CB Banking and Cash Management 2

Question 1

What is the primary characteristic of an imprest petty cash system?

Accepted Answer

The petty cash fund is maintained at a fixed amount and replenished back to that level

Answer

Under the imprest system, petty cash is kept at a constant predetermined balance, and the fund is always replenished to restore it to exactly that fixed amount.

Question 2

When replenishing a petty cash fund, the correct journal entry is:

Accepted Answer

Debit various expense accounts; credit cash (checking account)

Answer

To replenish petty cash, you debit the appropriate expense accounts for disbursements made and credit the checking account for the total replenishment amount.

Question 3

Which of the following represents the best internal control for handling cash receipts?

Accepted Answer

Separating the duties of receiving cash from recording cash transactions

Answer

Segregation of duties ensures no single person controls all aspects of a cash transaction, significantly reducing the risk of theft or undetected error.

Question 4

A petty cash voucher primarily serves as:

Accepted Answer

Documentation authorizing and recording each petty cash disbursement

Answer

A petty cash voucher documents the purpose, amount, recipient, and authorization for each payment, providing the supporting evidence required for that disbursement.

Question 5

For proper internal control, bank reconciliations should be prepared by:

Accepted Answer

An employee independent of cash handling and check-writing functions

Answer

Bank reconciliations must be performed by someone independent of cash-handling and recording duties to prevent the concealment of errors or fraud.

(CB) Certified Bookkeeper Practice Test

(CB) Certified Bookkeeper Practice Test

CB Banking and Cash Management 2