Question 1

When the net price method is used to record credit sales, the sales discounts not taken account is reported as an)

Accepted Answer

A)  addition to sales returns and allowances on the income statement. 
B)  deduction from gross sales on the income statement. 
C)  deduction from selling expenses on the income statement. 
D)  addition to sales revenue on the income statement. 
A)  addition to sales returns and allowances on the income statement. 
B)  deduction from gross sales on the income statement. 
C)  deduction from selling expenses on the income statement. 
D)  addition to sales revenue on the income statement.

Question 2

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

Accepted Answer

A)  periodically reconciling the cash account balance on the company's books to the bank statement balance 
B)  making daily bank deposits 
C)  requiring that all petty cash vouchers be approved by two signatures 
D)  authorizing and verifying that all cash received is recorded daily 
A)  periodically reconciling the cash account balance on the company's books to the bank statement balance 
B)  making daily bank deposits 
C)  requiring that all petty cash vouchers be approved by two signatures 
D)  authorizing and verifying that all cash received is recorded daily

Question 3

What is the difference between pledging receivables and assigning receivables.

Accepted Answer

A)  Pledging involves selling the receivables; assigning involves using the receivables as collateral for a loan. 
B)  Receivables are pledged without recourse; receivables are assigned with recourse. 
C)  Receivables are pledged with recourse; receivables are assigned without recourse. 
D)  There is no difference; these are two terms for the same type of financing arrangement. 
A)  Pledging involves selling the receivables; assigning involves using the receivables as collateral for a loan. 
B)  Receivables are pledged without recourse; receivables are assigned with recourse. 
C)  Receivables are pledged with recourse; receivables are assigned without recourse. 
D)  There is no difference; these are two terms for the same type of financing arrangement.

Question 4

Which of the following is not considered cash for financial statement reporting?

Accepted Answer

A)  cash, coins, and currency 
B)  travelers checks 
C)  sinking fund 
D)  negotiable instruments 
A)  cash, coins, and currency 
B)  travelers checks 
C)  sinking fund 
D)  negotiable instruments

Question 5

Puzzle Company sold merchandise on credit with a list price of $75,000. Terms were 3/10, n/30. Which of the following entries correctly applies the indicated method to record the sale?

Accepted Answer

The answer of Puzzle Company sold merchandise on credit with...

Question 6

Lockern Co. records estimated future sales returns and allowances. Total sales amount to $1,550,000, and, in the past, sales returns and allowances have been 2 1/2% of sales.
Required:
Prepare journal entries to:
a. Record the estimated sales returns and allowances.
b. Record the return of $1,000 of defective furniture.

Accepted Answer

The answer of Lockern Co. records estimated future sales returns...

Question 7

What are the two main functions of cash control systems?

Accepted Answer

A)  Control over cash and control over purchase orders 
B)  Control over checks and control over invoicing 
C)  Control over receipts and control over the bank account 
D)  Control over receipts and control over payments 
A)  Control over cash and control over purchase orders 
B)  Control over checks and control over invoicing 
C)  Control over receipts and control over the bank account 
D)  Control over receipts and control over payments

Question 8

When an uncollectible account is written off under the allowance method, the effect of the write-off is to

Accepted Answer

A)  decrease net income. 
B)  increase working capital. 
C)  increase the accounts receivable net realizable value. 
D)  leave total assets unchanged. 
A)  decrease net income. 
B)  increase working capital. 
C)  increase the accounts receivable net realizable value. 
D)  leave total assets unchanged.

Question 9

Which of the following would be included in cash and cash equivalents on the balance sheet?

Accepted Answer

A)  Travel advance funds 
B)  Undeposited credit card sales receipts 
C)  Postdated checks 
D)  Certificates of deposit 
A)  Travel advance funds 
B)  Undeposited credit card sales receipts 
C)  Postdated checks 
D)  Certificates of deposit

Question 10

Curtis Wholesalers is planning to sell some of its receivables to pay for inventory purchases. The factor has indicated it will require full guarantee with recourse on credit losses. What does this mean and how will the transaction be reflected in the financial statements of Curtis Wholesalers?

Accepted Answer

Full guarantee with recourse is a guaran

Question 11

Moose, Inc. established a $250 petty cash fund three months ago. Today, April 21, the petty cash custodian has $198 in cash and receipts for the following: office supplies $12, equipment repairs $25, postage $7, and parking fees $13.
Required:
Prepare a compound journal entry to replenish the fund and reduce its size to $200.

Accepted Answer

The answer of Moose, Inc. established a $250 petty cash...

Question 12

Stacie, Inc. sold goods for $76,000 with terms of 2/10, n/30 on May 1.
Required:
Prepare journal entries for the following:
a. The sale on May 1, assuming the gross price method is used.
b. The sale on May 1, assuming the net price method is used.
c. Receipt of payment, assuming collection is made on May 31 and the net price method is used.
d. Receipt of payment, assuming collection is made on May 9 and the gross price is used.

Accepted Answer

The answer of Stacie, Inc. sold goods for $76,000 with...

Question 13

When a company writes off an account receivable using the direct write-off method, the effect of this write-off on the financial statements is to

Accepted Answer

A)  increase the net realizable value of accounts receivable. 
B)  reduce total expenses. 
C)  reduce total assets. 
D)  increase working capital. 
A)  increase the net realizable value of accounts receivable. 
B)  reduce total expenses. 
C)  reduce total assets. 
D)  increase working capital.

Question 14

Emma Co.'s records reveal the following data at year-end:  
 Required:
Compute the correct amount of cash and cash equivalents that will appear as a current asset on Emma Co.'s balance sheet.

Accepted Answer

The answer of Emma Co.'s records reveal the following data...

Question 15

Assume that the custodian of a $500 petty cash fund has $62 in currency plus $412 in receipts at the end of the month. The entry to replenish the petty cash fund will include

Accepted Answer

A)  a credit to Cash for $412. 
B)  a credit to Cash Short and Over for $26. 
C)  a debit to Petty Cash for $438. 
D)  a credit to Cash for $438. 
A)  a credit to Cash for $412. 
B)  a credit to Cash Short and Over for $26. 
C)  a debit to Petty Cash for $438. 
D)  a credit to Cash for $438.

Question 16

Which of the following is not a basic form of financing agreement to obtain cash from accounts receivable?

Accepted Answer

A)  assigning 
B)  pledging 
C)  deferring 
D)  factoring 
A)  assigning 
B)  pledging 
C)  deferring 
D)  factoring

Question 17

What three conditions must be met for GAAP to consider the transfer of financial assets as a sale?

Accepted Answer

1 Assets are not under the control of th

Question 18

To be considered cash, the funds must be available to pay current obligations. Certain situations arise where cash is restricted and therefore cannot be considered as cash. Provide a brief description of two examples of this situation.

Accepted Answer

The answer of To be considered cash, the funds must...

Question 19

In a transfer without recourse the transferor retains the risk of ownership and bears any loss from nonpayment.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would be included in cash and cash equivalents on the balance sheet?

Accepted Answer

A)  sinking fund 
B)  bank overdrafts 
C)  commercial paper 
D)  compensating balances 
A)  sinking fund 
B)  bank overdrafts 
C)  commercial paper 
D)  compensating balances

When the net price method is used to record credit sales, the sales discounts not taken account is reported as an)

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

What is the difference between pledging receivables and assigning receivables.

Which of the following is not considered cash for financial statement reporting?

Puzzle Company sold merchandise on credit with a list price of $75,000. Terms were 3/10, n/30. Which of the following entries correctly applies the indicated method to record the sale?

What are the two main functions of cash control systems?

When an uncollectible account is written off under the allowance method, the effect of the write-off is to

Which of the following would be included in cash and cash equivalents on the balance sheet?

Curtis Wholesalers is planning to sell some of its receivables to pay for inventory purchases. The factor has indicated it will require full guarantee with recourse on credit losses. What does this mean and how will the transaction be reflected in the financial statements of Curtis Wholesalers?

When a company writes off an account receivable using the direct write-off method, the effect of this write-off on the financial statements is to

Emma Co.'s records reveal the following data at year-end: Required: Compute the correct amount of cash and cash equivalents that will appear as a current asset on Emma Co.'s balance sheet.

Assume that the custodian of a $500 petty cash fund has $62 in currency plus $412 in receipts at the end of the month. The entry to replenish the petty cash fund will include

Which of the following is not a basic form of financing agreement to obtain cash from accounts receivable?

What three conditions must be met for GAAP to consider the transfer of financial assets as a sale?

To be considered cash, the funds must be available to pay current obligations. Certain situations arise where cash is restricted and therefore cannot be considered as cash. Provide a brief description of two examples of this situation.

In a transfer without recourse the transferor retains the risk of ownership and bears any loss from nonpayment.

Which of the following would be included in cash and cash equivalents on the balance sheet?

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

When the net price method is used to record credit sales, the sales discounts not taken account is reported as an)

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

What is the difference between pledging receivables and assigning receivables.

Which of the following is not considered cash for financial statement reporting?

Puzzle Company sold merchandise on credit with a list price of $75,000. Terms were 3/10, n/30. Which of the following entries correctly applies the indicated method to record the sale?

What are the two main functions of cash control systems?

When an uncollectible account is written off under the allowance method, the effect of the write-off is to

Which of the following would be included in cash and cash equivalents on the balance sheet?

Curtis Wholesalers is planning to sell some of its receivables to pay for inventory purchases. The factor has indicated it will require full guarantee with recourse on credit losses. What does this mean and how will the transaction be reflected in the financial statements of Curtis Wholesalers?

When a company writes off an account receivable using the direct write-off method, the effect of this write-off on the financial statements is to

Emma Co.'s records reveal the following data at year-end: Required: Compute the correct amount of cash and cash equivalents that will appear as a current asset on Emma Co.'s balance sheet.

Assume that the custodian of a $500 petty cash fund has $62 in currency plus $412 in receipts at the end of the month. The entry to replenish the petty cash fund will include

Which of the following is not a basic form of financing agreement to obtain cash from accounts receivable?

What three conditions must be met for GAAP to consider the transfer of financial assets as a sale?

To be considered cash, the funds must be available to pay current obligations. Certain situations arise where cash is restricted and therefore cannot be considered as cash. Provide a brief description of two examples of this situation.

In a transfer without recourse the transferor retains the risk of ownership and bears any loss from nonpayment.

Which of the following would be included in cash and cash equivalents on the balance sheet?

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