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Accounting I - Chapter 5

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1.
1 point
The journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by check.
2.
1 point
The source document for an electronic funds transfer is a memorandum.
3.
1 point
An important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement.
4.
1 point
An outstanding check is one that has been issued by a depositor but not yet reported on a bank statement by the bank.
5.
1 point
TechKnow Consulting maintains a petty cash fund for making large cash payments without writing checks.
6.
1 point
When writing a check, the first step is to prepare the check stub.
7.
1 point
When the petty cash fund is replenished, the balance of the petty cash account increases.
8.
1 point
Most banks do not look at the date the check is written and will withdraw money from the depositor's account anytime.
9.
1 point
A check that contains errors must be marked with word VOID so that others will know that it is not to be used.
10.
1 point
There are four types of endorsements commonly used: blank, special, original, and restrictive.
11.
1 point
The amount of a check is written twice on each check.
12.
1 point
When a deposit is made in a bank account, the bank issues a receipt.
13.
1 point
Because cash transactions occur more frequently than other transactions, the chances for making recording errors affecting cash are less.
14.
1 point
Not only do banks charge a fee for handling a dishonored check, but they also deduct the amount of the check from the account as well.
15.
1 point
A memorandum is the source document for the entry to record establishing a petty cash fund.
16.
1 point
A check with a blank endorsement can be cashed by anyone who has possession of the check.
17.
1 point
The source document for a debit card purchase is a memorandum.
18.
1 point
Businesses use petty cash when writing a check is not time or cost effective.
19.
1 point
Anytime a payment is made from the petty cash fund, a petty cash slip is prepared showing proof of a petty cash payment.
20.
1 point
Banks deduct service charges from customers’ checking accounts without requiring customers to write a check for the amount.
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