Chapter 5 Test

An outstanding check is one that has been issued but not yet reported on a bank statement.

• True
• False

When petty cash is replenished, Petty Cash is debited and Cash is credited.

• True
• False

Voided checks should be recorded in the journal.

• True
• False

The source document for an electronic funds transfer and debit card purchase is a memorandum.

• True
• False

The petty cash fund is a liability with a normal debit balance.

• True
• False

If any kind of error is made in preparing a check,

• a new check should be prepared
• VOID should be written on the check
• VOID should be written on the check stub
• all of the above

Each time cash or checks are placed in a bank account, the customer prepares a

• deposit slip
• none of these
• signature card
• check

The entry to establish a $200.00 petty cash fund is

• debit Miscellaneous Expense, $200.00; credit Cash, $200.00
• debit Cash, $200.00; credit Petty Cash, $200.00
• debit Petty Cash, $200.00; credit Miscellaneous Expense, $200.00
• debit Petty Cash, $200.00; credit Cash, $200.00

A lost check with a blank endorsement on it can be cashed by

• only the person whose name follows the words “Pay to the order of.”
• no one.
• anyone who has the check.
• only the person who endorsed the check

A petty cash fund is always replenished

• daily
• weekly
• at the end of the month
• none of these