Question : 106. After preparing a bank reconciliation, a check outstanding for : 1255861

 

 

106. After preparing a bank reconciliation, a check outstanding for the payment of advertising would be recorded with a:

a. Debit to Advertising Expense.

b. Debit to Cash.

c. Credit to Advertising Expense.

d. No entry is needed.

 

 

107. The following data were obtained from the bank statement and from the process of reconciling it:

Bank service charges = $ 20

Deposit outstanding = $150

Interest earned on the bank account = $10

Checks outstanding = $400

Which items should be deducted from and added to the bank balance in completing the reconciliation?

a. Deduct checks outstanding; add service charges and deposit outstanding.

b. Deduct interest earned; add deposit outstanding.

c. Deduct checks outstanding; add deposit outstanding.

d. Deduct deposit outstanding; add checks outstanding.

 

 

108. The balance in the Colt Company’s Cash account on August 31 was $19,700, before the bank reconciliation was prepared. After examining the August bank statement and items included with it, the company’s accountant found:

 

Checks outstanding$4,300

NSF check     140

Note collected by bank for the Colt Company  1,200

Deposits outstanding  1,800

Bank service fees       60

What is the amount of cash that should be reported in the balance sheet as of August 31?

a. $20,700.

b. $17,200.

c. $18,700.

d. $22,200.

 

 

 

109. The balance shown in the August bank statement of Colt Company was $23,200. After examining the August bank statement and items included with it, the company’s accountant found:

 

Checks outstanding$4,300

NSF check     140

Note collected by bank for the Colt Company  1,200

Deposits outstanding  1,800

Bank service fees       60

What is the amount of cash that should be reported in the balance sheet as of August 31?

a. $20,700.

b. $17,200.

c. $18,700.

d. $22,200.

 

 

110. A minor amount of cash kept on hand to pay for small purchases is referred to as a:

a. Petty cash fund.

b. Cash receipts fund.

c. Cash payments fund.

d. Cookie jar fund.

 

 

111. Which of the following is NOT involved in the replenishment of the petty cash fund?

a. Transactions related to vouchers will be recorded.

b. Management will verify that the total of all vouchers equals the amount of cash missing from the petty cash fund.

c. Weekly payroll checks will be recorded.

d. Management will withdraw cash from the bank and place it in the petty cash fund.

 

 

112. At the time a $400 petty cash fund is being replenished, the company’s accountant finds vouchers totaling $350 and petty cash of $50. The vouchers include: postage, $100; business lunches, $150; delivery fees, $75; and office supplies, $25. Which of the following is not recorded when recognizing expenditures from the petty cash fund?

a. Debit Postage Expense, $100.

b. Debit Supplies, $25.

c. Credit Petty Cash, $350.

d. Debit Petty Cash, $350.

 

 

113. Which of the following is correct regarding a petty cash fund?

a. Petty cash fund represents cash on hand at the business for quick access.

b. Petty cash fund is used for minor purposes.

c. When cash from this fund is taken out, it should be replaced with a voucher.

d. All of the above are correct.

 

 

114. Consider the following cash flow items:

Pay amount owed to bank for previous borrowing.

Pay utility costs.

Purchase equipment to be used in operations.

Purchase office supplies.

Pay one year of rent in advance.

Pay workers’ salaries.

Pay for research and development costs.

Pay taxes to the IRS.

Sell common stock to investors.

How many of these cash flow items involve investing activities?

a. Zero.

b. One.

c. Two.

d. Three.

 

 

115. Consider the following cash flow items:

Pay amount owed to bank for previous borrowing.

Pay utility costs.

Purchase equipment to be used in operations.

Purchase office supplies.

Purchase one year of rent in advance.

Pay workers’ salaries.

Pay for research and development costs.

Pay taxes to the IRS.

Sell common stock to investors.

How many of these cash flow items involve financing activities?

a. Zero.

b. One.

c. Two.

d. Three.