Exam 7: Cash and Receivables

Piper, Inc. had credit sales for the period of $85,000. The balance in Allowance for Doubtful Accounts is a debit of $857. What is the credit to Allowance for Doubtful Accounts if Piper uses the aging method to estimate uncollectible accounts and an aging of Accounts Receivable reflected an estimated amount of uncollectible accounts of $6,382?

To prevent a second payment for an invoice, the check signer should ________ the documents relating to the transaction.

When writing off an account using the direct write-off method, the journal entry would include a debit to Bad Debt Expense.

The formula for the quick ratio is quick assets divided by non-current assets.

U.S. Treasury notes must mature within ________ days of the Balance Sheet date in order to be considered cash equivalents.

When using the allowance method for uncollectible accounts, the percent-of-sales method is called the:

The maturity value is the sum of the principal plus the interest due at maturity.

Lionworks Company has cash of $148,000; net Accounts Receivable of $92,000; short-term investments of $44,000 and prepaid expenses of $40,000. It also has $50,000 in current liabilities and $77,000 in long-term liabilities. The quick ratio for Lionworks Company is:

Bank reconciliations are an important part of internal control that should be performed daily.

Marla is a customer of Smiths, Inc. Her current balance due is $2,430. It has been determined that she defaulted on her account. If the company uses the direct write-off method, what entry is necessary to write off the $2,430?

Cash equivalents are:

Piper, Inc. had credit sales for the period of $85,000. The balance in Allowance for Doubtful Accounts is a debit of $827. How much will the credit be to Allowance for Doubtful Accounts if Piper uses the percent of credit sales method of estimating uncollectible accounts and they estimate that 2% of credit sales will be uncollectible?

When a customer fails to pay on their account, it creates a(n):

A company has $275,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $7,550 credit 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?

On August 9, Alice paid $3,568 to Cyrus Corp. to fulfill her promissory note agreement. Of the $3,568, $400 is interest. The journal entry Cyrus Corp. will record is to:

Another name for the quick ratio is the acid-test ratio.

Island Equipment has a petty cash fund of $360. At the end of the month, $7 remains in the fund along with $330 in various receipts. The journal entry to replenish the fund would show a debit(s)to:

A fund that contains a small amount of cash and is used to pay for minor expenditures is known as:

Which of the following is NOT a recommended control for the petty cash fund?

Valdez Company reported sales of $345,000; beginning net Accounts Receivable of $87,000 and ending net Accounts Receivable of $108,000. Valdez Company's Accounts Receivable turnover is: