The entry to replenish the petty cash fund debited Insurance Expense for postage. This would cause: A. Petty Cash to be overstated. B. Postage Expense to be overstated. C. Cash to be understated. D. Insurance Expense to be overstated.

The entry to replenish the petty cash fund debited Insurance Expense for postage. This would cause: A. Petty Cash to be overstated. B. Postage Expense to be overstated. C. Cash to be understated. D. Insurance Expense to be overstated.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: It is inefficient to record all cash receipts in a general journal. true false

A: The general journal is the sub part of journal in which the fallowing types of transactions are…

Q: Cullumber Corporation shipped $21,600 of merchandise on consignment to Oriole Company. Cullumber…

A: Method of recording financial transactions in the book of original entries by debiting and crediting…

Q: The type of account and normal balance of Petty Cash is a(n) Select one: A. asset, debit B.…

A: Current option is A i.e. asset, debit

Q: On a ban reconcialiation, customer's checks that are returned for lack of funds would be a.…

A: PLEASE LIKE THE ANSWER CORRECT ANSWER IS "a" i.e., deducted from the balance per company records

Q: REQUIRED: IDENTFY ONE ACCOUNT AND ONE ASSERTION FOR EACH CONDITION (IDENTIFY EITHER THE DEBIT OR…

A: Journal entries: It is the duty of the accountant to record business economic and non-economic…

Q: What is the normal balance of cash? Group of answer choices This is an ambiguous question debit…

A: Cash is a legal tender that can be used easily to buy something. It is the most liquid asset in the…

Q: Which of the following correctly describes how to reportcash?a. Restricted cash is always reported…

A: Cash: Cash is one of the most important current assets for any business entity. A current asset…

Q: The closing balance of the petty cash book is considered as ___________________ Select one: A.…

A: It is the record of petty expenses sorted of date. Generally, it is a real ledger and part of…

Q: A special cash fund used to make small payments that occur frequently is called a(n) ____.…

A: Market funds are those funds which are invested in the short term debt securities like commercial…

Q: Which of the following items should not be included in the Cash? O A. Petty cash and change funds…

A: The balance sheet represents the financial position of the business with assets and liabilities on a…

Q: Why should cash receipts be deposited on the day of receipt?

A: Cash receipts refers to the money received in the form of cash on a specific date or during a…

Q: The removal of cash from a victim organization before the cash is entered in the organization’s…

A: An accounting system is a tool used to keep track of all types of financial transactions. It is used…

Q: If a petty cash account is short and the fund is replenished, then the account that would be debited…

A: Petty cash is the cash set aside that is maintained in a business for petty expenses such as office…

Q: f an accountant mistakenly uses the General journal to record a payment of cash for a bill that is…

Q: When the amount of cash in the cash register exceeds the amount in the cash register tapes, the…

A: Cash Over and Short account is used to record the discrepancy between firms' reported sales figures…

Q: Which of the following is most likely to be used in determining a proper amount to be included in…

A: Allowance for doubtful accounts is a kind of contra asset account. It is used to decrease the value…

Q: Which of the following is recorded in the cash receipts journal?

A: Answer: Option C

Q: Why should cash receipts be deposited on the same day they are received?

A: The bank reconciliation statement is prepared to equate the balances of cash book and passbook with…

Q: Non-business cash receipts should be included on a cash flow statement. A. True B. False

A: Non business cash receipt means a receipt which is not related with business i.e it is related with…

Q: When an uncollectible account is recovered after it has been written off, which of the following…

A: When an uncollectible account is recovered after it has been written off, allowance for doubtful…

Q: After removing the Change Fund, a cash shortage exists if: a.the Petty Cash Fund is greater than the…

A: To meet daily expenses which are insignificant in nature, organisation keeps some amount of change…

Q: Which one of the following statements is NOT true about account receivables? Select one: a. Account…

A: Accounts receivable: if sale is made on cash the supplier immediately collects the cash and no…

Q: The notes receivable is debited by the bookkeeper instead of accounts receivable. What is the effect…

A: The assets have the debit balance and liabilities have the credit balance. Every transaction in the…

Q: Business receives cash RO 180 from Ms. Asma was wrongly entered RO100 in both the accounts. This…

A: Business receives cash = RO 180 Amount Wrongly entered = RO 100

Q: Cheque was issued to supplier was not presented to the bank for payment will a. Decrease in Cash…

A: Bank reconciliation: It is a statement drawn up by the business to verify the cash book balance with…

Q: Which one of the following is considered as cash? a. Credit card. b. None of these c. Certified…

A: Cash of the business means cash in hand and all other short term instruments or objects that can be…

Q: Interest on overdraft account, entered in the bank account will result in a. Increase in Bank book…

A: Introduction: Overdraft: Withdrawal of cash more than available balance is called overdraft.

Q: Required information [The following information applies to the questions displayed below.] Marco…

A: Gross Profit: Gross profit is the amount of money retained by a business after all costs associated…

Q: The revenue recognition principle a. states that revenue is not recorded until the cash is received…

A: Cash basis of accounting states that revenues are recorded in books of account when cash is received…

Q: The allowance method for uncollectible accounts a. Is required by Generally Accepted Accounting…

Q: Which adjustments need to be recorded in the accounting records? Those that affected the bank…

A: Introduction: All the paperwork and books used to create financial statements or records necessary…

Q: Which of the following would not be an appropriate heading for a column in the cash receipts…

A: Answer to Question: C) Creditors…

Q: Why are cash receipts required to be deposited the same day they are received?

A: Cash receipts represent the revenue received for the sale of goods or services.

Q: Which of the following is a true statement about petty cash account? a. It is a current liability…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: Graves Construction is journalizing two transactions related to uncollectible accounts. The first…

A: Accounts receivables are those customer accounts to whom credit sales has been made on account,but…

Q: at the time of replenishment, why are the totals of individual expenses debited? explain the…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Accounting information systems have five generic parts. Outputs of the purchases and cash…

A: Accounting is the process of recording, classifying and summarising all financial information in…

Q: I. When the check has been encashed II. When through the fault of the creditor the check has been…

A: A cheque is an instrument or document that orders the bank to pay the specific amount mentioned in…

Q: During October, Splish Brothers Lighting Company experiences the following activities related to its…

A: Petty cash is the amount which is kept with the cashier of the business entity to meet up the daily…

Concept explainers

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

The entry to replenish the petty cash fund debited Insurance Expense for postage. This would cause:

Petty Cash to be overstated.

Postage Expense to be overstated.

Cash to be understated.

Insurance Expense to be overstated.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Cash and cash equivalents

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The revenue recognition principle requires that revenues always be recorded when cash is received. True or False True False
Accounting If cash collected from customers is not yet recorded as revenue, what happens to it?
35- Which of the following should be done in case of excess cash and the reason cannot be found that day ? a) It is written to the debtor side of the 197 Counting and Receipt Deficiencies Account B) It is written to the debtor side of Account 397 Counting and Receipt Deficiencies NS) It is written to the creditor side of Account 397 Counting and Receipt Deficiencies D) 659 Debited for other ordinary expenses TO) It is written to the creditor side of Account 197 Counting and Receipt Deficiencies
Why do we need to provide allowance for doubtful accounts in accounting for receivables? Is it necessary? Explain your answer.
Explain and answer the following questions below: 1. Explain the measurement of accounts receivable. 2. Explain the treatment of dishonored notes. 3. What is the meaning of cash equivalent?
Discuss the conversion from cash basis to accrual basis of a decrease in accounts/notes receivables and payables.
For control purposes, any cash overage should be O credited to Other Income account O offset to previous shortages of the cashier O credited to retained earnings account O paid to the cashier who incurred such overage
Once an accounts receivable is written off does the company still pursue collection or is the receivable removed from the books or does the company expect to be paid or the account must be turned over to a collection agency?
When referring to a note receivable or promissory note a.the note cannot be factored to another party b.the note may be used to settle an account receivable c.the note is not considered a formal credit instrument d.the maker is the party to whom the money is due
When a depositor can take out more than the amount of funds, he/she has within an account is known as: O a. Discounted Bill of Exchange O b. Overdraft Facility OC. Term Loan O d. Money at call
9 - Which of the following should be done if there is a shortage of cash and the reason cannot be found that day ? a) It is written to the creditor side of Account 197 Counting and Receipt Deficiencies B) It is written to the creditor side of Account 397 Counting and Receipt Deficiencies NS) 659 Debited for other ordinary expenses D) It is written to the debtor side of the 197 Counting and Receipt Deficiencies Account TO) It is written to the debtor side of Account 397 Counting and Receipt Deficiencies
23.At the end of the accounting period, the petty cash fund/drawer showed petty cash vouchers for expenses paid from the fund that have not been reimbursed. If no adjusting entry is made at year end, a. cash will be understated and expenses will be overstated. b. cash will be overstated and expenses will be understated c. cash and net income will be understated. d. cash and expenses will be overstated.