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Question(s) / Instruction(s):

An employee authorized to sign checks should not record

a)            owner cash contributions.

b)            mail receipts.

c)            cash disbursement transactions.

d)            sales transactions.


22. In the purchases journal, debits are made in which columns?

a)            Accounts Payable, Merchandise Inventory, and Office Supplies.

b)            Merchandise Inventory, Office Supplies, and Store Supplies.

c)            Cash, Office Supplies, and Store Supplies.

d)            Accounts Payable, Cash, and Merchandise Inventory.


23. A subsidiary ledger is

a)            used in place of the general ledger if the general ledger is destroyed or stolen.

b)            a group of accounts used by branches and subsidiaries of a corporate business.

c)            a group of accounts with a common characteristic that provides detailed information about a control account in the general ledger.

d)            used to post excess transactions if a general ledger account becomes full during an accounting period.



24. If a company purchases merchandise for cash, the transaction should be recorded in the

a)            purchases journal.

b)            general journal.

c)            cash payments journal.

d)            sales journal.


25. If merchandise from a cash sale is returned by a customer for a refund, the sales return is recorded in the

a)            general journal.

b)            cash receipts journal.

c)            cash payments journal.

d)            sales journal.


26. Which of the following would not be an appropriate heading for a column in the cash receipts journal?

a)            Cash.

b)            Accounts Payable.

c)            Sales Discounts.

d)            Sales.


27. 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.


28. 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)            deduct $36 to the book's balance.

c)            deduct $36 from the bank's balance

d)            deduct $448 from the book's balance.

29. 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.

30. Checks received through the mail should

a)            immediately be endorsed "For Deposit Only."

b)            be sent to the accounts receivable subsidiary ledger clerk for immediate posting

to the customer's account.

c)            be cashed at the bank as soon as possible.

d)            be "rung up" on a cash register immediately.


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