Unit 5

Question 1

A bank account from which payments can be ordered by a depositer

Answer 1

checking account

Question 2

A bank form which lists the checks, currency, and coins an account holder is adding to the bank account

Answer 2

deposit slip

Question 3

A signature or stamp on the back of a check, transferring ownership

Answer 3

endorsement

Question 4

An endorsement consisting only of the endorsers signature

Answer 4

blank endorsement

Question 5

An endorsement indicating a new owner of a check

Answer 5

special endorsement

Question 6

An endorsement restricting further transfer of a checks ownership

Answer 6

restrictive endorsement

Question 7

A check with a future date on it

Answer 7

postdated check

Question 8

A check that cannot be processed because the maker has made it invalid

Answer 8

voided check

Question 9

A report of deposits, withdrawals, and bank balances sent to a depositor by a bank

Answer 9

bank statement

Question 10

A check which has been paid by the bank

Answer 10

canceled check

Question 11

A check that a bank refuses to pay

Answer 11

dishonored check

Question 12

A check dishonored by the bank because of insufficient funds in the account of the maker of the check

Answer 12

NSF check

Question 13

A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents

Answer 13

electronic funds transfer

Question 14

A bank card that automatically deducts the amount of purchase from the checking account of the cardholder

Answer 14

debit card

Question 15

An amount of cash kept on hand and used for making small payments

Answer 15

petty cash

Question 16

A form showing proof of a petty cash payment.

Answer 16

petty cash slip

Question 17

A petty cash on hand amount that is less than a recorded amount

Answer 17

cash short

Question 18

A petty cash on hand amount that is more than a recorded amount

Answer 18

cash over

Question 19

Debit and Credit?

Received bank statement showing bank service charge

Answer 19

Debit (Miscellaneous Expense)
Credit (Cash)

Question 20

Debit and Credit?

Received notice from the bank of a dishonored check from J. Erlandson

Answer 20

Debit: Accounts Receivable
Credit: Cash

Question 21

Debit and Credit?

Paid cash on account to Fargo Supplies using EFT

Answer 21

Debit: Accounts Payable
Credit: Cash

Question 22

Debit and Credit?

Purchased supplies using a debit card

Answer 22

Debit: Supplies
Credit: Cash

Question 23

Debit and Credit?

Paid cash to establish a petty cash fund

Answer 23

Debit: Petty Cash
Credit: Cash

Question 24

Debit and Credit?

Paid cash to replenish a petty cash fund $50 ; supplies $35, miscellaneous expense $14, cash short, #1

Answer 24

Debit: Cash Short and Over
Credit: Cash

Question 25

T or F: Because cash transactions occur more frequently than other transactions, there is more chance for making recording errors affecting cash

Answer 25

True

Question 26

T or F: When a deposit is made in a bank account, the bank issues a check

Answer 26

False

Question 27

T or F: There are three types of endorsements commonly used: blank, special, and restrictive

Answer 27

True

Question 28

T or F: A check with a blank endorsements can be cashed by anyone who has possession of the check

Answer 28

True

Question 29

T or F: When writing a check the first step is to prepare the check

Answer 29

False

Question 30

T or F: Most banks do not look at the date the check is written and will withdraw money from the depositors account anytime

Answer 30

False

Question 31

T or F: The amount of a check is written twice on the check

Answer 31

True

Question 32

T or F: A check that contains minor errors can be corrected neatly and initialed

Answer 32

True

Question 33

T or F: An important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement

Answer 33

True

Question 34

T or F: An outstanding check is one that has not yet been issued

Answer 34

False

Question 34

T or F: Banks deduct service charges from customers checking accounts without requiring customers to write a check for the amount

Answer 34

True

Question 35

T or F: Not only do banks charge a fee for handling a dishonored check, but they also deduct the amount of the check from the account aswell

Answer 35

True

Question 36

T or F: 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

Answer 36

True

Question 37

T or F: The source document for an electronic funds transfer is a check number

Answer 37

False

Question 38

T or F: The purpose of a petty cash fund is to make small cash payments without writing checks

Answer 38

True

Question 39

T or F: The source document for a debit card purchase is a memorandum

Answer 39

True

Question 40

T or F: Businesses use petty cash when writing a check is not time or cost effective

Answer 40

True

Question 41

T or F: A petty cash report is completed at the end of each business day

Answer 41

False

Question 42

T or F: A memorandum is the source document for the entry to record replenishing the party

Answer 42

False

Question 43

T or F: When the petty cash fund in replenished, the balance of the petty cash account increases

Answer 43

False