1) Which of the following statements is not correct?

Multiple Choice: In accounting, the term "cash" includes checks, money orders, and funds on deposit in a bank as well as currency and coins; In a well managed business, most bills are paid by cash; The cash register proof is used to enter the cash sales and sales tax in the journal; The petty cash account balance is usually listed separately from the Cash account on the Balance Sheet.

2)Most businesses use the petty cash fund to pay for

Multiple Choice: internal expenses; accounts payable; small expenditures; merchandise purchases.

4)ABC Office Suppliers keeps a $200 change fund in its cash register. The cash sales per the cash register tape on May 30 were $700. The cash count was $908. Identify the correct journal entry below to record the sales and cash overage (or shortage) for May 30.

		DEBIT	CREDIT
(A)	Cash	700
	Cash Short or Over	8
	Sales		708
(B)	Cash	700
	Sales		700
(C)	Cash	708
	Cash Short or Over		8
	Sales		700
(D)	Cash	908
	Sales		900
	Cash Short or Over		8

Multiple Choice: Option A; Option B; Option C; Option D

5) A check issued for $890 to pay a vendor on account was recorded in the firm's records as $980; the canceled check was properly listed on the bank statement at $890. To arrive at an accurate balance on a bank reconciliation statement, the error should be

Multiple Choice: added to the bank statement balance; deducted from the bank statement balance; added to the book balance; deducted from the book balance.

6) A check issued for $1,980 to pay a vendor on account was recorded in the firm's records as $1,890; the canceled check was properly listed on the bank statement at $1,980. To arrive at an accurate balance on a bank reconciliation statement, the error should be

Multiple Choice: added to the bank statement balance; deducted from the book balance; deducted from the bank statement balance; added to the book balance.

7) The entry to replenish a petty cash fund typically includes

Multiple Choice: a debit to Cash and a credit to Petty Cash; debits to various asset and expense accounts and a credit to Cash;debits to various expense accounts and a credit to Petty Cash Fund; a debit to Petty Cash Fund and a credit to Cash.

8) Which of the following statements is correct?

Multiple Choice: An endorsement is a written authorization that transfers ownership of a check; If a check is negotiable, it means that ownership cannot be transferred; A check is a written order signed by an authorized person, the drawee; Most businesses make one monthly deposit of cash receipts in order to maintain better control over their cash.