Chapter 5 final

Question 1

a statement that guides the ethical behavior of a company and its employees

Answer 1

code of conduct

Question 2

a bank account from which payments can be ordered by depositor

Answer 2

checking account

Question 3

a signature or stamp on the back of a check, transferring ownership

Answer 3

endorsement

Question 4

an endorsement consisting only of the endorser’s signature

Answer 4

blank endorsement

Question 5

an endorsement indicating a new owner of a check

Answer 5

special endorsement

Question 6

an endorsement restricting further transfer of a check’s ownership

Answer 6

restrictive endorsement

Question 7

a check with a future date on it

Answer 7

postdated check

Question 8

a report of deposits, withdrawals, and bank balances sent to a depositor by a bank

Answer 8

bank statement

Question 9

a check that a bank refuses to pay

Answer 9

dishonored check

Question 10

a computerized cash payment system that transfers funds without the use of checks, currency, or other paper documents

Answer 10

electronic funds transfer

Question 11

a bank card that automatically deducts the amount of a purchase from the checking account of the carholder

Answer 11

debit card

Question 12

an amount of cash kept o hand and used for making small payments

Answer 12

petty cash

Question 13

a form showing proof of a petty cash payment

Answer 13

petty cash slip

Question 14

received bank statement showing bank service charge

Answer 14

miscellaneous expense

Question 15

received notice from a bank of a dishonored check from R. Sandell

Answer 15

Accounts Receivable- R. Sandell

Question 16

paid cash on account to suburban office supplies using eft

Answer 16

Accounts Payable- Suburban Office Supplies

Question 17

purchased supplies using a debit card

Answer 17

supplies

Question 18

paid cash to establish a petty cash fund

Answer 18

petty cash

Question 19

paid cash to replenish a petty cash fund: $12.00; supplies, $3.50; miscellaneous expense, $8.59

Answer 19

supplies, miscellaneous expense

Question 20

Because cash transactions occur more frequently than other transactions, the chances for making recording errors affecting cash are less

Answer 20

false

Question 21

when a deposit is made in a bank account, the bank issues a receipt

Answer 21

true

Question 22

there are four types of endorsements commonly used: blank, special, original, and restrictive

Answer 22

false

Question 23

a check with a blank endorsement can be cashed by anyone who has a possession of the check

Answer 23

true

Question 24

when writing a check, the first step is to prepare the check stub

Answer 24

true

Question 25

most banks do not look at the date the check is written and will withdraw money from the depositor’s account anytime

Answer 25

false

Question 26

the amount of a check is written twice on each check

Answer 26

true

Question 27

a check that contains errors must be marked with the word VOID and another check must be written

Answer 27

true

Question 28

an important aspect of cash control is verifying that the information on a bank statement and a checkbook and a check are in agreement

Answer 28

true

Question 29

an outstanding check is one that has been issued but not yet reported on a bank by a statement and a checkbook are in agreement

Answer 29

true

Question 30

banks deduct service charges from customers’ checking accounts without requiring customers to write a check for the amount

Answer 30

true

Question 31

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

Answer 31

true

Question 32

the journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by check

Answer 32

false

Question 33

the source document for an electronic funds transfer is a memorandum

Answer 33

true

Question 34

the source document for a debit card purchase is a memorandum

Answer 34

true

Question 35

TechKnow Consulting maintains a petty cash fund for making large cash payments without writing checks

Answer 35

false

Question 36

businesses use petty cash when writing a check is not time or cost effective

Answer 36

true

Question 37

a memorandum is the source document for the entry to record establishing a petty cash fund

Answer 37

false

Question 38

anytime a payment is made from the petty cash fund, a petty cash slip is prepared showing proof of a petty cash payment

Answer 38

true

Question 39

when the petty cash fund is replenished, the balance of the petty cash account increases

Answer 39

false