ACC 400 Course Great Wisdom / tutorialrank.com ACC 400 Course Great Wisdom / tutorialrank.com | Page 24

12. The Allowance for Doubtful Accounts is a liability account. False

13. When a monthly mortgage payment is made and recorded, the
debit to Mortgage Payable represents the reduction in the principal
balance. True

PART III — MATCHING 3 points each (42 points) Match the items
below by entering the appropriate code letter in the space provided. A.
Prenumbered documents G. Cash budget B. Custody of an asset
should be kept H. Restricted cash separate from the record-keeping I.
Invest idle cash for that asset J. Canceled checks C. Television
monitors, garment sensors K. NSF checks and burglar alarms are
examples L. Outstanding checks D. Bonding employees M. Petty cash
receipt E. Collusion N. Cash equivalents F. Cash 1. Segregation of
duties. 2. Cash that is not available for general use, but instead is
restricted for a particular purpose. 3. Two or more employees
circumventing prescribed procedures. 4. Prevent a transaction from
being recorded more than once. 5. Checks which have been returned
by the maker's bank for lack of funds. 6. Checks which have been
paid by the depositor's bank. 7. A projection of anticipated cash flows.
8. Anything that a bank will accept for deposit. 9. Mechanical and
electronic control devices. 10. A basic principle of cash management.
11. Insurance protection against misappropriation of assets. 12.
Document indicating the purpose of a petty cash expenditure. 13.
Issued checks that have not been paid by the bank. 14. Highly liquid
investments.

1. B 6. J 11. D