When Dealing with the Processing and Recording of Cash Receipts

question 72

Multiple Choice

When dealing with the processing and recording of cash receipts,

• A) the most important concern is the theft of cash.
• B) theft can only occur before the receipts are entered into the records.
• C) cash receipts should be deposited at least monthly.
• D) the monthly statement is used to prepare the cash receipts journal.

---

Definitions:

Freight-In

The cost associated with transporting goods to a warehouse or production facility, considered part of the inventory cost.

Merchandise Purchased

Expenses related to the acquisition of goods for resale in the ordinary course of business.

Ending Inventory

The overall financial value of items on offer at the termination of an accounting cycle.

Perpetual Inventory

An inventory management system that continuously updates the quantity and value of inventory in real-time with every sale or purchase.