Learning Materials
Features
Discover
Chapter 7: Q14PGA (page 411)
What are some common controls used with a bank account?
Some common controls are signature card, check, and deposit ticket.
Over 30 million students worldwide already upgrade their learning with 91影视!
All the tools & learning materials you need for study success - in one app.
Get started for free
Accounting for petty cash transactions
Suppose that on June 1, Rockin鈥� Gyrations, a disc jockey service, creates a petty cash
fund with an imprest balance of \(300. During June, Michael Martell, fund custodian,
signs the following petty cash tickets:
Petty Cash
Ticket Number Item Amount
1 Postage for package received \) 30
2 Office party 25
3 Two boxes of stationery 20
4 Printer cartridges 15
5 Business dinner 65
On June 30, prior to replenishment, the fund contains these tickets plus cash of \(140.
The accounts affected by petty cash payments are Office Supplies, Entertainment
Expense, and Postage Expense.
Requirements
1. On June 30, how much cash should this petty cash fund hold before it is replenished?
2. Journalize all required entries to (a) create the fund and (b) replenish it. Includeexplanations.
3. Make the entry on July 1 to increase the fund balance to \)325. Include an explanation
Phoenix Restaurants accepts credit and debit cards as forms of payment. Assume Phoenix had $12,000 of credit and debit card
sales on June 30, 2017.
9. Suppose Phoenix鈥檚 processor charges a 2% fee and deposits sales net of the fee. Journalize the sale transaction for the
restaurant.
10. Suppose Phoenix鈥檚 processor charges a 2% fee and deposits sales using the gross method. Journalize the sale transaction for
the restaurant.
Fill in the missing information.
a. The vendor ships the inventory and sends a(n) __________ back to the purchaser.
b. After approving all documents, the purchaser sends a(n) __________ to the vendor.
c. When ordering merchandise inventory, the purchaser sends a(n) __________ to the vendor.
d. The purchaser receives the inventory and prepares a(n) __________.
Match the accounting terminology to the definitions.
1. Sarbanes-Oxley Act
2. Internal control
3. Encryption
4. Separation of duties
5. Internal auditors
a. Organizational plan and all the related measures adopted by an entity to safeguard assets,
encourage employees to follow company policies, promote operational efficiency, and ensure
accurate and reliable accounting records.
b. Employees of the business who ensure that the company鈥檚 employees are following company
policies and meeting legal requirements and that operations are running efficiently.
c. Rearranging plain-text messages by a mathematical process鈥攖he primary method of
achieving security in e-commerce.
d. Requires companies to review internal control and take responsibility for the accuracy and
completeness of their financial reports.
e. Dividing responsibilities between two or more people.
: Identifying timing differences related to a bank reconciliation
For each timing difference listed, identify whether the difference would be reported on
the book side of the reconciliation or the bank side. In addition,
identify whether the difference would be an addition or subtraction.
a. Deposit in transit
b. Bank collection
c. Debit memorandum from bank
d. EFT cash receipt
e. Outstanding checks
f. \(1,000 deposit erroneously recorded
by the bank as \)100
g. Service charges
h. Interest revenue
i. \(2,500 cash payment for rent
expense erroneously recorded by
the business as \)250
j. Credit memorandum from bank
What do you think about this solution?
We value your feedback to improve our textbook solutions.
Explanations 
Textbooks 
Flashcards 
91影视 AI 
Notes 
Study Plans 
Study Sets 
Find a degree 
Magazine