Question :
Multiple Choice Questions
26.Which of the following statements not correct?
A. In accounting, : 1169432
Multiple Choice Questions
26.Which of the following statements is not correct?
A. In accounting, the term “cash” includes checks, money orders, and funds on deposit in a bank as well as currency and coins.
B. The cash register proof is used to enter the cash sales and sales tax in the cash receipts journal.
C. The entry to record the receipt of a promissory note to replace an open account is recorded in the cash receipts journal.
D. The cash receipts journal has separate columns for debits to Cash, credits to Accounts Receivable, and credits to Sales and Sales Tax Payable.
27.A cash sale of merchandise would be recorded in
A. the sales journal.
B. the general journal.
C. the cash receipts journal.
D. the cash payments journal.
28.Upon collection of the amount due on an interest-bearing promissory note from a customer, the accountant would debit Cash, credit Notes Receivable, and
A. debit Interest Expense.
B. credit Interest Income.
C. credit Interest Expense.
D. debit Interest Income.
29.The entry to record an additional cash investment by the owner is recorded in
A. the cash payments journal.
B. the cash receipts journal.
C. the general journal.
D. the purchases journal.
30.Which of the following statements is NOT correct regarding the cash receipts journal?
A. After posting a column total from the cash receipts journal to a general ledger account, a (√) is entered at the bottom of the journal column.
B. The amounts that appear in the Other Accounts Credit column are posted individually to the general ledger accounts during the month.
C. Before any posting to the general ledger takes place, the equality of the debits and credits recorded in the cash receipts journal are proved.
D. The amounts recorded in the Accounts Receivable Credit column are posted daily to individual accounts in the accounts receivable subsidiary ledger.
31.Which of the following statements is correct?
A. The entry to record the payment of an invoice within the cash discount period would include a debit to the Purchases Discounts account.
B. To record a cash purchase of merchandise, the accountant would debit Purchases and credit Cash.
C. A transaction that is properly recorded in the cash payments journal will always include the recording of an amount in the Cash Debit column.
D. Purchase discounts is a contra revenue account.
32.To record the payment of a purchase invoice when a cash discount is taken, the accountant would
A. debit Accounts Payable, credit Purchases Discounts, and credit Cash.
B. debit Accounts Payable, debit Purchases Discounts, and credit Cash.
C. debit Accounts Payable and credit Cash.
D. debit Purchases, credit Purchases Discounts, and credit Cash.
33.The entry to replenish a petty cash fund includes
A. a debit to Cash and a credit to Petty Cash.
B. a debit to Petty Cash Fund and a credit to Cash.
C. debits to various expense accounts and a credit to Petty Cash Fund.
D. debits to various expense accounts and a credit to Cash.
34.The entry to create a petty cash fund includes
A. a debit to Cash and a credit to Petty Cash Fund.
B. a debit to Petty Cash Fund and a credit to Cash.
C. a debit to Petty Cash Fund and a credit to Cash Over and Short.
D. a debit to Cash and a credit to Miscellaneous Expense.
35.Identify the procedure below that is NOT essential for proper control over cash receipts.
A. Hold all cash received during a month and make one bank deposit at the end of the month.
B. Keep cash receipts in a cash register or locked cash drawer or safe.
C. Have only designated employees receive and handle cash received by the business.
D. Enter cash receipts transactions in the accounting records promptly.
