Question 1

Plenty Co. established a petty cash fund of $150 on October 1. On October 10, the petty cash fund was replenished when there was $49 remaining and there were petty cash receipts for: office supplies, $47; transportation-in on inventory purchased, $32; and postage, $22. On October 15, the petty cash fund was decreased to $125 in total. Record the above transactions in general journal form.

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Question 2

The following information is available for the Victor Company for its March 31 bank reconciliation:
From the March 31 bank statement:

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Question 3

At the end of the current period, a company reported $725,000 in net credit sales and $100,000 in ending accounts receivable. Calculate this company's days' sales uncollected at the end of the current period.

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Question 4

A company reported net sales for 2014 of $265,000 and $545,000 for 2015. The year-end balances of accounts receivable were $39,000 for 2014 and $92,000 for 2015. Calculate the days' sales uncollected at the end of each year for this company and describe any changes in the apparent liquidity of the company's receivables.

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Question 5

On June 1, a company established a $75 petty cash fund. On June 27, the petty cash fund contains $5.25 in cash and the following paid petty cash receipts: postage, $19.50; office supplies, $36.25; and miscellaneous expense $14.00. Give the general journal entry to reimburse the fund on June 27.

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Question 6

Quibble Company established a $300 petty cash fund by issuing a check to the custodian on February 1. On February 15, the petty cash fund was replenished and increased to $800 in total. The contents of the petty cash fund at the time of the February 15 replenishment were: $$\begin{array} { | l | r | r | } 
\hline \text { Currency and coins } & & \$ 12 \
\hline \text { Petty cash receipts for: } & & \
\hline \text { Transportation-in for inventory } & \$ 39 & \
\hline \text { Delivery expense } & 88 & \
\hline \text { Repairs to office equipment } & 47 & \
\hline \text { Postage } & 64 & \
\hline \text { Entertainment of customers } & 53 & 299 \
\hline \text { Total } & & \$ 303 \
\hline
\end{array}$$ Prepare Quibble's general journal entry to record both the reimbursement and the increase of the petty fund on February 15.

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Question 7

The following information is available for the Topper Company for the month of July.
a. On July 31, after all transactions have been recorded, the balance in the company's Cash account has a balance of $15,244.
b. The company's bank statement shows a balance on July of $16,450.
c. Outstanding checks at July total $2,063.
d. A credit memo included with the bank statement indicates that the bank collected $570 on a note receivable for Topper. The $570 includes $550 principle and $20 interest.
e. A debit memo included with the bank statement shows a $107 NSF check from a customer, P. Flank.
f. A deposit placed in the bank's night depository on July 31 totaling $1,275 did not appear on the bank statement.
g. Included with the bank statement was a debit memorandum in the amount of $45 for check printing charges that have not been recorded on the company's books.
Prepare the July bank reconciliation for the Topper Company.

Accepted Answer

The answer of The following information is available for the...

Question 8

At the end of the day on March 15, the cash register's record shows $1,957, but the count of cash in the register is $1,965. Prepare the general journal entry to record the day's cash sales.

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The answer of At the end of the day on...

Question 9

A petty cash fund was originally established with a check for $100. On August 31, which is the period end, the petty cash fund included the following: $$\begin{array} { | l | r | } 
\hline \text { Petty cash receipts: } & \
\hline \text { Postage } & \$ 43.50 \
\hline \text { Office supplies } & 11.85 \
\hline \text { Office equipment repair } & 39.00 \
\hline \text { Cash } & 4.25 \
\hline
\end{array}$$ Prepare the general journal entry to record the replenishment of the petty cash fund on August 31.

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Question 10

The treasurer of a company is responsible for cash management. List five cash management principles that are essential for effective cash management.

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Question 11

Describe a bank reconciliation and discuss its purpose.

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Question 12

Umber Company's bank reconciliation for September is presented below. Prepare the necessary adjusting journal entries based on the reconciliation report. UMBER COMPANY
Bank Reconciliation
September 30
$\begin{array}{|l|r|l|r|r|}
\hline \text { Bank statement balance } & \$ 1,350 & \text { Book balanoe of cash } & & \$ 995 \
\hline \text { Add: } & & \text { Add: } & & \
\hline \text { Deposit in transit } & 1250 & \text { Proceeds of note } & 900 & \
\hline \text { Bank error } & 275 & \text { Less note oollection fee } & 25 & 875 \\hline & \$ 2,875 & & 1,870 \
\hline \text { Deduct: } & & \text { Deduct: } & & \
\hline \text { Outstanding checks } & 1,145 & \text { NSF ched plus processing fee } & & 125 \\hline & & \text { Bank service tharge } & & 15 \
\hline \text { Reconciled balance } & \$ 1,730 & \text { Reconciled balance } & & \$ 1,730 \
\hline
\end{array}$

Accepted Answer

The answer of Umber Company's bank reconciliation for September is...

Question 13

A company established a petty cash fund in November of the current year and experienced the following transactions affecting the fund during November: $\begin{array}{|l|l|l}
\hline\text { Nov. } 1 & \text { Established a } \$ 200 \text { petty cash fund. } \
\hline 5 & \text { Paid } \$ 55 \text { to acquire office supplies. } \\hline 8 & \begin{array}{l}
\text { Reimbur sed the company controller for } \$ 30 \text { spent on beverages for recruits (entertainment } \
\text { Expense) }
\end{array} \
\hline 18 & \text { Paid } \$ 45 \text { for postage. } \\hline 20 & \text { Paid } \$ 25 \text { for C.O.D. charges on merchandise irventory, terms FOB shipping point. } \
\hline 25 & \text { Paid } \$ 40 \text { for janitorial services. } \
\hline28 &\begin{array}{l}
\text { When sorting the petty cash receipts to replenish the fund, the custodian noted that there was } \$ 10 \
\text { cash remaining. }
\end{array}\\hline
\end{array}$ Prepare the journal entries to establish the fund on November 1 and to reimburse the fund on November 28.

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The answer of A company established a petty cash fund...

Question 14

The Sarbanes-Oxley Act (SOX) requires managers and auditors of companies whose stock is traded on an exchange to document and certify the system of internal controls. What are the specific requirements for auditors set forth by SOX?

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Question 15

Norman Co. had $5,925 million in sales and $1,155 million in ending accounts receivable for the current period. For the same period, Opal Co. reported $5,885 million in sales and $790 million in ending accounts receivable. Calculate the days' sales uncollected for both companies as of the end of the current period and indicate which company is doing a better job in managing the collection of its receivables.

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Question 16

Based on the above information, prepare a bank reconciliation for the Victor Company.
2. Prepare the necessary general journal entries to adjust cash to the reconciled balance.

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Question 17

Following are seven items a through g that would cause Rembrandt Company's book balance of cash to differ from its bank statement balance of cash.
a. A service charge imposed by the bank.
b. A check listed as outstanding on the previous period's reconciliation and still outstanding at the end of this month.
c. A customer's check returned by the bank is marked "Not Sufficient Funds(NSF)".
d. A deposit mailed to the bank on the last day of the current month and not recorded on this month's bank statement.
e. A check paid by the bank at its correct $190 amount recorded in error in the company's check register at $109.
f. An unrecorded credit memorandum indicating that bank collected a note receivable for Rembrandt Company and deposited the proceeds in the company's account.
g. A check written in the current period that is not yet paid or returned by the bank.
Indicate where each item, letters a-g, would appear on Rembrandt Company's bank reconciliation by placing its identifying letter in the parentheses in the proper section of the form below. $\begin{array}{|l|l|l|l|}
\hline\text { Bank statement cash balance }&&\text { Book balanoe of cash }\
\hline \text { Add: } & (\text { ) } & \text { Add: } & () \
\hline & () & & () \
\hline & () & & () \
\hline & () & & () \\hline \text { Deduct: } & () & \text { Deduct: } & () \
\hline & () & & () \
\hline & () & & () \
\hline & () & & () \
\hline\text { Reconciled balance }&&\text { Reconciled balance }\\hline
\end{array}$

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Question 18

When using a voucher system, what are the steps on the invoice approval checklist that must be completed before an invoice approval is complete and a voucher prepared?

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Question 19

On March 1, a company established a $75 petty cash fund. On March 12, the petty cash fund contains $3 in cash and the following paid petty cash receipts: transportation-in on merchandise inventory $14.25; postage, $19.50; and office supplies, $36. Give the general journal entry to reimburse the fund and to increase its amount to $150 on March 12.

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The answer of On March 1, a company established a...

Question 20

Describe the net method of accounting for purchases. Why might companies use the net method?

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Quiz 6: Cash and Internal Controls

The following information is available for the Victor Company for its March 31 bank reconciliation: From the March 31 bank statement: