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1. Because cash transactions occur more frequently than other transactions, there is more chance for making recording errors affecting cash. (p. 122)
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2. When a deposit is made in a bank account, the bank issues a check. (p. 123)
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3. There are three types of endorsements commonly used: blank, special, and restrictive. (p. 124)
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A check with a blank endorsement can be cashed by anyone who has possession of the check. (p. 124)
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5. When writing a check, the first step is to prepare the check. (p. 126)
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6. Most banks do not look at the date the check is written and will withdraw money from the depositor's account anytime. (p. 126)
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. The amount of a check is written twice on each check. (p. 126)
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8. A check that contains minor errors can be corrected neatly and initialed. (p. 127)
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9. An important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement. (p. 130)
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10. An outstanding check is one that has not yet been issued. (p. 130)
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11. Banks deduct service charges from customers' checking accounts without requiring customers to write a check for the amount. (p. 132)
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2. 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. (p. 135)
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. The journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by debit card. (p. 137)
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14. The source document for an electronic funds transfer is a check number. (p. 137)
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15. The source document for a debit card purchase is a memorandum. (p. 138)
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16. The purpose of a petty cash fund is to make small cash payments without writing checks. (p. 140)
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17. Businesses use petty cash when writing a check is not time or cost effective. (p. 140)
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18. A petty cash report is completed at the end of each business day. (p. 143)
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19. A memorandum is the source document for the entry to record replenishing the petty cash fund. (p. 144)
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20. When the petty cash fund is replenished, the balance of the petty cash account increases. (p. 145)
