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chapter 6
Cash and
Highly-Liquid Investments
goals discussion
goals
achievement
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in the blanks
multiple
choice
problems
check list and key terms
Select the appropriate response.
The items reported in the Cash account on the balance sheet must be acceptable to a bank for deposit and free from restrictions for use in satisfying current debts.
The Cash account is listed on the balance sheet in the current asset section, and all cash items are normally combined and reported as a single figure.
Companies may legally use the "float," even to the extent of writing checks when no money is in an account.
The accounting department should have exclusive control over the functions of cash collection, bank deposits, recording appropriate journal entries, and preparing the periodic bank reconciliation.
Which of the following items would be subtracted from the balance per bank statement in adjusting to the correct adjusted cash balance?
outstanding checks or NSF checks
The reconciliation of the cash balance per company records to the correct adjusted cash balance would indicate the need for journal entries.
Monthly bank service charges are subtracted in the reconciliation of a certain "amount" to the correct adjusted cash balance. What is the "amount" in question?
ending balance per bank statement or ending balance per company records
The original amount of a petty cash fund should be equal to cash remaining in the fund plus:
cash short and over or petty cash receipts
The replenishment of a petty cash fund involves a credit to which of the following accounts?
Cash or Petty Cash
The initial recording of trading securities is at cost, including brokerage fees.
Only decreases in value are recognized for trading securities.