Which of the following statements is correcT? Multple Cholce An endorsement is a written authortzation that transfers ownership ofa check. If a check is negotiable, It means that ownership cannot be transferred. A check is a written order signed by an authortzed person, the drawee. Most businesses make one monthly deposit of cash recelpts In order to maintain better control over their cash.
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- Match the following words with their definitions by entering the correct number in the spaces below. 1.deposit ticket 2.ATM 3.check 4.bank statement 5.blank endorsement _____ a.A document ordering a bank to pay cash from a depositors account. _____ b.An endorsement where the payee simply signs the back of the check, making the check payable to any bearer. _____ c.Automated teller machinea machine used by depositors to make withdrawals or deposits at any time. _____ d.A statement of account issued by a bank to each depositor once a month. _____ e.A form showing a detailed listing of items being deposited.Read the following statements about internal controls. Write down the number of each statement and whether the statement is true or false. If a statement is false, explain why. the hysical stockta 1. Internal controls are not required when payments are made by cheque. 2. All payments should be made by cheque, except for petty cash payments. A good internal control procedure is where the same person is responsible ed with the e reported for paying all accounts, writing all cheques and signing all cheques. 4. In order to be efficient, all employees should have direct access to 3. and loss. petty cash. Bank reconciliation statements need only be drawn up every six months. 1) diately. 7. A blank cheque can be signed to replenish the petty cash fund if it is handed to the custodian. 5. 6. Cheque books should be kept in a locked safe as a preventive control. 9. Separation of duties is a vital part of internal control procedures. 10. Any employee of a business should be able to buy assets for…2.In payment for a shipment of fittings, Retool LLC offers Supply Company a cashier’s check. A cashier’s check functions the same as cash because a. the bank on which the check is drawn is not the drawer. b. the party to whom the check is payable is the bank. c. the bank has committed itself to paying the stated amount on demand. d. a check is not a debt—it is only the evidence of a debt On behalf of Bubble Tea Company, Corey signs an instrument in which she promises to deliver 100 cases of tea as payment to Deli Inc. on April 1. This instrument is a. negotiable. b. nonnegotiable, because it does not indicate a specific brand of tea. c. nonnegotiable, because tea is not a medium of exchange authorized or adopted by a government as currency. d. nonnegotiable, because it does not recite any consideration. 5. Wen writes an instrument that states it is…
- The following items may appear on a bank statement: 1. Bank correction of an error from posting another customer's check (disbursement) to the company's account 2. EFT deposit 3. Loan proceeds 4. NSF check Using the following format, indicate whether each item would appear as a debit or credit memo on the bank statement and whether the item would increase or decrease the bal- ance of the company's account: Appears on the Bank Statement as a Debit or Credit Increases or Decreases the Balance of the Company's Bank Account Item No. MemoXYZ LLC dealing all its transactions through its bank to avoid employee fraud and theft. For offering daily services,the bank debited OMR 20 to the bank account and the company unaware it.How will you adjust the above reconciliation item in bank reconciliation statement? a. Add OMR 20 to the company's bank statement balance b. Add OMR 20 to the company's cash book balance c. Deduct OMR 20 from company's cash book balance d. Deduct OMR 20 from the company's cash book balanceItems on company’s bank statement a) Bank Correction of an error from posting another customer’s check (disbursement) to thecompany’s account.b) EFT depositc) Loan proceedsd) NSF checkUsing the format shown below, indicate whether each item would appear as a debit or credit memoon the bank statement and whether the item would increase or decrease the balance of thecompany’s account. Increases or Decreases theAppears on the Bank Statement Balance of the company’sItem No. as a Debit or Credit Memo Bank Account
- a) Bank Correction of an error from posting another customer’s check (disbursement) to thecompany’s account.b) EFT depositc) Loan proceedsd) NSF checkUsing the format shown below, indicate whether each item would appear as a debit or credit memoon the bank statement and whether the item would increase or decrease the balance of thecompany’s account. Increases or Decreases theAppears on the Bank Statement Balance of the company’sItem No. as a Debit or Credit Memo Bank Account______________________________________________________________________________The following questions related to cash disbursements are included in the internalcontrol questionnaire for LUNA Company:1. Are all supporting documents effectively cancelled when checks are signed?2. Are cash discounts to which the entity is entitled taken?3. Does someone independent of accounts payable reconcile monthly vendor’sstatements to vouchers included as liabilities at the end of the period? Required: For each of the above itemsa. Identify the financial statement assertion to which the control relates. b. Identify a potential misstatement that could arise from the absence of thecontrol. c. Indicate an audit procedure the auditor might perform to test the conDetermine if the statement is true or false. 1. Monthly bank reconciliation is one of the internal control features in every company, which is created to show that there is no discrepancy between the cash balance per book records and the cash balance per bank records. 2. Reciprocal accounts should have the same balance after all adjustments have been made. 3. Checks paid to the suppliers but not yet presented to the bank is one of the reasons why differences arise on reciprocal accounts. 4. Checks paid to the suppliers but not yet presented to the bank is one of the reasons why differences arise on reciprocal accounts. 5. Bills that are collected by the bank on behalf of the customer is one of the reasons why differences arise between reciprocal accounts.Bank reconciliation statement is prepared by the account holder. 6. Bank reconciliation statement is prepared by the account holder. 7. Bank reconciliation statement is prepared by the account holder. 8. A business receives a bank…
- 3. A good internal control procedure is where the same person is responsible Read the following statements about internal controls. Write down the number 2. All payments should be made by cheque, except for petty cash payments. 1. Internal controls are not required when payments are made by cheque. of each statement and whether the statement is true or false. If a statement is for paying all accounts, writing all cheques and signing all cheques. » Activity 4.1 false, explain why. 4 ln order to be efficient, all employees should have direct access to petty cash. - Pank reconciliation statements need only be drawn up every six months. 6. Cheque books should be kept in a locked safe as a preventive control. 7. A blank cheque can be signed to replenish the petty cash fund if it is handed to the custodian. 8. All cash receipts should be stored in the cash register and deposited at the end of the week, in order to make fewer trips to the bank. 9. Separation of duties is a vital part of…10. In Exhibit 3.6, you see a credit sale to G. H. Allen that is recorded in a paper-based accounting system. On July 28, 2021, Aca Pool Co. received check number 6311 from G. H. Allen in payment of his outstanding invoice. Required: a. Record the receipt of Allen's check on the cash receipts prelist, document number CR645. Your instructor will provide you a blank form. b. Use the prelist as your source document to record this cash receipts transaction in the appropriate 14A payment system that uses computerized electronic impulses to affect a cash transaction is called electronic funds transfer (EFT). True False A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid. True False The party signing a check is called the drawee. True False the bank often informs the depositor f bank service charges by including a credit memorandum with the monthly bank statement. True False A signature card shows the signature of only the person who authorizes others in the company to sign checks. True False The payor is the party to whom payment us made. True False Bank customers are considered creditors of the bank, so the bank shows their accounts with credit balances on the bank’s records. True False Depositing all cash, checks, etc, in a bank and paying with checks is an internal control procedure over cash True False