ACC 406 Lecture Notes - Lecture 6: Petty Cash, Accounts Payable
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On June 1, Salad Dressings creates a petty cash fund with animprest balance of $500. During June, Demers, the funmd custodian,signs the following:
Petty Cash Ticket Number | Item | Amount |
101 | Office Supplies | $ 55 |
102 | Cab fare for executive | 40 |
103 | Delivery of package across town | 5 |
104 | Business Dinner | 95 |
105 | Merchandise Inventory | 140 |
On June 30, prior to? replenishment, the fund contains thesetickets plus cash of $190. The accounts affected by petty cashpayments are Office? Supplies, Travel? Expense, Delivery? Expense,Entertainment? Expense, and Merchandise Inventory.
A) Explain the Charachteristics and the internal controlfeatures of an imprest fund.
An imprest fund has _____1___ ( A Credit, Difference, orthe Same ) balance at all times, which eaquals the sumof_____2__ ( Accounts recievable, Cash in the bank, Cash inthe fund, Deposites in transit
) plus the ___3____ ( Check Stubs, Credit Memos, Total ofthe tickets) that support payments from the fund. Theinternal control feature of an imprest fund is that it ____4___(Clearly Debits, Clearly Identifies, increases,decreases) the amount of money for which the fundcustodian is responsible.
B) On june 30, how much cash should the pettycash fund hold before it is? replenishe
Before it is replenished, the petty cash fund shouldhold cash of $________ C) Begin by journalizing thecreation of the fund. Journalize the replenishment of the fund D) Make the July 1 entry toincrease the fund balance to $700. E) The custodian____1___ (Cashes, Void, Writes) the check and places$_____ of currency and coin______ ( In hispocket, bank, fund, mondy market account) |
Exercise #2
Kathleen Company uses an imprest petty cash system. The fund wasestablished on March 1 with a balance of $100. During March, thefollowing petty cash receipts were found in the petty cash box.
The fund was replenished on March 15 when the fund contained $4in cash. On March 20, the amount in the fund was increased to$150. Instructions Journalize the entries in March that pertain to the operation ofthe petty cash fund. |
1- Hill Company established a petty cash fund of? $500. Thefirst transaction was the purchase of stamps for? $46. Which of thefollowing statements is? CORRECT?
A.
The amount of cash on hand and the cash voucher should bemaintained in a cash box or other secure device.
B.
The amount of cash on hand should equal? $454.
C.
The petty cash custodian prepares a petty cash voucher to listthe item purchased.
D.
All of the statements are correct.
2-In a bank? reconciliation, a NSF check? is:
A.
added to the bank balance.
B.
added to the book balance.
C.
subtracted from the book balance.
D.
subtracted from the bank balance.
3-The following accounts and balances are taken from Moore?Company's adjusted trial? balance:
Accounts Payable | ?$12,000 |
Accounts Receivable | 2900 |
Accumulated Depreciation | 1500 |
Depreciation Expense | 1100 |
Dividends | 2400 |
Insurance Expense | 2600 |
Interest Revenue | 1140 |
Prepaid Insurance | 2020 |
Retained Earnings | ?10,600 |
Salary Expense | ?22,100 |
Service Revenue | ?37,800 |
What is the ending balance in Retained Earnings after theclosing entries are? completed?
A.
?$10,740
B.
?$21,340
C.
?$38,940
D.
?$13,140