Exam 6: Cash and Receivables

When completing the bank reconciliation, deposits in transit would be

An advantage of basing bad debt expense on the historical relationship between bad debts and net credit sales is that

In accounting for sales transactions, which method isolates sales discounts not taken?

Which item is not considered cash and cash equivalents on the balance sheet?

What type of account is Cash Short and Over?

Compensating balance agreements that do not legally restrict the amount of funds shown on the balance sheet should be reported in the

Wholesale Stuff, Inc. sells to retailers on account. Sales for the year totaled $9,900,000. The company uses the aging method for determining bad debt expense. The aging report and related information includes: The unadjusted balance in the allowance account at year end is $1,700 credit. What is the amount of bad debt expense for the year?

Bailey's Manufacturing Company is looking at changing their method of reporting bad debts expense. In past years the company has been able to use the direct write off method but have experienced significant growth in recent years. The accountants have prepared the following aging schedule based upon their current accounts receivable volume Required: 1) Using the above information compute the estimated amount of uncollectible receivables. 2) Prepare the journal entry to record the estimated uncollectibles. 3) Instead of the aging method compute the estimated bad debts to be: a) 2.5% of net credit sales. b) 3.5% of gross accounts receivable

Most trade receivables are initially recorded at their

Movie Set Up Company's trial balance before adjustment included the following information: Prepare journal entries assuming that the estimate of uncollectibles is determined by taking: 1) 3.5% of gross accounts receivable 2) 0.5% of net sales.

The Trey Co. sells $75,000 of accounts receivable to a factor and receives 90% of the value of the factored accounts less a 15% commission based on the gross amount of factored accounts receivable. After the journal entry to record this factoring transaction is made, Trey Co.'s total assets will be

When a company extends credit to its customers, the company realizes it will not likely collect all of the related accounts receivable. As some accounts may prove to be uncollectible, a company must estimate its bad debt expense. Required: a. What is the purpose of estimating bad debt expense? b. There are two relationships that can be used to estimate the bad debt expense for a company. Describe the two major relationships that can be used to estimate bad debts expense and the financial statement orientation of each.

Which of the following statements about accounting for discounts is true?

On June 11, Nathan, Inc. accepted a $8,000, 7%, 60-day note from a customer. On June 26, the company discounted the note at the bank at 10%. The proceeds amounted to

Park Playground, Inc. has lost some of its accounting records regarding its July cash receipts and payments. It reconciled its June 30, 2015 bank statement on July 2 and made the related adjusting entries at that time. The company has not reconciled its July 31, 2015 bank statement. It provides you with the following information on August 3: In addition, it was found that a July check for $320 included in the July 31 bank statement) to purchase office supplies was erroneously recorded in the checkbook for $120. Required: a. Prepare a bank reconciliation for the month ended July 31, 2015. b. Prepare the correcting entry for the month ended July 31, 2015.

Check 21 is a law that allows merchants to scan digital copies of checks to the bank instead of remitting the actual check.

Littlestown Corporation reports the following information: Required: Compute the correct amount of cash that will appear as a current asset on Littlestown Corporation's balance sheet.

Cash control systems are the methods and procedures used to ensure

Which method for estimating uncollectible accounts receivable is considered to be balance-sheet oriented?