Week 6

GOALS ACHIEVEMENT
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.
true  
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.
correct  
Companies may legally use the "float," even to the extent of writing checks when no money is in an account.
false
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.
false
Which of the following items would be subtracted from the balance per bank statement in adjusting to the correct adjusted cash balance?
outstanding checks
The reconciliation of the cash balance per company records to the correct adjusted cash balance would indicate the need for journal entries.
true  
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 company records
The original amount of a petty cash fund should be equal to cash remaining in the fund plus:
petty cash receipts
The replenishment of a petty cash fund involves a credit to which of the following accounts?
Cash  
The initial recording of trading securities is at cost, including brokerage fees.
correct  
Only decreases in value are recognized for trading securities.
false… 9/11…
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FILL IN THE BLANKS
1. Cash includes coins, currency, and money orders, but not checks that become payable on a future date (known as postdated checks).
2. The cash budget is a major component of a cash planning system, and represents the overall plan of activity that depicts cash inflows and outflows for a stated period of time.
3. Cash receipts should be deposited at the bank on a daily basis.
4. Deposit in transit arise when receipts have been entered on the company records but not as yet posted by the bank.
5. The bank reconciliation is based on the Cash account and a document called a bank statement.
6. The receipts accumulated in a petty cash box are frequently called petty cash vouchers.
7. An investment in trading securities should be classified in current asset section of the balance sheet.
8. Trading securities should be measured and reported at market value.
9. Unrealized gains and losses on trading securities impact income.

2/9

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