Vocab. City
A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder.
Debit card
What is the purpose of petty cash in a business?
To have cash on hand for small, unexpected cash expenses.
1. When the petty cash account is replenished, cash is credited.
2. A blank endorsement can be used to transfer ownership of the check.
3. Bank fees are typically recorded as miscellaneous expenses.
2. A blank endorsement can be used to transfer ownership of the check.
An endorsement consisting only of the endorser’s signature.
Blank endorsement
An amount of cash kept on hand and used for making small payments.
Petty cash
Petty cash is debit, cash is credited
1. Petty cash is considered a liability.
2. EFT transactions are treated like cash in the general journal.
3. Debit card transactions are treated like cash in the general journal.
1. Petty cash is considered a liability.
An endorsement indicating a new owner of a check.
Special endorsement
A petty cash on hand amount that is less than the recorded amount.
cash short
If a business makes a purchase for a small amount using a company debit card, would this affect petty cash. Explain.
No. This would be recorded as a credit to the cash account.
1. Check stubs are used to keep record of checks that have been written.
2. When a check is dishonored, the bank charges the fee directly to the person who wrote the check.
3. When a check is dishonored, the bank charges the fee to the person trying to deposit or cash the check.
2. When a check is dishonored, the bank charges the fee directly to the person who wrote the check.
A check which has been paid by the bank.
Cancelled check
A signature or stamp on the back of a check transferring ownership.
Endorsement
What is the source document for a petty cash expense called?
Petty cash slip
1. When reconciling the balance on a bank statement, outstanding deposits should be added to the total.
2. When reconciling the balance on a bank statement, the ending balance should equal the adjusted check stub balance.
3. When reconciling the balance on a bank statement, outstanding checks should be added to the total.
3. When reconciling the balance on a bank statement, outstanding checks should be added to the total.
A check that cannot be processed because the maker has made it invalid.
Voided check
A report of deposits, withdrawals, and bank balances sent to a depositor by a bank.
Bank statement
At the end of the month, there are 4 petty cash slips and there is $0 over and short. When petty cash is replenished, how many lines will this use in the general journal?
5 lines. 1 for each expense documented by the petty cash slips and 1 for the credit to cash.
1. Outstanding checks will always increase the balance shown on the bank statement.
2. Bank charges are deducted from the balance on the check stub.
3. Outstanding checks and deposits are first totaled before being added or deducted from the bank statement balance.
1. Outstanding checks will always increase the balance shown on the bank statement.
A check with a future date on it.
Postdated check