Part One-Iilentifying Accounting Terms

NomePart Three-lilentifuing Accounting Concepts and PracticesDirections: Place a T for True or an F for False in the Answers column to showwhether €ach of the following statements is true or false.1, Because cash transactions occut more frequently than other transactions, the chances formaking recording errors affecting cash are less. (p. 118)2. When a deposit is made in a bank account, the bank issues a receipt. (p. 120)Answers-t-2.There are four t)?es of endorsements commonly used: blank, special, original, andrestdctive. (p. 121)A check with a blank endorsement can be cashed by anyone who has the check. (p. 121)3.4.5.When writing a check, the first step is to prepare the check stub. (p. 122)5.7.Most bank do not look at the date the check is written and will withdraw money ftom thedepositor's account anytime. (p. 122)The amount of a check is written twice on each check. (p- 122)7.8.A check ihat contains errors must be marked with the wod VOID and another check mustbe written. (p. 123)9.10.11.12.13.An outstanding check is one that has been issued but not yet reported on a bank statementby the bank. (p. 125)An important aspe€t of cash control is verifying that the information on a bank statementand a checkbook are in agreement. (p. 126)Banks deduct service charges from customers' checking ac€ounts without requiringcustomers to write a check for the amount. (p. 127)Not only do banks charge a fee for handling a dishonored check, but they also deduct theamount of the check from the account as well. (p. 130)The joumal entry for a payment on account using electronic funds transfer is exactly thecdme r< s hen the pavment i, made by (hect. rp. ll2)9.10.11.12,13.a4.The source documeni for an electronic funds ttansfer is a memorandum. (p. 132)14.15.The source doclrment for a debit card pu(hase is a memorandum. (p. 133)15.16.17.18.Encore Music maintains a petty cash fund fol making large cash payments wiihout writingchecks. (p. 135)Usin8 a petty cash fund usually decreases the number of checks that have to be wdtten.(p. 13s)A memorandum is the source document for the entry to record establishing a petty cashft1nd. (p. 135)19. Anytime a payment is made from the petty cash fund, a petry cash slip is preparedshowing proof of a petty cash payment. (p. 136)16,17.18.19.20. When the petty cash fund is reptenished, the balance of the petty cash account increases.(p. 137)CopyRtGHr (O SoUTH,WESTERN EDUcaIoNAL pususHtNc20.chopier 6 . 23