Question 1

Which of the following would not be reported on the financial statements?

Accepted Answer

A)  sales discount taken 
B)  trade receivables 
C)  trade discounts 
D)  sales discounts not taken 
A)  sales discount taken 
B)  trade receivables 
C)  trade discounts 
D)  sales discounts not taken

Question 2

All of the following are nontrade receivables except

Accepted Answer

A)  declared dividend from an investment. 
B)  advances to executives and employees. 
C)  promissory note from a customer. 
D)  deposit paid to utility companies. 
A)  declared dividend from an investment. 
B)  advances to executives and employees. 
C)  promissory note from a customer. 
D)  deposit paid to utility companies.

Question 3

Nontrade receivables, such as deposits with utility companies or advances to subsidiary companies, should be

Accepted Answer

A)  recorded in separate accounts and reported as noncurrent assets on the balance sheet. 
B)  recorded along with trade receivables in one account and included as part of the total receivables balance on the balance sheet. 
C)  recorded in separate accounts and separately reported on the balance sheet. 
D)  recorded in separate accounts and reported as an offset to retained earnings on the balance sheet. 
A)  recorded in separate accounts and reported as noncurrent assets on the balance sheet. 
B)  recorded along with trade receivables in one account and included as part of the total receivables balance on the balance sheet. 
C)  recorded in separate accounts and separately reported on the balance sheet. 
D)  recorded in separate accounts and reported as an offset to retained earnings on the balance sheet.

Question 4

On April 7, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, the company sold the note to a bank at a 13% discount rate.
Required:
Compute the amount of interest revenue and the loss on sale of the note.

Accepted Answer

The answer of On April 7, Wilhelm, Inc. sold goods...

Question 5

Which of the following is an example of a factoring agreement?

Accepted Answer

A)  Selling an individual account receivable to a bank 
B)  Selling financial securities that are collateralized by accounts receivable 
C)  Pledging an single large account receivable to a bank 
D)  Assigning a group of accounts receivable as collateral for a loan 
A)  Selling an individual account receivable to a bank 
B)  Selling financial securities that are collateralized by accounts receivable 
C)  Pledging an single large account receivable to a bank 
D)  Assigning a group of accounts receivable as collateral for a loan

Question 6

Recording short-term noninterest-bearing notes receivable at their maturity value

Accepted Answer

A)  overstates interest income and understates sales revenue. 
B)  overstates sales revenue and understates interest income. 
C)  correctly states sales revenue and interest income. 
D)  is prohibited by GAAP. 
A)  overstates interest income and understates sales revenue. 
B)  overstates sales revenue and understates interest income. 
C)  correctly states sales revenue and interest income. 
D)  is prohibited by GAAP.

Question 7

On August 2 Banger Mash Company sold merchandise to the Boise Potato Company in the amount of $6,500 with terms of 3/10 n/30,
f.o.b. shipping. An invoice in the amount of $180 was received by Boise Potato for the freight. On August 12 Banger Mash received the money due for the merchandise purchased.
Required: 
1) Prepare the journal entries for the sale and subsequent collection from the customer for Banger Mash using the gross method.
2) Prepare the journal entries for the sale and subsequent collection from the customer for Banger Mash using the net method.
3) Prepare the journal entry to record payment using the net method and assuming Boise did not pay the invoice due until August 25.

Accepted Answer

The answer of On August 2 Banger Mash Company sold...

Question 8

Under the allowance method of recording bad debts, which of the following entries, if any, would be made to write off actual uncollectible accounts of $5,500?

Accepted Answer

The answer of Under the allowance method of recording bad...

Question 9

What is a bank reconciliation and what is its importance?

Accepted Answer

The bank reconciliation is the analysis

Question 10

To classify a receivable as a current asset it must be collected within one year or the normal operating cycle of the business, whichever is shorter.

Accepted Answer

A) True 
 B)False

Question 11

Below is a list of items. Classify each into one of the following balance sheet categories:
a. Cash
b. Receivables
c. Short-term Investments
d. Other
   _____ 9 Compensating balances held in long-term
borrowing arrangements
_____ 10 Travel Advances

Accepted Answer

1 a 3 a 5

Question 12

Which of the following would be reported as a liability?

Accepted Answer

A)  demand deposits 
B)  bank overdrafts 
C)  certificates of deposit 
D)  travel advances 
A)  demand deposits 
B)  bank overdrafts 
C)  certificates of deposit 
D)  travel advances

Which of the following would not be reported on the financial statements?

All of the following are nontrade receivables except

Nontrade receivables, such as deposits with utility companies or advances to subsidiary companies, should be

On April 7, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, the company sold the note to a bank at a 13% discount rate. Required: Compute the amount of interest revenue and the loss on sale of the note.

Which of the following is an example of a factoring agreement?

Recording short-term noninterest-bearing notes receivable at their maturity value

Under the allowance method of recording bad debts, which of the following entries, if any, would be made to write off actual uncollectible accounts of $5,500?

What is a bank reconciliation and what is its importance?

To classify a receivable as a current asset it must be collected within one year or the normal operating cycle of the business, whichever is shorter.

Below is a list of items. Classify each into one of the following balance sheet categories: a. Cash b. Receivables c. Short-term Investments d. Other _ 9 Compensating balances held in long-term borrowing arrangements _ 10 Travel Advances

Which of the following would be reported as a liability?

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

Exam 6: Cash and Receivables

Which of the following would not be reported on the financial statements?

All of the following are nontrade receivables except

Nontrade receivables, such as deposits with utility companies or advances to subsidiary companies, should be

On April 7, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, the company sold the note to a bank at a 13% discount rate. Required: Compute the amount of interest revenue and the loss on sale of the note.

Which of the following is an example of a factoring agreement?

Recording short-term noninterest-bearing notes receivable at their maturity value

Under the allowance method of recording bad debts, which of the following entries, if any, would be made to write off actual uncollectible accounts of $5,500?

What is a bank reconciliation and what is its importance?

To classify a receivable as a current asset it must be collected within one year or the normal operating cycle of the business, whichever is shorter.

Below is a list of items. Classify each into one of the following balance sheet categories: a. Cash b. Receivables c. Short-term Investments d. Other _____ 9 Compensating balances held in long-term borrowing arrangements _____ 10 Travel Advances

Which of the following would be reported as a liability?

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

Below is a list of items. Classify each into one of the following balance sheet categories: a. Cash b. Receivables c. Short-term Investments d. Other _ 9 Compensating balances held in long-term borrowing arrangements _ 10 Travel Advances