Question 1

Online banking should NOT be used to reconcile the bank account.

Accepted Answer

A) True 
 B)False

Question 2

Piper Inc. has cash of $63,000; net Accounts Receivable of $77,000; short-term investments of $20,000 and inventory of $68,000. It also has $47,000 in current liabilities and $73,000 in long-term liabilities. The current ratio for Piper Inc. is:

Accepted Answer

A) 1.55. 
B) 3.40. 
C) 1.34. 
D) 4.85. 
A) 1.55. 
B) 3.40. 
C) 1.34. 
D) 4.85.

Question 3

A company with an Accounts Receivable turnover of 11.78 would be collecting its receivables about:

Accepted Answer

A) once a week. 
B) once a month. 
C) once a quarter. 
D) once a year. 
A) once a week. 
B) once a month. 
C) once a quarter. 
D) once a year.

Question 4

A company has $321,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has an $8,150 debit balance. If the company estimates 5% of credit sales will be uncollectible, what will be the amount of the journal entry to record estimated uncollectible accounts?

Accepted Answer

A) $8,150 
B) $24,200 
C) $7,900 
D) $16,050 
A) $8,150 
B) $24,200 
C) $7,900 
D) $16,050

Question 5

On a bank reconciliation, outstanding checks are:

Accepted Answer

A) added to the book balance. 
B) added to the bank balance. 
C) subtracted from the book balance. 
D) subtracted from the bank balance. 
A) added to the book balance. 
B) added to the bank balance. 
C) subtracted from the book balance. 
D) subtracted from the bank balance.

Question 6

Differences between when a company records a transaction and when the bank records the same transaction are called "timing" differences.

Accepted Answer

A) True 
 B)False

Question 7

Allied Inc. has an Account Receivable balance of $27,500 and its Allowance for Uncollectible Accounts balance is $1,250. How will this be reported on the Balance Sheet?

Accepted Answer

A) Accounts Receivable 27,500 Less: Allowance for Uncollectible Accounts 1,250 Accounts Receivable, Net $26,250 
B) Accounts Receivable $26,250 
C) Accounts Receivable, Net of Allowance for Uncollectible Accounts of $1,250 $26,250 
D) Both A and C are acceptable ways to report Accounts Receivable. 
A) Accounts Receivable 27,500 Less: Allowance for Uncollectible Accounts 1,250 Accounts Receivable, Net $26,250 
B) Accounts Receivable $26,250 
C) Accounts Receivable, Net of Allowance for Uncollectible Accounts of $1,250 $26,250 
D) Both A and C are acceptable ways to report Accounts Receivable.

Question 8

Notes receivable generally include a charge for interest.

Accepted Answer

A) True 
 B)False

Question 9

The contra-account, Allowance for Doubtful Accounts, is credited when journal entries are made for estimates of bad debts.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would NOT be considered cash?

Accepted Answer

A) Currency 
B) Money market funds 
C) Money orders 
D) Checking accounts 
A) Currency 
B) Money market funds 
C) Money orders 
D) Checking accounts

Question 11

Valdez Company reported sales of $342,000; beginning net Accounts Receivable of $89,000 and ending net Accounts Receivable of $111,000. Valdez Company's receivable collection period (rounded to the nearest day)is:

Accepted Answer

A) 107. 
B) 213. 
C) 118. 
D) 274. 
A) 107. 
B) 213. 
C) 118. 
D) 274.

Question 12

Under the direct write-off method, to record the receipt of cash after an account has previously been written off, you would first:

Accepted Answer

A) debit Cash and credit the customer's account. 
B) reinstate the customer's account. 
C) debit Allowance for Doubtful Accounts. 
D) debit Bad Debt Expense. 
A) debit Cash and credit the customer's account. 
B) reinstate the customer's account. 
C) debit Allowance for Doubtful Accounts. 
D) debit Bad Debt Expense.

Question 13

Once the merchandise is received from the supplier, the company:

Accepted Answer

A) issues an invoice. 
B) issues a check. 
C) completes a purchase order. 
D) completes a receiving report. 
A) issues an invoice. 
B) issues a check. 
C) completes a purchase order. 
D) completes a receiving report.

Question 14

Which of the following is TRUE?

Accepted Answer

A) The allowance method requires a business to estimate bad debt expense. 
B) The allowance method requires a business to record only actual bad debt expense. 
C) The allowance method allows a business to choose between recording actual or estimated bad debt expense. 
D) The allowance method does not relate to bad debts expense. It is a method used to prepare a bank reconciliation. 
A) The allowance method requires a business to estimate bad debt expense. 
B) The allowance method requires a business to record only actual bad debt expense. 
C) The allowance method allows a business to choose between recording actual or estimated bad debt expense. 
D) The allowance method does not relate to bad debts expense. It is a method used to prepare a bank reconciliation.

Question 15

Cesario Auto's bank statement shows a bank balance of $43,567. The statement shows a bank service charge of $20 and a note collection of $840 on Cesario Auto's behalf. Cesario Auto's book balance should be adjusted by a total of:

Accepted Answer

A) +$860. 
B) +$840. 
C) +$820. 
D) -$820. 
A) +$860. 
B) +$840. 
C) +$820. 
D) -$820.

Question 16

DogCo has a petty cash fund of $265. At the end of the month, $10 remains in the fund along with $258 in various receipts. The journal entry to replenish the fund would be to:

Accepted Answer

A) debit various expenses, $258; debit Cash Short for $3 and credit Cash for $261. 
B) debit various expenses, $258; credit Cash Over for $3 and credit Cash for $255. 
C) debit Petty Cash for $255 and credit Cash for $255. 
D) debit various expenses, $258 and credit Cash for $258. 
A) debit various expenses, $258; debit Cash Short for $3 and credit Cash for $261. 
B) debit various expenses, $258; credit Cash Over for $3 and credit Cash for $255. 
C) debit Petty Cash for $255 and credit Cash for $255. 
D) debit various expenses, $258 and credit Cash for $258.

Question 17

The cash register provides control over the cash receipts for a retail business.

Accepted Answer

A) True 
 B)False

Question 18

As part of the procedure to properly control cash payments received in the mail, after the mailroom employee opens the cash receipts, the remittance advices go to the:

Accepted Answer

A) Controller. 
B) accounting department. 
C) Treasurer. 
D) bank. 
A) Controller. 
B) accounting department. 
C) Treasurer. 
D) bank.

Question 19

Using a 365-day year, the maturity value of a 55-day, 6% note for $22,000 rounded to the nearest cent is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Accepted Answer

A) $22,000.00. 
B) $22,198.90. 
C) $21,801.10. 
D) $23,320.00. 
A) $22,000.00. 
B) $22,198.90. 
C) $21,801.10. 
D) $23,320.00.

Question 20

Before signing a check to pay for a purchase, the ________ should examine the documents supporting the purchase.

Accepted Answer

A) Controller 
B) purchasing agent 
C) Treasurer 
D) manager 
A) Controller 
B) purchasing agent 
C) Treasurer 
D) manager

Online banking should NOT be used to reconcile the bank account.

Piper Inc. has cash of $63,000; net Accounts Receivable of $77,000; short-term investments of $20,000 and inventory of $68,000. It also has $47,000 in current liabilities and $73,000 in long-term liabilities. The current ratio for Piper Inc. is:

A company with an Accounts Receivable turnover of 11.78 would be collecting its receivables about:

On a bank reconciliation, outstanding checks are:

Differences between when a company records a transaction and when the bank records the same transaction are called "timing" differences.

Allied Inc. has an Account Receivable balance of $27,500 and its Allowance for Uncollectible Accounts balance is $1,250. How will this be reported on the Balance Sheet?

Notes receivable generally include a charge for interest.

The contra-account, Allowance for Doubtful Accounts, is credited when journal entries are made for estimates of bad debts.

Which of the following would NOT be considered cash?

Valdez Company reported sales of $342,000; beginning net Accounts Receivable of $89,000 and ending net Accounts Receivable of $111,000. Valdez Company's receivable collection period (rounded to the nearest day)is:

Under the direct write-off method, to record the receipt of cash after an account has previously been written off, you would first:

Once the merchandise is received from the supplier, the company:

Which of the following is TRUE?

Cesario Auto's bank statement shows a bank balance of $43,567. The statement shows a bank service charge of $20 and a note collection of $840 on Cesario Auto's behalf. Cesario Auto's book balance should be adjusted by a total of:

DogCo has a petty cash fund of $265. At the end of the month, $10 remains in the fund along with $258 in various receipts. The journal entry to replenish the fund would be to:

The cash register provides control over the cash receipts for a retail business.

As part of the procedure to properly control cash payments received in the mail, after the mailroom employee opens the cash receipts, the remittance advices go to the:

Using a 365-day year, the maturity value of a 55-day, 6% note for $22,000 rounded to the nearest cent is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Before signing a check to pay for a purchase, the ________ should examine the documents supporting the purchase.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 7: Cash and Receivables

Online banking should NOT be used to reconcile the bank account.

Piper Inc. has cash of $63,000; net Accounts Receivable of $77,000; short-term investments of $20,000 and inventory of $68,000. It also has $47,000 in current liabilities and $73,000 in long-term liabilities. The current ratio for Piper Inc. is:

A company with an Accounts Receivable turnover of 11.78 would be collecting its receivables about:

On a bank reconciliation, outstanding checks are:

Differences between when a company records a transaction and when the bank records the same transaction are called "timing" differences.

Allied Inc. has an Account Receivable balance of $27,500 and its Allowance for Uncollectible Accounts balance is $1,250. How will this be reported on the Balance Sheet?

Notes receivable generally include a charge for interest.

The contra-account, Allowance for Doubtful Accounts, is credited when journal entries are made for estimates of bad debts.

Which of the following would NOT be considered cash?

Valdez Company reported sales of $342,000; beginning net Accounts Receivable of $89,000 and ending net Accounts Receivable of $111,000. Valdez Company's receivable collection period (rounded to the nearest day)is:

Under the direct write-off method, to record the receipt of cash after an account has previously been written off, you would first:

Once the merchandise is received from the supplier, the company:

Which of the following is TRUE?

Cesario Auto's bank statement shows a bank balance of $43,567. The statement shows a bank service charge of $20 and a note collection of $840 on Cesario Auto's behalf. Cesario Auto's book balance should be adjusted by a total of:

DogCo has a petty cash fund of $265. At the end of the month, $10 remains in the fund along with $258 in various receipts. The journal entry to replenish the fund would be to:

The cash register provides control over the cash receipts for a retail business.

As part of the procedure to properly control cash payments received in the mail, after the mailroom employee opens the cash receipts, the remittance advices go to the:

Using a 365-day year, the maturity value of a 55-day, 6% note for $22,000 rounded to the nearest cent is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Before signing a check to pay for a purchase, the ________ should examine the documents supporting the purchase.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters