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