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61 suppose that company noted a discrepancy whereby the amount of cash deposited in 4299849

 

 

61. Suppose that company noted a discrepancy whereby the amount of cash deposited in the bank account exceeded the amount included as cash sales on the cash register tapes. This overage should be recorded as a(n): 
A. debit to Cash Over and Short.
B. credit to Cash Over and Short.
C. increase in Petty Cash.
D. increase in Accounts Receivable.

 

62. A petty cash custodian should always: 
A. maintain supporting documentation for any payment made from the petty cash fund.
B. record petty cash expenditures in the company's accounting records.
C. prepare the bank reconciliation for the petty cash account.
D. sign the checks for items paid from the petty cash fund.

 

63. Donnay Corporation established a petty cash fund in the amount of $300. Which of the following is the correct entry for Donnay to record this event? 
A. Cash                                        300
     Petty Cash Fund                                  300
B. Petty Cash Fund                      300
     Cash                                                    300
C. Miscellaneous Expense           300
     Petty Cash Fund                                  300
D. None of these, as no entry is necessary to record an exchange of cash.

 

64. Jillian Corporation has a $375 petty cash fund. At the end of each month, Jillian's petty cash custodian presents the records of the petty cash transactions. On August 31, there was $33 cash remaining in the fund and the documents supporting the following transactions were presented for reimbursement.
 

August 4

U.S. post office (postage)

$ 72

August 14

Callabaugh supply (office supplies)

219

August 15

Speedy delivery (package delivery)

51

 

 

 

Which of the following entries is necessary for recording the replenishment of the fund on August 31? 
A. Cash                                                 342
     Petty Cash Fund                                           342
B. Postage Expense                                72
Office Supplies Expense                 219
Delivery Expense                              51
     Cash                                                             342
C. Miscellaneous Expenses                  342
     Petty Cash Fund                                           342
D. Postage Expense                               72
Office Supplies Expense                 219
Delivery Expense                              51
Cash Over and Short                         33
     Petty Cash Fund                                            375

 

65. Which of the following is not included in cash and cash equivalents on a company's balance sheet? 
A. A savings account at the bank
B. A checking account at the bank
C. A bank certificate of deposit for one year
D. Petty cash

 

66. Which of the following is not considered to be a cash equivalent? 
A. Corporate commercial paper due in 60 days after purchase
B. U.S. Treasury bills with an original maturity of six months
C. A money market account with a stock brokerage firm
D. A certificate of deposit with a term of 75 days when acquired

 

67. How are cash equivalents reported or disclosed in the financial statements? 
A. They are included with cash as a current asset on the balance sheet.
B. They are only reported on the statement of cash flows.
C. They are only disclosed in the notes to the financial statements.
D. They are included with short-term investments as a current asset on the balance sheet.

 

68. Which one of the following would never be considered a cash equivalent? 
A. U.S. Treasury bills
B. Corporate commercial paper
C. Money market funds
D. Common stock issued by a corporation

 

69. Each of the following items is considered a cash equivalent except: 
A. a 30-day certificate of deposit.
B. a 60-day corporate commercial paper.
C. a 75-day U.S. Treasury bill.
D. a 180-day note issued by a local government.

 

70. Cash equivalents include: 
A. treasury bills.
B. equity investments.
C. money market accounts and commercial paper.
D. certificates of deposit.

 

 

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