Question 1

________ Owner withdrew $1,000 from the company for personal use

Accepted Answer

The answer of ________ Owner withdrew $1,000 from the company...

Question 2

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

Accepted Answer

The entry to replenish the petty cash fund involves crediting Cash for the amount needed to bring the fund back to its original balance. The fund originally had $300, and there is $140 cash left, so $160 is needed to replenish it.

Question 3

The Petty Cash account should never be debited when the fund is replenished.

Accepted Answer

When the petty cash fund is replenished, typically the company will debit the appropriate expense accounts for the cash expenditures made from the fund and credit the Petty Cash account for the amount of the replenishment. The Petty Cash account should not be debited because it is an asset account used to track the amount of cash left in the fund, not an expense account.

Question 4

________ 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 5

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

Accepted Answer

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

Question 6

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

Accepted Answer

This statement is true. The custodian is the employee who is responsible for overseeing and managing the petty cash fund. They are typically in charge of making withdrawals, reconciling the fund, and ensuring that all expenses are properly documented and accounted for.

Question 7

________ Bought coffee and rolls for a business meeting and used cash

Accepted Answer

The answer of ________ Bought coffee and rolls for a...

Question 8

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

Accepted Answer

A debit balance in the Cash Short and Over account indicates that the company has experienced more cash shortages than cash overages during the period. This means that more money was taken out of the register than was put in, resulting in a shortage of cash.

Question 9

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

Accepted Answer

Petty cash is commonly used to pay for small expenses such as postage stamps, office supplies, and other miscellaneous items.

Question 10

Petty Cash is an asset shown on the income statement.

Accepted Answer

Petty Cash is not an asset that is shown on the income statement but rather it is shown on the balance sheet as a current asset. The income statement shows the revenues, expenses, and net income or loss of a business over a specific period of time.

Question 11

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 12

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:

Accepted Answer

The cash on hand is $404, which should be debited to Cash. The cash register tapes show $400, so Service Revenue should be credited for $400. The $4 difference is credited to Cash Short and Over.

Question 13

________ Establishment of petty cash

Accepted Answer

The answer of ________ Establishment of petty cash...

Question 14

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

Accepted Answer

Payment of rent is a significant expenditure and would be recorded in the general ledger as a regular expense, rather than in the auxiliary petty cash record. The other options are more likely to be petty cash expenses that would be recorded in the auxiliary petty cash record.

Question 15

Cash Short and Over is:

Accepted Answer

Cash Short and Over account can have either a debit balance or a credit balance depending on whether the cash received by the business is less or more than the cash disbursed. If there is a short, then it will be recorded as an expense, and if there is an over, then it will be recorded as revenue. Therefore, it is a Misc. Expense or Misc. Revenue account depending on the balance in the account.

Question 16

A company would use a change fund if:

Accepted Answer

A change fund is used to provide a starting amount of petty cash for daily cash transactions, such as providing change to customers or making small purchases. It ensures there is always cash available on hand for such transactions without requiring constant trips to the bank. Options B, C, and D do not apply to the purpose of a change fund.

Question 17

The change fund is what type of account?

Accepted Answer

The change fund is an asset account because it represents cash that is available to be used for making change or providing small amounts of cash to customers.

Question 18

Sam's Tutoring Service's $500 petty cash fund has a shortage of $4.The facts are: $180 in valid receipts for expenses;$316 in coins and currency.The journal entry to replenish the petty cash fund would include a:

Accepted Answer

The shortage of $4 means that the actual cash and receipts do not add up to the $500 fund. The entry to replenish the fund would include a debit to Cash Short and Over for $4 to account for the discrepancy.

Question 19

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

Accepted Answer

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

Question 20

________ Filled up the company's truck with gas and used cash

Accepted Answer

The answer of ________ Filled up the company's truck with...

Quiz 6: Banking Procedure and Control of Cash