Endorsements and Cash Management Quiz

Questions and Answers

An endorsement on the back of a check indicating that the check is to be accepted for deposit only is a?

Deposit endorsement

Special endorsement

Restrictive endorsement (correct)

Blank endorsement

The entry to establish a $200.00 petty cash fund is?

Debit Petty Cash, $200.00; credit Miscellaneous Expense, $200.00

Debit Miscellaneous Expense, $200.00; credit Cash, $200.00

Debit Cash, $200.00; credit Petty Cash, $200.00

Debit Petty Cash, $200.00; credit Cash, $200.00 (correct)

An endorsement on the back of a check consisting of the words 'Pay to the order of' and a new check owner's name is a?

Deposit endorsement

Special endorsement (correct)

Restrictive endorsement

Blank endorsement

Each time cash or checks are placed in a bank account, the customer prepares a?

Deposit slip Signup and view all the answers

A petty cash fund is always replenished?

None of these Signup and view all the answers

A lost check with a blank endorsement on it can be cashed by?

Anyone who has the check Signup and view all the answers

Cash Short and Over is classified as a(n)?

Expense Signup and view all the answers

When cash is short, the entry to replenish petty cash includes a?

Debit to Cash Short and Over Signup and view all the answers

If any kind of error is made in preparing a check,?

All of the above Signup and view all the answers

Study Notes

Endorsements

A restrictive endorsement on a check allows it to be accepted for deposit only.
A special endorsement includes the phrase "Pay to the order of" followed by a new owner's name.

Petty Cash Fund

Establishing a $200 petty cash fund requires a debit to Petty Cash and a credit to Cash of the same amount.
Petty cash funds are replenished when cash is short, involving a debit to Cash Short and Over for replenishments due to shortages.

Cash and Checks

Customers prepare a deposit slip for every cash or check placed into a bank account.
Cash Short and Over is classified as an expense account, indicating discrepancies between cash receipts and amounts expected.

Lost Checks

A lost check with a blank endorsement can be cashed by anyone possessing it, highlighting risks associated with such endorsements.

Error Handling

If an error occurs while preparing a check, it is advisable to mark the check as VOID and also note it on the check stub, ensuring clarity and accuracy in accounting records.

Description

Test your knowledge on various types of endorsements, petty cash funds, and cash management practices. This quiz covers essential concepts you need to understand for effective financial transactions and error handling in accounting. Perfect for accounting students or professionals looking to refresh their skills!