Chapter 5 Flashcards
- A bank account from which payments can be ordered by a depositor
Checking Account
- A bank form which lists the checks, currency, and coins an account holder is adding to the bank account.
deposit slip
- A signature or stamp on the back of a check, transferring ownership.
Endorsement
- An endorsement consisting only of the endorser’s signature.
Blank Endorsement
- An endorsement indicating a new owner of a check.
Special Endorsement
- An endorsement restricting further transfer of a check’s ownership
Restrictive Endorsment
- A check with a future date on it.
Postdated Check
- A check that cannot be processed because the maker has made it invalid
Voided Check
- A report of deposits, withdrawals, and bank balances sent to a depositor by a bank.
Bank Statement
- A check which has been paid by the bank
Canceled Check
- A check that a bank refuses to pay.
Dishonored Check
- A check dishonored by the bank because of insufficient funds in the account of the maker of the check.
NSF Check
Non-sufficient funds
- A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents.
Electronic Funds Transfer
- A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder
Debit Card
- An amount of cash kept on hand and used for making small payments.
Petty Cash
- A form showing proof of a petty cash payment
Petty Cash Slip
- A petty cash on hand amount that is less than a recorded amount.
Cash Short
- A petty cash on hand amount that is more than a recorded amount.
Cash Over
True or False: 1. Because cash transactions occur more frequently than other transactions, there is more chance for making recording errors affecting cash.
True
True or False: 2. When a deposit is made in a bank account, the bank issues a check
False:
True or False: 3. There are three types of endorsements commonly used: blank, special, and restrictive.
True
True or False: 4. A check with a blank endorsement can be cashed by anyone who has possession of the check.
True
True or False: 5. When writing a check, the first step is to prepare the check.
False
True or False: 6. Most banks do not look at the date the check is written and will withdraw money from the depositor’s account anytime.
False
True or False: 7. The amount of a check is written twice on each check.
True
True or False: 8. A check that contains minor errors can be corrected neatly and initialed.
False
True or False: 9. An important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement
True
True or False: 10. An outstanding check is one that has not yet been issued.
False
True or False: 11. Banks deduct service charges from customers’ checking accounts without requiring customers to write a check for the amount.
True
True or False: . 12. Not only do banks charge a fee for handling a dishonored check, but they also deduct the amount of the check from the account, as well.
True
True or False: 13. The journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by debit card.
True
True or False: 14. The source document for an electronic funds transfer is a check number.
False
True or False: 15. The source document for a debit card purchase is a memorandum.
True
True or False: 16. The purpose of a petty cash fund is to make small cash payments without writing checks.
True
True or False: 17. Businesses use petty cash when writing a check is not time or cost effective.
True
True or False: 18. A petty cash report is completed at the end of each business day.
False
True or False: 19. A memorandum is the source document for the entry to record replenishing the petty cash fund.
False
True or False: 20. When the petty cash fund is replenished, the balance of the petty cash account increases.
False
