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Establishing and replenishing a change fund. 1) A company would use a change fund if A)

 Establishing and replenishing a change fund.

1) A company would use a change fund if

A) there are cash transactions daily.

B) they want to pay the postage expense without writing a cheque.

C) the owner wants to make personal withdrawals easily.

D) None of these are correct.

2) The change fund is what type of account?

A) Expense

B) Revenue

C) Asset

D) Liability

3) When a company sets up a change fund account it would be considered a(n)

A) asset.

B) liability.

C) withdrawal.

D) expense.

7.5   Handling transactions involving cash short and over.

1) The entry to replenish a $200 petty cash fund, which has cash of $40 and valid receipts for $148, would include

A) a credit to Cash for $160.

B) a debit to Petty Cash for $160.

C) a credit to Cash for $148.

D) a credit to Petty Cash for $148.

2) Samantha's Tutoring Service's $100 petty cash fund has a shortage of $4. The facts are: $80 in valid receipts for expenses; $16 in coins and currency. The journal entry to replenish the petty cash fund would include a

A) credit to Cash for $80.

B) credit to Petty Cash for $84.

C) credit to Cash Short/Over for $4.

D) debit to Cash Short/Over for $4.

3) Vanessa's Gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $300; total coins and currency $304. The summary journal entry to record the day's transactions would include a

A) $300 debit to Cash; $4 debit to Cash Short/Over; and $304 credit to Sales.

B) $304 debit to Cash; $4 credit to Cash Short/Over; and $300 credit to Sales.

C) $304 debit to Cash and $304 credit to Sales.

D) $300 debit to Cash and $300 credit to Sales.

4) The petty cash overage was not recorded. This would cause

A) revenues to be overstated.

B) revenues to be understated.

C) expenses to be overstated.

D) expenses to be understated.

5) Cash Short and Over is

A) a Misc. Expense account.

B) a Misc. Revenue account.

C) a Misc. Expense or Misc. Revenue account depending on the balance in the account.

D) neither a Misc. Expense nor Misc. Revenue.

6) If the ending balance in the Cash Short/Over account is a credit, it indicates that cash shortages have exceeded cash overages for the period.

7) If the ending balance in the Cash Short/Over account is a debit, it indicates that cash shortages have exceeded cash overages for the period.

8) If there is an overage in the petty cash fund it would be considered other income.

9) Determine the cash short (-) or over (+) given the following:

The balance per the Petty Cash account $75.

The count of coin and currency amounts to $22.

There are receipts: for gas of $9, for office supplies of $18, for first aid supplies $14.

$________________

10) Determine the cash short (-) or over (+) given the following:

The balance per the petty cash account $100.

The count of coin and currency amounts to $23.

There are receipts: for telephone costs of $25, for supplies of $6, for transportation $6, for funeral flowers $38.

Dec 06 2019 View more View Less

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