Question 1

Indicate which effect(s)each situation will have:
1.New check written
2.Recorded in the general journal
3.Recorded in auxiliary petty cash record
4.Petty cash voucher prepared
-________ Bought a book of stamps

Accepted Answer

The answer of Indicate which effect(s)each situation will have:
1.New check...

Question 2

A company would use a change fund if:
A)there are cash transactions daily.
B)they want to pay the postage expense without writing a check.
C)the owner wants to make personal withdrawals easily.
D)None of these are correct.

Accepted Answer

A change fund is typically used for cash transactions, such as giving customers change, and is commonly found in businesses like retail stores or restaurants. It allows the company to have a designated amount of cash on hand for these transactions without having to constantly withdraw money from their bank account. Option B is incorrect because paying a postage expense can easily be done with a check or credit card, and option C is incorrect because a change fund is not intended for personal withdrawals by the owner.

Question 3

Prepare journal entries for the following petty cash fund transactions:
Nov. 1 Established a $\$ 75$ petty cash fund.
15 Increased the petty cash fund to have a new balance of $\$ 100$.
30 Replenished the petty cash fund. Currency and coins remaining were $\$ 30$.
Approved paid vouchers were: $10 donation expense; $16 postage expense; $30 office supplies expense; and $20 misc. expense.

Accepted Answer

The answer of Prepare journal entries for the following petty...

Question 4

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts.The facts are: total cash register tapes $400; total coins and currency $404.The summary journal entry to record the day's transactions would include a:
A)$400 debit to Cash; $4 debit to Cash Short/Over; and $404 credit to Sales.
B)$404 debit to Cash; $4 credit to Cash Short/Over; and $400 credit to Sales.
C)$404 debit to Cash and $404 credit to Sales.
D)$400 debit to Cash and $400 credit to Sales.

Accepted Answer

The total coins and currency received were $404, which means that this amount should be debited to Cash. However, the Cash register tapes only show $400, so there is a shortage of $4. This shortfall should be debited to Cash Short/Over account. The total sales made for the day should be credited to Sales, which in this case is $400. So the correct journal entry would be: $404 debit to Cash, $4 credit to Cash Short/Over, and $400 credit to Sales. Option B is the only one that matches this entry.

Question 5

An employee assigned the responsibility for overseeing the petty cash fund is called the custodian.

Accepted Answer

A custodian is a person assigned to manage and oversee the petty cash fund.

Question 6

Which of the following transactions would most likely not be recorded in an auxiliary petty cash record?
A)Purchase of first aid supplies
B)Purchase of postage stamps
C)Payment on a $600 utility bill
D)Payment of gas for the company vehicle

Accepted Answer

The payment of a $600 utility bill would typically be a larger expense than what would be considered a petty cash purchase, and would therefore be recorded in the general ledger or accounts payable system instead.

Question 7

The Petty Cash account should always be debited when the fund is replenished.

Accepted Answer

When replenishing the Petty Cash fund, the Petty Cash account is not debited; instead, the expenses recorded by the petty cash receipts are debited to their respective expense accounts, and the Cash account is credited.

Question 8

The normal balance of the Petty Cash account is a credit.

Accepted Answer

The normal balance of the Petty Cash account is a debit, as it is an asset account and assets increase on the debit side.

Question 9

The change fund is what type of account?
A)Expense
B)Revenue
C)Asset
D)Liability

Accepted Answer

The change fund is a type of asset account as it represents cash or coins set aside to provide change to customers.

Question 10

Indicate which effect(s)each situation will have:
1.New check written
2.Recorded in the general journal
3.Recorded in auxiliary petty cash record
4.Petty cash voucher prepared
-________ Owner withdrew money from the company for personal use

Accepted Answer

The answer of Indicate which effect(s)each situation will have:
1.New check...

Question 11

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

Accepted Answer

Petty Cash is used for small expenses like postage stamps and office supplies.

Question 12

Petty Cash is an asset shown on the balance sheet.

Accepted Answer

Petty Cash is a current asset that is shown on the balance sheet as it represents the cash on hand that is used for small and immediate expenses.

Question 13

Prepare journal entries for the following petty cash fund transactions:
Sept. 1 Established a $\$ 200$ petty cash fund.
30 Replenished the petty cash fund. Currency and coins remaining was $\$ 128$; approved paid
vouchers were: $12 donation expense; $18 postage; $24 office supplies expense; and $26 miscellaneous expense.

Accepted Answer

The answer of Prepare journal entries for the following petty...

Question 14

The petty cash overage was not recorded.This would cause:
A)revenues to be overstated.
B)revenues to be understated.
C)expenses to be overstated.
D)expenses to be understated.

Accepted Answer

The answer of The petty cash overage was not recorded.This...

Question 15

Samantha's Tutoring Service's $200 petty cash fund has a shortage of $4.The facts are: $80 in valid receipts for expenses; $116 in coins and currency.The journal entry to replenish the petty cash fund would include a:
A)credit to Cash for $80.
B)credit to Petty Cash for $84.
C)credit to Cash Short/Over for $4.
D)debit to Cash Short/Over for $4.

Accepted Answer

The shortage of $4 means that the actual cash on hand is less than the receipts and the expected cash balance. To account for this shortage, a debit to Cash Short/Over is needed.

Question 16

Indicate which effect(s)each situation will have:
1.New check written
2.Recorded in the general journal
3.Recorded in auxiliary petty cash record
4.Petty cash voucher prepared
-________ Filled up the company's van with gas

Accepted Answer

The answer of Indicate which effect(s)each situation will have:
1.New check...

Question 17

Indicate which effect(s)each situation will have:
1.New check written
2.Recorded in the general journal
3.Recorded in auxiliary petty cash record
4.Petty cash voucher prepared
-________ Establishment of petty cash

Accepted Answer

The answer of Indicate which effect(s)each situation will have:
1.New check...

Question 18

Indicate which effect(s)each situation will have:
1.New check written
2.Recorded in the general journal
3.Recorded in auxiliary petty cash record
4.Petty cash voucher prepared
-________ Bought Supplies on account

Accepted Answer

Buying supplies on account means the transaction is recorded as a liability (accounts payable) and an asset (supplies) in the general journal. It does not involve writing a check, using petty cash, or preparing a petty cash voucher.

Question 19

The entry to replenish a $300 petty cash fund,which has cash of $140 and valid receipts for $148,would include:
A)a credit to Cash for $160.
B)a debit to Petty Cash for $160.
C)a credit to Cash for $148.
D)a credit to Petty Cash for $148.

Accepted Answer

The correct entry to replenish the petty cash fund involves crediting Cash for $160. This is because the fund needs to be brought back up to its original amount of $300. With $140 in cash and $148 in valid receipts, the total amount spent from the fund is $288 ($140 + $148), leaving a shortfall of $160 ($300 - $140) to be replenished.

Question 20

If the ending balance in the Cash Short/Over account is a credit,it indicates that cash shortages have exceeded cash overages for the period.

Accepted Answer

The answer of If the ending balance in the Cash...

Quiz 6: Banking Procedure and Control of Cash

Indicate which effect(s)each situation will have: 1.New check written 2.Recorded in the general journal 3.Recorded in auxiliary petty cash record 4.Petty cash voucher prepared -________ Bought a book of stamps

A company would use a change fund if:

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts.The facts are: total cash register tapes $400; total coins and currency $404.The summary journal entry to record the day's transactions would include a:

An employee assigned the responsibility for overseeing the petty cash fund is called the custodian.

Which of the following transactions would most likely not be recorded in an auxiliary petty cash record?

The Petty Cash account should always be debited when the fund is replenished.

The normal balance of the Petty Cash account is a credit.

The change fund is what type of account?

Indicate which effect(s)each situation will have: 1.New check written 2.Recorded in the general journal 3.Recorded in auxiliary petty cash record 4.Petty cash voucher prepared -________ Owner withdrew money from the company for personal use

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

Petty Cash is an asset shown on the balance sheet.

The petty cash overage was not recorded.This would cause:

Samantha's Tutoring Service's $200 petty cash fund has a shortage of $4.The facts are: $80 in valid receipts for expenses; $116 in coins and currency.The journal entry to replenish the petty cash fund would include a:

Indicate which effect(s)each situation will have: 1.New check written 2.Recorded in the general journal 3.Recorded in auxiliary petty cash record 4.Petty cash voucher prepared -________ Filled up the company's van with gas

Indicate which effect(s)each situation will have: 1.New check written 2.Recorded in the general journal 3.Recorded in auxiliary petty cash record 4.Petty cash voucher prepared -________ Establishment of petty cash

Indicate which effect(s)each situation will have: 1.New check written 2.Recorded in the general journal 3.Recorded in auxiliary petty cash record 4.Petty cash voucher prepared -________ Bought Supplies on account

The entry to replenish a $300 petty cash fund,which has cash of $140 and valid receipts for $148,would include:

If the ending balance in the Cash Short/Over account is a credit,it indicates that cash shortages have exceeded cash overages for the period.