Chapter 7: Q8RQ (page 411)
How do businesses control cash receipts over the counter?
Short Answer
Cash receipts are controlled with the help of a point-of-sale terminal.
Chapter 7: Q8RQ (page 411)
How do businesses control cash receipts over the counter?
Cash receipts are controlled with the help of a point-of-sale terminal.
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Recording credit card and debit card sales
Restaurants do a large volume of business with credit and debit cards. Suppose Summer,
Sand, and Castles Resort restaurant had these transactions on January 28, 2018:
National Express credit card sales $ 10,800
ValueCard debit card sales 10,000
Requirements
1. Suppose Summer, Sand, and Castles Resortโs processor charges a 2% fee anddeposits sales net of the fee. Journalize these sales transactions for the restaurant.
2. Suppose Summer, Sand, and Castles Resortโs processor charges a 2% fee anddeposits sales using the gross method. Journalize these sales transactions for therestaurant.
Journalizing petty cash
Prepare the journal entries for the following petty cash transactions of Everly Gaming
Supplies:
March 1 Established a petty cash fund with a \(250 balance.
31 The petty cash fund has \)24 in cash and \(235 in petty cash tickets
that were issued to pay for Office Supplies (\)35) and Entertainment
Expense (\(200). Replenished the fund and recorded the expenditures.
April 15 Increased the balance of the petty cash fund to \)300.
Preparing a bank reconciliation and journal entries
The May cash records of Donald Insurance follow:
Cash Receipts Cash Payments
Date Cash Debit Check No. Cash Credit
May 4 \( 4,230 1416 \) 890
9 520 1417 120
14 530 1418 630
17 1,950 1419 1,090
31 1,840 1420 1,420
1421 900
1422 670
Donaldโs Cash account shows a balance of \(17,750 at May 31. On May 31, Donald
Insurance received the following bank statement:
Deposits and other Credits:
May 10
May 1
May 5
May 15
May 18
May 22
Checks and other Debits:
8
11 (check no. 1416)
19
22 (check no. 1417)
29 (check no. 1418)
31 (check no. 1419)
May
May
May
May
May
May
May 31
Ending Balance
Beginning Balance
EFT \) 450
NSF
EFT
BC
\( 18,730
1,700
890
1,100
120
520
4,230
530
1,950
\) 14,400
9,380
375
630
1,900
35 (5,050)
Bank Statement for May
SC
Explanations: BCโbank collection; EFTโelectronic funds transfer;
NSFโnonsufficient funds checks; SCโservice charge
Additional data for the bank reconciliation follow:
a. The EFT credit was a receipt of rent. The EFT debit was an insurance
payment.
b. The NSF check was received from a customer.
c. The \(1,700 bank collection was for a note receivable.
d. The correct amount of check 1419, for rent expense, is \)1,900. Donaldโs controller
mistakenly recorded the check for $1,090.
Requirements
1. Prepare the bank reconciliation of Donald Insurance at May 31, 2018.
2. Journalize any required entries from the bank reconciliation
What is separation of duties?
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