Question 1

The following information relates to the bank account of Doug's Sky Diving Supply Store on June 30.$\begin{array}{llr}
  \text { Balance per bank statement } &&\$5,327\
 \text {Balance per books as of June 30  } &&9,265\
 \text {Outstanding checks:  } &\
 \# 1007 & \$ 241 \
\# 1008 & 67 \
\# 1009  & 597\
\text { Deposits in transit } & 229 \
& 4,111 \
\text { Bank service charges } & 98 \
\text { NSF check } & 412 \
\text { Credit memo for interest earned } & 16 
\end{array}$

Error: Check written and recorded by bank as $454 was subtracted from the checkbook as $445.
The check was used to pay the telephone bill.
Required:
Prepare a bank reconciliation as of June 30.

Accepted Answer

The answer of The following information relates to the bank...

Question 2

A special multi-column record that supplements the regular accounting records and from which no posting is done is called a

Accepted Answer

A petty cash payment record is used to track small cash transactions and is not posted to the general ledger, serving as a supplementary record.

Question 3

Cash Sales from the cash register tapes totaled $882.There is a change fund of $100.The cash count indicates that $984 is in the cash drawer.What journal entry would be required?

Accepted Answer

The journal entry should account for the cash sales, change fund, and the actual cash counted in the drawer. The entry should also include any difference or discrepancy between the expected and actual amounts, which is recorded as Cash Short and Over.

Debit Cash for the total amount of cash counted in the drawer, including the change fund: $100 + $984 = $1084.
Debit Cash Short and Over for the difference between the cash counted and the cash sales: $1084 - $882 = $202 (which will be credited if there is excess cash).
Credit Revenues for the total cash sales: $882.
Therefore, the correct journal entry is:

Debit: Cash $884
Debit: Cash Short and Over $2
Credit: Revenues $882

Question 4

Using the following information,prepare the journal entries to:
a.
Establish a $200 petty cash fund on January 2.
b.
Reimburse the petty cash fund at the end of the month.
 $\begin{array}{lclc}
 \underline{\text { Date}}& \underline{\text {  Voucher No. }}& \underline{\text { Purpose }} & \underline{\text { Amount }}\
\text { Jan. }\quad2&1 & \text { Office supplies } & \$ 15 \
\quad\quad\quad6 & 2 & \text { Withdrawal by owner } & 20 \
\quad\quad\quad7 & 3 & \text { Lunch with client } & 35\
\quad\quad\quad7 & 4 & \text { Postage } & 12 \
\quad\quad\quad8 & 5 & \text { Donation to United Way } & 25 \
\quad\quad\quad12 & 6 & \text { Telephone repair } & 32 \
\quad\quad\quad23 & 7 & \text { Office supplies } & 15 \
\quad\quad\quad28 & 8 & \text { Lunch with client } & 40
\end{array}$

Accepted Answer

The answer of Using the following information,prepare the journal entries...

Question 5

Sal's Surf Shop deposits all receipts in the bank and makes all payments by check.On July 31 the cash account had a balance of $6,105.42.The bank statement on July 31 reported a balance of $4,146.46.Upon comparing the bank statement to the books,the following items were found.
?
?
 a. A. bank debit memo issued for an NSF check from a customer of $ \$ 21.25 $.
b. Abank credit memo issued for interest of $ \$ 8.50 $ earned during the month.
c. During the evening of July 31 , a deposit of $ \$ 1,948.25 $ was made, which is not shown on the bank statement.
d. A. bank debit memo issued for $ \$ 18.50 $ for bank service charges.
e. Checks for the amounts of $ \$ 34.00, \$ 17.85 $, and $ \$ 93.25 $ were written during July but have not yet been received by the bank.
f. The reconciliation from the previous month, June, showed outstanding checks of $ \$ 260.80 $. One of these checks in the amount of $ \$ 7.38 $ has not yet been received by the bank.
g. After comparing the canceled checks to the bank statement, it was discovered that a check written for the amount of $ \$ 18.90 $ was deducted as $ \$ 19.80 $ by the bank.
h. It was discovered that a check written to a creditor in the amount of $ \$ 145.60 $ was recorded in the books as $ \$ 14.56 $. Required:
1.Prepare a bank reconciliation as of July 31.
2.Prepare the necessary general journal entries from the bank reconciliation.

Accepted Answer

The answer of Sal's Surf Shop deposits all receipts in...

Question 6

In reconciling a bank statement,the bank statement balance is $1,000 and the balance per books is $1,205.A bank service charge is $15; a deposit in transit totals $500,and outstanding checks total $300.The adjusted book balance is

Accepted Answer

Starting with the balance per books of $1,205, we need to make the following adjustments:

1. Subtract outstanding checks of $300: $1,205 - $300 = $905
2. Add the deposit in transit of $500: $905 + $500 = $1,405
3. Subtract the bank service charge of $15: $1,405 - $15 = $1,390

Therefore, the adjusted book balance is $1,390, which is closest to answer choice C ($1,190).

Question 7

To complete transactions with the bank,electronic funds transfer (EFT)systems use

Accepted Answer

Electronic funds transfer (EFT) systems use a computer to initiate and complete transactions, making it the best choice among the given options. Checks, currency, drafts, and money orders are all physical forms of payment that require manual processing, whereas EFT systems allow for quick and secure transfer of funds electronically.

Question 8

Post the differences between the cash count and the cash register tape to the Cash Short and Over T account.Assume a change fund of $100.
 $$\begin{array} { r r r } 
\underline{\text { Date } }&\underline{ \text { Cash Register Tape }} &\underline{ \text { Cash Count }} \
 \text { Sept. } 7 & \$ 1,295.89 & \$ 1,402.89 \
8 & 1,678.55 & 1,787.55 \
9 & 941.76 & 1,044.76 \
10 & 1,446.62 & 1,545.62 \
11 & 1,614.13 & 1,714.13
\end{array}$$ ?
 $\begin{array}{cc}\text {Cash Short and Over  }\\hline
\begin{array}{ll|l}
& \
\end{array}
\end{array}$ 1. What is the amount of cash sales for the week?
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$_________
2. What is the balance in the cash short and over account?
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$_________
3. Does the balance in the cash short and over account represent a shortage or overage?$\quad$$_________
4. How much cash was deposited?$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$_________

Accepted Answer

The answer of Post the differences between the cash count...

Question 9

Checks deposited by the depositor that are not paid because the drawer did not have sufficient funds are called ____________________.

Accepted Answer

The answer of Checks deposited by the depositor that are...

Question 10

A petty cash fund of $200 has $27 in cash,$170 in petty cash vouchers,and $3 in miscellaneous receipts not included with the petty cash vouchers.The debit to the Cash Short and Over would be

Accepted Answer

The total of cash and vouchers should equal the petty cash fund amount. Here, $27 (cash) + $170 (vouchers) + $3 (miscellaneous receipts) = $200, which matches the petty cash fund amount, indicating there is no shortage or overage.

Question 11

The check written to establish the petty cash fund is entered in the journal by

Accepted Answer

The check written to establish the petty cash fund is used to transfer a certain amount of cash from the general cash account to the petty cash account. This means that the cash account is being credited and the petty cash account is being debited. Therefore, the entry would be to debit Petty Cash and credit Cash. Thus, the correct answer is D, debiting Petty Cash and crediting Cash.

Question 12

The person presenting the check for payment is called the ____________________.

Accepted Answer

The answer of The person presenting the check for payment...

Question 13

The petty cash payments record indicates classified expenditures as follows: Automobile Expense,$20; Supplies Expense,$12; Postage Expense,$6; and Miscellaneous Expense,$5.The transaction would include

Accepted Answer

When recording petty cash payments, expenses are debited to reflect the increase in expenses. Hence, debiting Automobile Expense is correct as it reflects the use of petty cash for automobile-related expenses.

Question 14

The balance in the checking account of York Company as of July 31 is $5,852.16.The bank statement shows an ending balance of $4,870.00.The following information is discovered by comparing checks deposited and written and noting service charges and other debit and credit memos shown on the bank statement.
 $\begin{array} {l r }
\text { Deposits in transit:}\
 7 / 23 & \$ 220.00 \
 7 / 27 & 615.00 \
\
\text { Outstanding checks: } & \
\text { No. } 530 & \$ 120.00 \
\text { No. } 531 & 36.00 \
\text { No. } 532 & 278.30\
\
\text { Unrecorded ATM withdrawal: }\
7 / 30 & \$ 540.00 \\
\text { Bank service charge } & \$ 42.00
\end{array}$
 
$\begin{array}{ll}
\text { Error on check no. } 954 & \begin{array}{l}
\text { Recorded in checkbook as } \$ 83.82 \text {, but was actually written for } \
\$ 83.28 \text {, and cleared the bank correctly. }
\end{array}
\end{array}$ 
Required:
Determine the ending balances to reconcile the bank statement and checkbook.

Accepted Answer

The answer of The balance in the checking account of...

Question 15

On May 1,a petty cash fund was established for $200.The following vouchers were issued during May.
Required:
 $\begin{array}{rcllc}
 \underline{\text { Date}}& \underline{\text {  Voucher  }}& \underline{\text { Purpose }} & \underline{\text { Amount }}\
\text { May } \quad 1 & 1 & \text { Office supplies } & \$ 3.00 \
3 & 2 & \text { Birthday gift for office worker (misc.) } & 15.00 \
5 & 3 & \text { Mileage reimbursement } & 5.00 \
7 & 4 & \text { Postage due } & 2.00\
8 & 5 & \text { Office supplies } & 4.00 \
11 & 6 & \text { Donation-Goodwill (contribution exp.) } & 10.00 \
15 & 7 & \text { Telephone call (telephone exp.) } & 5.00 \
21 & 8 & \text { Mileage reimbursement } & 11.00 \
23 & 9 & \text { Withdrawal by owner (Carla Sanchez) } & 20.00 \
25 & 10 & \text { Postage due } & 3.50 \
26 & 11 & \text { Office supplies } & 17.00 \
28 & 12 & \text { Copier repair (misc.) } & 18.50
\end{array}$ 
1.Prepare the journal entry to establish the petty cash fund on May 1.
2.Record the vouchers in the petty cash record.Total and rule the petty cash record.
3.Prepare the journal entry to replenish the petty cash fund.Make the appropriate entry in the petty cash record.
  $\text { PETTY CASH PAYMENTS FOR THE MONTH OF May, 20-- } \quad \text { Page } 1 >$
$\begin{array}{|c|c|c|c|}
\hline \text { Day } & \text { Description } \quad\quad\quad\quad\quad\quad& \text { Voucher No. } & \text { Total Amount } \
\hline & \text { Received in fund... } & & \
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline
\end{array}$

Accepted Answer

The answer of On May 1,a petty cash fund was...

Question 16

Post the differences between the cash count and the cash register tape to the Cash Short and Over T account.Assume a change fund of $100.
 $$\begin{array} { r r c c } 
 \underline{\text { Date }} &  \underline{\text { Cash Register Tape }} &  \underline{\text { Cash Count }} \
\text { March } \quad 3 & \$ 1,495.89 & \$ 1,601.89 \
4 & 1,878.55 & 1,986.55 \
5 & 741.76 & 843.76 \
6 & 1,646.62 & 1,744.62 \
7 & 1,714.13 & 1,814.13
\end{array}$$ ?
 $\begin{array}{cc}\text {Cash Short and Over }\\hline
\begin{array}{ll|l}
& \
\end{array}
\end{array}$ 1. What is the amount of cash sales for the week?$\underline{\quad\quad}$
2. What is the balance in the cash short and over account?$\underline{\quad\quad}$
3. Does the balance in the cash short and over account represent a shortage or overage?$\underline{\quad\quad}$
4. How much cash was deposited?$\underline{\quad\quad}$

Accepted Answer

The answer of Post the differences between the cash count...

Question 17

To reconcile the bank statement,which of the following amounts would be added to the bank statement balance?

Accepted Answer

Deposits in transit are amounts that have been recorded in the company's books but not yet reflected in the bank statement, so they need to be added to the bank statement balance to reconcile it.

Question 18

Check No.450,a payment of $54 for the telephone bill,was incorrectly entered on the check stub as $45.Which of the following adjustments needs to be made?

Accepted Answer

The correct amount of $54 was paid but incorrectly recorded as $45 on the check stub. This means that the book balance is overstated by $9 ($54 - $45). Therefore, the adjustment required is to decrease the book balance by $9.

Question 19

Bringing the book and bank balances into agreement is called ____________________.

Accepted Answer

The answer of Bringing the book and bank balances into...

Question 20

____________________ represent items that the bank deducts from the depositor's account.

Accepted Answer

The answer of ____________________ represent items that the bank deducts...

Quiz 7: Accounting for Cash