Department Store on credit. State the journal Latifah Kitchen Supplies would record the transaction in

Answer 15

Sales Journal

Question 16

Start Supermarket returned goods worth $900 to Latifah Kitchen Supplies as they were of the wrong specifications. A cheque was refunded. State the journal Latifah Kitchen Supplies would record the transaction in

Answer 16

Cash Book

Question 17

The petty cash has an imprest amount of $250 and the expenses paid out from the fund are cleaning 330, coffee and tea $20, postage $6 and stationary $21. The reimbursement drawn by the chief cashier to the petty cashier will be ____

Answer 17

$77

Question 18

The amount of reimbursement to the petty cash fund at the end of the period equals __________

Answer 18

the total payments from the petty cash fund in that period

Question 19

The balance left in the Petty Cash Book is $45 and a reimbursemnt of $155 is made. The imprest amount is ____

Answer 19

$200

Question 20

The method used to prevent money from the petty cash to be stolen is called the _______ system

Answer 20

imprest

Question 21

The document used to record payments from the petty cash fund is called the ______

Answer 21

petty cash voucher