Question 1

Using a 360-day year, the maturity value of a 60-day note for $24,000 at 7% annual interest is (rounded to the nearest cent):

Accepted Answer

A) $24,000.00. 
B) $23,720.00. 
C) $24,280.00. 
D) $280.00. 
A) $24,000.00. 
B) $23,720.00. 
C) $24,280.00. 
D) $280.00.

Question 2

Which of the following situations would cause Danio Corp. to have an NSF check amount on its bank reconciliation?

Accepted Answer

A) Danio writes a check to a supplier that bounces. 
B) A customer writes a check to pay Danio and that check bounces. 
C) Both situations A and B will cause Danio to have an NSF check on its' bank reconciliation. 
D) Neither situation A nor B will cause Danio to have an NSF check on its' bank reconciliation. 
A) Danio writes a check to a supplier that bounces. 
B) A customer writes a check to pay Danio and that check bounces. 
C) Both situations A and B will cause Danio to have an NSF check on its' bank reconciliation. 
D) Neither situation A nor B will cause Danio to have an NSF check on its' bank reconciliation.

Question 3

A petty cash fund is established by making a check payable to Petty Cash, cashing the check, and placing the funds in the cash register.

Accepted Answer

A) True 
 B)False

Question 4

Cypress Co. has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts.  
The current balance in Allowance for Doubtful Accounts is a $144 debit.

Accepted Answer

A) $1,468 
B) $1,612 
C) $1,756 
D) $69,000 
A) $1,468 
B) $1,612 
C) $1,756 
D) $69,000

Question 5

Aspen Inc. has a petty cash fund of $265. At the end of the month, $10 remains in the fund along with $248 in various receipts. The journal entry to replenish the fund would show a debit(s)to:

Accepted Answer

A) various expenses for $248 and Cash Short of $7. 
B) various expenses for $248 and Cash Over of $7. 
C) Cash for $248. 
D) Cash for $255. 
A) various expenses for $248 and Cash Short of $7. 
B) various expenses for $248 and Cash Over of $7. 
C) Cash for $248. 
D) Cash for $255.

Question 6

After a bank reconciliation is prepared, journal entries must be made for ______ on the book side of the reconciliation and for _______ on the bank side of the reconciliation.

Accepted Answer

A) no items; all items 
B) all items; service charges 
C) receivable accounts; all items 
D) all items; no items 
A) no items; all items 
B) all items; service charges 
C) receivable accounts; all items 
D) all items; no items

Question 7

An example of good internal control over Accounts Receivable is:

Accepted Answer

A) the employee who handles the daily cash receipts also records Accounts Receivable transactions. 
B) the employee who opens the mail is also in charge of recording Accounts Receivable. 
C) there are separate employees for cash-handling and cash-accounting duties. 
D) All of the above are examples of good internal controls. 
A) the employee who handles the daily cash receipts also records Accounts Receivable transactions. 
B) the employee who opens the mail is also in charge of recording Accounts Receivable. 
C) there are separate employees for cash-handling and cash-accounting duties. 
D) All of the above are examples of good internal controls.

Question 8

The end of period adjusting entry for bad debt expense under the allowance method is:

Accepted Answer

A) Bad Debt Expense, debit; Allowance for Uncollectible Accounts, credit. 
B) not required. 
C) Cash, debit; Accounts Receivable/customer name, credit. 
D) Bad Debt Expense, debit; Accounts Receivable/customer name, credit. 
A) Bad Debt Expense, debit; Allowance for Uncollectible Accounts, credit. 
B) not required. 
C) Cash, debit; Accounts Receivable/customer name, credit. 
D) Bad Debt Expense, debit; Accounts Receivable/customer name, credit.

Question 9

Gallego & Co. reported sales of $515,000 beginning net Accounts Receivable of $219,000 and ending net Accounts Receivable of $221,000. Gallego & Co.'s Accounts Receivable turnover is:

Accepted Answer

A) 2.33. 
B) 2.34. 
C) 2.35. 
D) 1.17. 
A) 2.33. 
B) 2.34. 
C) 2.35. 
D) 1.17.

Question 10

Using a 360-day year, the maturity value of a 90-day note for $42,000 at 8% annual interest is:

Accepted Answer

A) $45,360.00. 
B) $3,360.00. 
C) $42,840.00. 
D) $42,000.00. 
A) $45,360.00. 
B) $3,360.00. 
C) $42,840.00. 
D) $42,000.00.

Question 11

The entity to whom the maker promises future payment is referred to as:

Accepted Answer

A) maker of a note. 
B) creditor. 
C) debtor. 
D) both A and C. 
A) maker of a note. 
B) creditor. 
C) debtor. 
D) both A and C.

Question 12

The total of cash in the petty cash box plus the amount of the petty cash ticket receipts should total the beginning amount of the petty cash fund.

Accepted Answer

A) True 
 B)False

Question 13

Accounts Receivable turnover measures the ability to collect cash from a company's credit customers.

Accepted Answer

A) True 
 B)False

Question 14

A company with a quick ratio of 1.90 means that the company:

Accepted Answer

A) has $1.00 in quick assets for every $1.90 in current liabilities. 
B) has $1.90 in quick assets for every $1.00 in current liabilities. 
C) could not pay off all of its current liabilities using quick assets. 
D) would have to use inventory to help pay off its current liabilities. 
A) has $1.00 in quick assets for every $1.90 in current liabilities. 
B) has $1.90 in quick assets for every $1.00 in current liabilities. 
C) could not pay off all of its current liabilities using quick assets. 
D) would have to use inventory to help pay off its current liabilities.

Question 15

Cash receipts should never be deposited more than once a business day.

Accepted Answer

A) True 
 B)False

Question 16

On September 1, 2013, Sharp Corp. lent $2,400 to Marla Smith on a 6-month 10% promissory note. The amount of interest to be accrued on December 31 will be:

Accepted Answer

A) $240. 
B) $1,440. 
C) $120. 
D) $80. 
A) $240. 
B) $1,440. 
C) $120. 
D) $80.

Question 17

In the last step of the procedure to properly control cash payments received in the mail, the ________ verifies the amount of the deposit and the total amount posted to the cash account.

Accepted Answer

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

Question 18

The payee of a note is also called the creditor.

Accepted Answer

A) True 
 B)False

Question 19

A bank statement shows the:

Accepted Answer

A) ending book balance as of a specific date. 
B) ending bank balance as of a specific date. 
C) reconciled balance as of a specific date. 
D) book errors as of a specific date. 
A) ending book balance as of a specific date. 
B) ending bank balance as of a specific date. 
C) reconciled balance as of a specific date. 
D) book errors as of a specific date.

Question 20

To ensure consistency, a good internal control policy would be to have the same person who grants credit be in charge of writing off bad debts.

Accepted Answer

A) True 
 B)False

Using a 360-day year, the maturity value of a 60-day note for $24,000 at 7% annual interest is (rounded to the nearest cent):

Which of the following situations would cause Danio Corp. to have an NSF check amount on its bank reconciliation?

A petty cash fund is established by making a check payable to Petty Cash, cashing the check, and placing the funds in the cash register.

Cypress Co. has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts. The current balance in Allowance for Doubtful Accounts is a $144 debit.

Aspen Inc. has a petty cash fund of $265. At the end of the month, $10 remains in the fund along with $248 in various receipts. The journal entry to replenish the fund would show a debit(s)to:

After a bank reconciliation is prepared, journal entries must be made for on the book side of the reconciliation and for _ on the bank side of the reconciliation.

An example of good internal control over Accounts Receivable is:

The end of period adjusting entry for bad debt expense under the allowance method is:

Gallego & Co. reported sales of $515,000 beginning net Accounts Receivable of $219,000 and ending net Accounts Receivable of $221,000. Gallego & Co.'s Accounts Receivable turnover is:

Using a 360-day year, the maturity value of a 90-day note for $42,000 at 8% annual interest is:

The entity to whom the maker promises future payment is referred to as:

The total of cash in the petty cash box plus the amount of the petty cash ticket receipts should total the beginning amount of the petty cash fund.

Accounts Receivable turnover measures the ability to collect cash from a company's credit customers.

A company with a quick ratio of 1.90 means that the company:

Cash receipts should never be deposited more than once a business day.

On September 1, 2013, Sharp Corp. lent $2,400 to Marla Smith on a 6-month 10% promissory note. The amount of interest to be accrued on December 31 will be:

In the last step of the procedure to properly control cash payments received in the mail, the ________ verifies the amount of the deposit and the total amount posted to the cash account.

The payee of a note is also called the creditor.

A bank statement shows the:

To ensure consistency, a good internal control policy would be to have the same person who grants credit be in charge of writing off bad debts.

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

Using a 360-day year, the maturity value of a 60-day note for $24,000 at 7% annual interest is (rounded to the nearest cent):

Which of the following situations would cause Danio Corp. to have an NSF check amount on its bank reconciliation?

A petty cash fund is established by making a check payable to Petty Cash, cashing the check, and placing the funds in the cash register.

Cypress Co. has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts. The current balance in Allowance for Doubtful Accounts is a $144 debit.

Aspen Inc. has a petty cash fund of $265. At the end of the month, $10 remains in the fund along with $248 in various receipts. The journal entry to replenish the fund would show a debit(s)to:

After a bank reconciliation is prepared, journal entries must be made for ______ on the book side of the reconciliation and for _______ on the bank side of the reconciliation.

An example of good internal control over Accounts Receivable is:

The end of period adjusting entry for bad debt expense under the allowance method is:

Gallego & Co. reported sales of $515,000 beginning net Accounts Receivable of $219,000 and ending net Accounts Receivable of $221,000. Gallego & Co.'s Accounts Receivable turnover is:

Using a 360-day year, the maturity value of a 90-day note for $42,000 at 8% annual interest is:

The entity to whom the maker promises future payment is referred to as:

The total of cash in the petty cash box plus the amount of the petty cash ticket receipts should total the beginning amount of the petty cash fund.

Accounts Receivable turnover measures the ability to collect cash from a company's credit customers.

A company with a quick ratio of 1.90 means that the company:

Cash receipts should never be deposited more than once a business day.

On September 1, 2013, Sharp Corp. lent $2,400 to Marla Smith on a 6-month 10% promissory note. The amount of interest to be accrued on December 31 will be:

In the last step of the procedure to properly control cash payments received in the mail, the ________ verifies the amount of the deposit and the total amount posted to the cash account.

The payee of a note is also called the creditor.

A bank statement shows the:

To ensure consistency, a good internal control policy would be to have the same person who grants credit be in charge of writing off bad debts.

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

After a bank reconciliation is prepared, journal entries must be made for on the book side of the reconciliation and for _ on the bank side of the reconciliation.