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Questions and Answers
What is a statement that guides the ethical behavior of a company and its employees?
What is a statement that guides the ethical behavior of a company and its employees?
code of conduct
What is a bank account from which payments can be ordered by a depositor?
What is a bank account from which payments can be ordered by a depositor?
checking account
What is a signature or stamp on the back of a check that transfers ownership?
What is a signature or stamp on the back of a check that transfers ownership?
endorsement
What type of endorsement consists only of the endorser's signature?
What type of endorsement consists only of the endorser's signature?
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What type of endorsement indicates a new owner of a check?
What type of endorsement indicates a new owner of a check?
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What type of endorsement restricts further transfer of a check's ownership?
What type of endorsement restricts further transfer of a check's ownership?
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What is a check with a future date on it called?
What is a check with a future date on it called?
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What is a computerized cash payments system that transfers funds without the use of checks or currency?
What is a computerized cash payments system that transfers funds without the use of checks or currency?
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What is a check that a bank refuses to pay called?
What is a check that a bank refuses to pay called?
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What is a bank card that automatically deducts the amount of a purchase from the checking account of the cardholder?
What is a bank card that automatically deducts the amount of a purchase from the checking account of the cardholder?
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What is an amount of cash kept on hand and used for making small payments?
What is an amount of cash kept on hand and used for making small payments?
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What is a form showing proof of a petty cash payment?
What is a form showing proof of a petty cash payment?
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Because cash transactions occur more frequently than other transactions, the chances for making recording errors affecting cash are less.
Because cash transactions occur more frequently than other transactions, the chances for making recording errors affecting cash are less.
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When a deposit is made in a bank account, the bank issues a receipt.
When a deposit is made in a bank account, the bank issues a receipt.
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There are four types of endorsements commonly used: blank, special, original, and restrictive.
There are four types of endorsements commonly used: blank, special, original, and restrictive.
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A check with a blank endorsement can be cashed by anyone who has possession of the check.
A check with a blank endorsement can be cashed by anyone who has possession of the check.
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When writing a check, the first step is to prepare the check stub.
When writing a check, the first step is to prepare the check stub.
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Most banks do not look at the date the check is written and will withdraw money from the depositor's account anytime.
Most banks do not look at the date the check is written and will withdraw money from the depositor's account anytime.
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The amount of a check is written twice on each check.
The amount of a check is written twice on each check.
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A check that contains errors must be marked with the word VOID and another check must be written.
A check that contains errors must be marked with the word VOID and another check must be written.
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An important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement.
An important aspect of cash control is verifying that the information on a bank statement and a checkbook are in agreement.
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An outstanding check is one that has been issued but not yet reported on a bank statement by the bank.
An outstanding check is one that has been issued but not yet reported on a bank statement by the bank.
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Banks deduct service charges from customers' checking accounts without requiring customers to write a check for the amount.
Banks deduct service charges from customers' checking accounts without requiring customers to write a check for the amount.
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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.
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.
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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 check.
The journal entry for a payment on account using electronic funds transfer is exactly the same as when the payment is made by check.
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The source document for an electronic funds transfer is a memorandum.
The source document for an electronic funds transfer is a memorandum.
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Study Notes
Ethical Guidelines
- Code of Conduct: A statement guiding ethical behavior within a company and its employees.
Banking Basics
- Checking Account: A bank account allowing deposits and withdrawals, from which payments can be ordered.
- Endorsement: A signature or stamp on the back of a check that signifies ownership transfer.
Types of Endorsements
- Blank Endorsement: An endorsement that contains only the endorser's signature.
- Special Endorsement: Designates a new owner of a check.
- Restrictive Endorsement: Limits further transfer of ownership of a check.
Check Characteristics
- Postdated Check: A check issued with a future date.
- Dishonored Check: A check that a bank refuses to pay.
Payment Systems
- Electronic Funds Transfer (EFT): A computerized system for transferring funds without checks or currency.
- Debit Card: A bank card that deducts purchase amounts directly from the cardholder's checking account.
Cash Management
- Petty Cash: Cash kept on hand for small expenses.
- Petty Cash Slip: A document proving a petty cash payment.
True or False Concepts
- Recording errors for cash transactions are more likely due to their frequency (False).
- A receipt is issued by a bank for deposited funds (True).
- Common endorsement types include blank, special, and restrictive only; original is not a standard type (False).
- A blank endorsed check can be cashed by anyone possessing it (True).
- The initial step in writing a check is preparing the check stub (True).
- Banks can withdraw money from accounts without regard to the check's written date (False).
- The amount on a check is typically written twice (True).
- Checks with errors must be marked as VOID and replaced (True).
- Important cash control requires agreement between bank statement information and checkbook records (True).
- Outstanding checks are issued but not yet appeared on the bank statement (True).
- Banks deduct service charges without a check being written by customers (True).
- Fees apply for dishonored checks, and banks deduct the amount from accounts (True).
- Journal entries for EFT payments differ from those made by check (False).
- The source document for an EFT is a memorandum (True).
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of key terms from Accounting Chapter 5 with these flashcards. Each card features a word and its definition to help reinforce your understanding of essential accounting concepts. Perfect for students looking to review before exams.
