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Chapter 5 Accounting
Terms and whatnot
| Checking Account | A bank account from which payments can be ordered by a depositor |
| Deposit Slip | A bank form which lists the checks, currency, and coins an account holder is adding to the bank account |
| Endorsement | A signature or stamp on the back of a check, transferring ownership |
| Blank Endorsement | An endorsement consisting only of the endorser's signature |
| Special Endorsement | An endorsement indicating a new owner of a check |
| Restrictive Endorsement | An endorsement restricting further transfer of a check's ownership |
| Postdated Check | A check with a future date on it |
| Voided Check | A check that cannot be processed because the maker has made it invalid |
| Bank Statement | A report of deposits, withdrawals, and bank balances sent to a depositor by a bank |
| Canceled Check | A check which has been paid by the bank |
| Dishonored Check | A check that a bank refuses to pay |
| NSF Check | A check dishonored by the bank because of insufficient funds in the account of the maker of the check |
| Electronic Funds Transfer | A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents |
| Debit Card | A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder |
| Petty Cash | An amount of cash kept on hand and used for making small payments |
| Petty Cash Slip | A form showing proof of a petty cash payment |
| Cash Short | A petty cash on hand amount that is less than a recorded amount |
| Cash Over | A petty cash on hand amount that is more than a recorded amount |
| True | Because cash transactions occur more frequently than other transactions, there is more chance for making recording errors affecting cash |
| False | When a deposit is made in a bank account, the bank issues a check (Correct Answer. - receipt) |
| True | There are three types of endorsements commonly used: blank, special, and restrictive |
| True | A check with a blank endorsement can be cashed by anyone who has possession of the check |
| False | When writing a check, the first step is to prepare the check (Correct Answer. - Write amount of check) |
| False | Most banks do not look at the date the check is written and will withdraw money from the depositor's account anytime (Correct Answer. - Won't cash future checks) |
| True | The amount of a check is written twice on each check |
| False | A check that contains minor errors can be corrected neatly and initialed (Correct Answer. - Use a new check) |
| True | An important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement |
| False | An outstanding check is one that has not yet been issued (Correct Answer. - Outstanding checks are those checks issued by a depositor but not yet reported on a banks statement) |
| True | Banks deduct service charges from customers' checking accounts without requiring customers to write a check for the amount |
| True | Not only do banks charge a fee for handling a dishonored check, but they also deduct the amount of the check from the account as well |
| True | The journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by debit card |
| False | The source document for an electronic funds transfer is a check number (Correct Answer. - Memorandum) |
| True | The source document for a debit card purchase is a memorandum |
| True | The purpose of a petty cash fund is to make smal cash payments without writing checks |
| True | Businesses use petty cash when writing a check is not time or cost effective |
| False | A petty cash report is completed at the end of each business day (Correct Answer. - Monthly) |
| False | A memorandum is the source document for the entry to record replenishing the petty cash fund (Correct Answer. - Check) |
| False | When the petty cash fund is replenished, the balance of the petty cash account increases (Correct Answer. - stays the same) |
Created by:
vestubbe