Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 7 - Cash and Receivables - Review and Practice - Questions - Page 363: 24


1. The general checking account is the main bank account of most entities and frequently the only bank account of small companies. Most if not all transactions are either cycled through the general checking account, either directly or on an imprest basis 2. The Imprest bank accounts are utilized to disburse checks for a definite purpose, such as payroll, travel expenses, commissions or dividends. Cash is deposited in the imprest fund from the general fund in an amount necessary to cover a specific group of disbursements. 3. Lockbox accounts are local post office boxes to which a multi-location company instructs its customers to mail remittances. A local bank is sanctioned to empty the box daily and credit the company’s accounts for the collections.

Work Step by Step

These are the most common types of accounts affiliated with business entities.
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