Unit 6 Cash Control Systems Review

A check stub is a business’s record of each check written.

• True
• False

The amount of a check is written in words to verify the amount written in figures.

• True
• False

Outstanding checks are those checks issued by a depositor but not yet reported on a bank statement.

• True
• False

Outstanding deposits are subtracted from and outstanding checks are added to the balance on the bank statement to calculate the adjusted bank balance.

• True
• False

A bank service charge must be recorded as a cash payment.

• True
• False

A memorandum is the source document for a bank service charge transaction.

• True
• False

A bank service charge transaction is recorded as a debit to both Miscellaneous Expense and Cash.

• True
• False

The fee charged by the bank for handling a dishonored check is an expense of the business that wrote the check. This statement is (a)  

• True
• False

The journal entry for making payments on account through electronic funds transfer is recorded as a debit to the vendor’s accounts payable account and a credit to cash.

• True
• False

A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder is called a debit card.

• True
• False