Question 1

Given the following information:  
The total amount of cash that should appear on the balance sheet is

Accepted Answer

A)  $ \$ 34,648 $ 
B)  $ \$ 34,590 $ 
C)  $ \$ 34,040 $ 
D)  $ \$ 35,415 $ 
A)  $ \$ 34,648 $ 
B)  $ \$ 34,590 $ 
C)  $ \$ 34,040 $ 
D)  $ \$ 35,415 $

Question 2

A member of the board of directors has just returned from a meeting with the external auditors concerning the company's internal controls. The director noticed that the auditors stressed the importance of cash control and wants you, the company controller, to explain internal controls for cash.
Required:
a. Define internal control and explain its purpose.
b. Identify at least four typical internal controls over cash.

Accepted Answer

a. Internal control consists of the poli

Question 3

The two forms of secured borrowing that companies use to obtain cash from accounts receivables are pledging and assigning.

Accepted Answer

A) True 
 B)False

Question 4

Current GAAP requires a company to disclose the fair value of its financial instruments and to disclose all significant concentrations of credit risk due to its financial instruments. The FASB's rationale for this disclosure includes allowing readers to

Accepted Answer

A)  better identify major customers. 
B)  compute each company's risk. 
C)  better determine a company's financial flexibility. 
D)  compute liquidity ratios. 
A)  better identify major customers. 
B)  compute each company's risk. 
C)  better determine a company's financial flexibility. 
D)  compute liquidity ratios.

Question 5

Max Corp. sold goods for $36,000 on July 17, 2014, and accepted a 12%, 90-day note. On August 1, the note was sold to a bank at a 15% discount rate.
Required:
a. Compute the proceeds.
b. If the maker dishonored the note at maturity, prepare an entry or entries) for Max Corp. assuming $75 of bank protest fees.

Accepted Answer

The answer of Max Corp. sold goods for $36,000 on...

Question 6

Which of the following types of discounts are offered to induce prompt payment by customers?

Accepted Answer

A)  Quantity discounts 
B)  Nontrade discounts 
C)  Trade discounts 
D)  Sales discounts 
A)  Quantity discounts 
B)  Nontrade discounts 
C)  Trade discounts 
D)  Sales discounts

Question 7

Short-term noninterest-bearing notes receivable are usually recorded at their

Accepted Answer

A)  present value. 
B)  net realizable value. 
C)  principal value. 
D)  maturity value. 
A)  present value. 
B)  net realizable value. 
C)  principal value. 
D)  maturity value.

Question 8

What are the two methods for recording a sales transaction on account when a cash discount is involved? Under what conditions is each method theoretically preferred?

Accepted Answer

The two methods for recording sales on a

Question 9

A company transfers ownership control of accounts receivable in all of the following financing arrangements except

Accepted Answer

A)  Factoring receivables. 
B)  Selling receivables. 
C)  Pledging receivables. 
D)  Securitizing receivables. 
A)  Factoring receivables. 
B)  Selling receivables. 
C)  Pledging receivables. 
D)  Securitizing receivables.

Question 10

Which of the following would not be a contractual restriction to the cash available to pay current obligations?

Accepted Answer

A)  Sinking fund 
B)  Certificate of Deposit 
C)  Postdated checks 
D)  Negotiable instruments 
A)  Sinking fund 
B)  Certificate of Deposit 
C)  Postdated checks 
D)  Negotiable instruments

Question 11

On a bank reconciliation, customers' checks that are returned for lack of funds would be

Accepted Answer

A)  deducted from the balance per company records. 
B)  deducted from the balance per bank statement. 
C)  added to the balance per bank statement. 
D)  added to the balance per company records. 
A)  deducted from the balance per company records. 
B)  deducted from the balance per bank statement. 
C)  added to the balance per bank statement. 
D)  added to the balance per company records.

Question 12

When preparing a bank reconciliation, outstanding checks would be

Accepted Answer

A)  added to the balance per bank statement. 
B)  added to the balance per company records 
C)  deducted from the balance per bank statement 
D)  deducted from the balance per company records 
A)  added to the balance per bank statement. 
B)  added to the balance per company records 
C)  deducted from the balance per bank statement 
D)  deducted from the balance per company records

Question 13

On December 1, the Harrison Company sold without recourse $345,000 of its accounts receivable to Happy Finance Company for 85% of their value. A 10% commission on the gross value of the factored accounts was charged.
Required:
a. Prepare the journal entry to record the factoring.
b. Briefly discuss how the factored accounts are disclosed in the financial statements.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& b. A formal factor

Question 14

The following information for the month of March is available from Butters Cookies, Inc.'s accounting records:

Required:
a. Prepare a March 31, 2014, bank reconciliation in good form.
b. Prepare any related adjusting entries that are necessary on March 31, 2014.

Accepted Answer

The answer of The following information for the month of...

Question 15

In a well-controlled petty cash fund, the amount of cash minus the amount of expenditure vouchers should be equal to the original amount in the petty cash fund.

Accepted Answer

A) True 
 B)False

Question 16

What is the difference between Trade Receivables and Nontrade Receivables?

Accepted Answer

Trade Receivables are amounts owed to th

Question 17

Items classified as "cash" on the balance sheet

Accepted Answer

A)  are limited to coins, currency, or bank drafts. 
B)  must be available to pay current obligations. 
C)  may be subject to contractual restrictions. 
D)  do not include negotiable checks or bank drafts. 
A)  are limited to coins, currency, or bank drafts. 
B)  must be available to pay current obligations. 
C)  may be subject to contractual restrictions. 
D)  do not include negotiable checks or bank drafts.

Question 18

Which of the following is a key element of internal control over cash receipts?

Accepted Answer

A)  Making all payments by check 
B)  Authorize and sign checks only after approval 
C)  Reconcile the bank account 
D)  Immediate counting of cash in the cash register when a new cashier begins working 
A)  Making all payments by check 
B)  Authorize and sign checks only after approval 
C)  Reconcile the bank account 
D)  Immediate counting of cash in the cash register when a new cashier begins working

Question 19

If a company usually sells its accounts receivable, it records any factoring commissions as an)

Accepted Answer

A)  loss. 
B)  expense. 
C)  receivable. 
D)  liability. 
A)  loss. 
B)  expense. 
C)  receivable. 
D)  liability.

Question 20

When aging of accounts receivable is used, each age group is multiplied by its own estimated uncollectible percentage to determine each age group's estimated uncollectible amount. The sum of the amounts thus determined is the

Accepted Answer

A)  amount of bad debt expense for the year. 
B)  required ending balance for the allowance for doubtful accounts. 
C)  increase to the existing credit balance in the allowance for doubtful accounts. 
D)  amount that should be written off as uncollectible for the year. 
A)  amount of bad debt expense for the year. 
B)  required ending balance for the allowance for doubtful accounts. 
C)  increase to the existing credit balance in the allowance for doubtful accounts. 
D)  amount that should be written off as uncollectible for the year.

Given the following information: The total amount of cash that should appear on the balance sheet is

The two forms of secured borrowing that companies use to obtain cash from accounts receivables are pledging and assigning.

Current GAAP requires a company to disclose the fair value of its financial instruments and to disclose all significant concentrations of credit risk due to its financial instruments. The FASB's rationale for this disclosure includes allowing readers to

Which of the following types of discounts are offered to induce prompt payment by customers?

Short-term noninterest-bearing notes receivable are usually recorded at their

What are the two methods for recording a sales transaction on account when a cash discount is involved? Under what conditions is each method theoretically preferred?

A company transfers ownership control of accounts receivable in all of the following financing arrangements except

Which of the following would not be a contractual restriction to the cash available to pay current obligations?

On a bank reconciliation, customers' checks that are returned for lack of funds would be

When preparing a bank reconciliation, outstanding checks would be

The following information for the month of March is available from Butters Cookies, Inc.'s accounting records: Required: a. Prepare a March 31, 2014, bank reconciliation in good form. b. Prepare any related adjusting entries that are necessary on March 31, 2014.

In a well-controlled petty cash fund, the amount of cash minus the amount of expenditure vouchers should be equal to the original amount in the petty cash fund.

What is the difference between Trade Receivables and Nontrade Receivables?

Items classified as "cash" on the balance sheet

Which of the following is a key element of internal control over cash receipts?

If a company usually sells its accounts receivable, it records any factoring commissions as an)

When aging of accounts receivable is used, each age group is multiplied by its own estimated uncollectible percentage to determine each age group's estimated uncollectible amount. The sum of the amounts thus determined is the

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Company S Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows Time Value of Money Module

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingent Obligations

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Long-Term Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Post-Retirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Understanding Time Value of Money Formulas and Concepts

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Exam 6: Cash and Receivables

Given the following information: The total amount of cash that should appear on the balance sheet is

The two forms of secured borrowing that companies use to obtain cash from accounts receivables are pledging and assigning.

Current GAAP requires a company to disclose the fair value of its financial instruments and to disclose all significant concentrations of credit risk due to its financial instruments. The FASB's rationale for this disclosure includes allowing readers to

Which of the following types of discounts are offered to induce prompt payment by customers?

Short-term noninterest-bearing notes receivable are usually recorded at their

What are the two methods for recording a sales transaction on account when a cash discount is involved? Under what conditions is each method theoretically preferred?

A company transfers ownership control of accounts receivable in all of the following financing arrangements except

Which of the following would not be a contractual restriction to the cash available to pay current obligations?

On a bank reconciliation, customers' checks that are returned for lack of funds would be

When preparing a bank reconciliation, outstanding checks would be

The following information for the month of March is available from Butters Cookies, Inc.'s accounting records: Required: a. Prepare a March 31, 2014, bank reconciliation in good form. b. Prepare any related adjusting entries that are necessary on March 31, 2014.

In a well-controlled petty cash fund, the amount of cash minus the amount of expenditure vouchers should be equal to the original amount in the petty cash fund.

What is the difference between Trade Receivables and Nontrade Receivables?

Items classified as "cash" on the balance sheet

Which of the following is a key element of internal control over cash receipts?

If a company usually sells its accounts receivable, it records any factoring commissions as an)

When aging of accounts receivable is used, each age group is multiplied by its own estimated uncollectible percentage to determine each age group's estimated uncollectible amount. The sum of the amounts thus determined is the

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Company S Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows Time Value of Money Module

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingent Obligations

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Long-Term Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Post-Retirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Understanding Time Value of Money Formulas and Concepts

Filters