Test I. True or False -Write T if a statement is true and F if not true. Write your letters before each number.

1. Cash and cash equivalents is an account title.

2. Good internal control requires that one employee should perform both receiving and
recording of cash.
3. A Sinking Fund becomes a current asset if the liability for which it has been set aside to
settle becomes current.
4. Restricted cash is part of cash and cash equivalents.
5. The Petty Cash Fund should be replenished daily.
6. Disclosures may be made on the face of the financial statements and not in the notes to
financial statements.
7. The cash amount reported on the statement of financial position should include cash in
bank, undeposited cash and petty cash fund.
8. Postage stamps are money substitutes.
9. A check (not postdated, stale, and technically defective) is cash but not money
Test II For each of the following items indicate whether its amount a) affects the bank or book side of the bank reconciliation, b) represents an addition or subtraction in the bank reconciliation, and
c) requires an adjusting entry. Write a check mark under the appropriate
column to indicate your answers.
Adjusting
Bank
Book
Addition Subtractio entry
n
1. Outstanding checks
2. Debit memos
3. NSF check
4. Unrecorded deposits
5. Interest on cash balance
6. Credit memos
7. Bank service charge