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83. A petty cash fund is generally established in order to a. pay for all merchandise purchased on account. b. pay employees’ wages. c. make loans internally to employees. d. pay relatively small expenditures.

84. A petty cash fund should be replenished a. every day. b. at the end of every accounting period. c. once a year. d. as soon as an expense is paid from the fund.

85. A petty cash fund should not be used for a. postage due. b. loans to the petty cash custodian. c. taxi fares. d. customer lunches.

86. The size of the petty cash fund is dependent on a. the wishes of the custodian of the fund. b. anticipated disbursements for the year. c. anticipated disbursements for a three- to four-week period. d. the size of the regular cash account.

87. Entries are made to the Petty Cash account when a. establishing the fund. b. making payments out of the fund. c. recording shortages in the fund. d. replenishing the fund.

88. When opening a bank checking account, a signature card a. indicates to whom money is to be paid. b. indicates each person authorized to sign checks on the account. c. is attached to all pre-printed checks. d. is required only when dealing with an out-of-state bank.

89. Which one of the following is not necessarily a party to a check? a. Maker b. Buyer c. Payee d. Payer

90. A bank statement a. lets a depositor know the financial position of the bank as of a certain date. b. is a credit reference letter written by the depositor's bank. c. is a bill from the bank for services rendered. d. shows the activity which increased or decreased the depositor's account balance.

91. Which one of the following would not cause a bank to debit a depositor's account? a. Bank service charge b. Collection of a note receivable c. Wiring of funds to other locations d. Checks marked NSF 92. A company maintains the asset account, Cash in Bank, on its books, while the bank maintains a reciprocal account which is a. a contra-asset account. b. a liability account. c. also an asset account. d. an owner's equity account.

93. A remittance advice attached to a company check provides a. details about the running cash balance in the checking account. b. the magnetic bank routing numbers. c. the explanation of the purpose of the check. d. the signature space for the maker.

94. A deposit made by a company will appear on the bank statement as a a. debit. b. credit. c. debit memorandum. d. credit memorandum.

95. A check returned by the bank marked "NSF" means a. no service fee. b. no signature found. c. not satisfactorily filled-out. d. not sufficient funds.

96. A debit memorandum would not be issued by the bank for a. a bank service charge. b. the issuance of traveler's checks. c. the wiring of funds. d. the collection of a notes receivable.

97. A bank reconciliation should be prepared a. whenever the bank refuses to lend the company money. b. when an employee is suspected of fraud. c. to explain any difference between the depositor's balance per books with the balance per bank. d. by the person who is authorized to sign checks.

98. Deposits in transit a. have been recorded on the company's books but not yet by the bank. b. have been recorded by the bank but not yet by the company. c. have not been recorded by the bank or the company. d. are checks from customers which have not yet been received by the company.

99. In preparing a bank reconciliation, outstanding checks are a. added to the balance per bank. b. deducted from the balance per books. c. added to the balance per books. d. deducted from the balance per bank.

100. If a check correctly written and paid by the bank for $448 is incorrectly recorded on the company's books for $484, the appropriate treatment on the bank reconciliation would be to a. add $36 to the bank's balance. b. add $36 to the book's balance. c. deduct $36 from the bank's balance. d. deduct $448 from the book's balance.

101. Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry: a. Accounts Receivable Cash b. Cash Accounts Receivable c. Miscellaneous Expense Accounts Receivable d. No adjusting entry is necessary.

102. Elkins Company had checks outstanding totaling $5,400 on its June bank reconciliation. In July, Elkins Company issued checks totaling $38,900. The July bank statement shows that $26,300 in checks cleared the bank in July. A check from one of Elkins Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Elkins Company's July bank reconciliation should be a. $12,600. b. $18,000. c. $17,700. d. $7,200.

103. Grant Company gathered the following reconciling information in preparing its July bank reconciliation: Cash balance per books, 7/31 $4,500 Deposits-in-transit 150 Notes receivable and interest collected by bank 850 Bank charge for check printing 20 Outstanding checks 2,000 NSF check 170 The adjusted cash balance per books on July 31 is a. $5,160. b. $5,010. c. $3,310. d. $3,460.

104. Yenn Company developed the following reconciling information in preparing its September bank reconciliation: Cash balance per bank, 9/30 $11,000 Note receivable collected by bank 4,000 Outstanding checks 6,000 Deposits-in-transit 3,000 Bank service charge 50 NSF check 800 104. (cont.) Determine the cash balance per books (before adjustments) for Yenn Company. a. $8,850. b. $14,000. c. $4,850. d. $11,000.

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