Question Details

CHAPTER 8 INTERNAL CONTROL AND CASH PART 6

MULTIPLE CHOICE QUESTIONS

81. An employee authorized to sign checks should not record
a. owner cash contributions.
b. mail receipts.
c. cash disbursement transactions.
d. sales transactions.
82. A voucher system is a series of prescribed control procedures
a. to check the credit worthiness of customers.
b. designed to assure that disbursements by check are proper.
c. which eliminates the need for a sales journal.
d. specifically designed for small firms who may not have checking accounts.
83. Under a voucher system, a prenumbered voucher is prepared for every
a. cash receipt, regardless of source.
b. transaction entered into by the business.
c. expenditure except those made from petty cash.
d. journal entry.
84. A credit balance in Cash Over and Short is reported as a(n)
a. asset.
b. liability.
c. miscellaneous expense.
d. miscellaneous revenue.
85. The entry to replenish a petty cash fund includes a credit to
a. Petty Cash.
b. Cash.
c. Freight-in.
d. Postage Expense.
86. A debit balance in Cash Over and Short is reported as a
a. contra asset.
b. miscellaneous asset.
c. miscellaneous expense.
d. miscellaneous revenue.
Internal Control and Cash 8 - 13
87. A petty cash fund of $100 is replenished when the fund contains $3 in cash and receipts
for $93. The entry to replenish the fund would
a. credit Cash Over and Short for $4.
b. credit Miscellaneous Revenue for $4.
c. debit Cash Over and Short for $4.
d. debit Miscellaneous Expense for $4.
88. A petty cash fund is generally established in order to
a. pay for all merchandise purchased on account.
b. pay employees’ wages.
c. make loans internally to employees.
d. pay relatively small expenditures.
89. A petty cash fund should be replenished
a. every day.
b. at the end of every accounting period.
c. once a year.
d. as soon as an expense is paid from the fund.
90. A petty cash fund should not be used for
a. postage due.
b. loans to the petty cash custodian.
c. taxi fares.
d. customer lunches.
91. The size of the petty cash fund is dependent on
a. the wishes of the custodian of the fund.
b. anticipated disbursements for the year.
c. anticipated disbursements for a three- to four-week period.
d. the size of the regular cash account.
92. Replenishing the petty cash fund requires
a. a debit to Cash.
b. a credit to Petty Cash.
c. a debit to various expense accounts.
d. no accounting entry.
93. Entries are made to the Petty Cash account when
a. establishing the fund.
b. making payments out of the fund.
c. recording shortages in the fund.
d. replenishing the fund.
94. A $100 petty cash fund has cash of $15 and receipts of $80. The journal entry to replenish
the account would include a credit to
a. Cash for $85.
b. Petty Cash for $85.
c. Cash Over and Short for $5.
d. Cash for $80.
8 - 14 Test Bank for Accounting Principles, Eighth Edition
95. A $100 petty cash fund has cash of $17 and receipts of $80. The journal entry to replenish
the account would include a
a. debit to Cash for $80.
b. credit to Petty Cash for $83.
c. debit to Cash Over and Short for $3.
d. credit to Cash for $80.
96. A $100 petty cash fund has cash of $18 and receipts of $86. The journal entry to replenish
the account would include a
a. debit to Cash for $86.
b. credit to Petty Cash for $86.
c. credit to Cash Over and Short for $4.
d. credit to Cash for $86.
97. All of the following are parties to a check except the
a. bank.
b. Federal Reserve.
c. maker.
d. payee.
98. When opening a bank checking account, a signature card
a. indicates to whom money is to be paid.
b. indicates each person authorized to sign checks on the account.
c. is attached to all pre-printed checks.
d. is required only when dealing with an out-of-state bank.
99. Which one of the following is not necessarily a party to a check?
a. Maker
b. Buyer
c. Payee
d. Payer
100. A bank statement
a. lets a depositor know the financial position of the bank as of a certain date.
b. is a credit reference letter written by the depositor's bank.
c. is a bill from the bank for services rendered.
d. shows the activity which increased or decreased the depositor's account balance.