Question 1

Cash equivalents are:

Accepted Answer

A) very liquid and carry high risk. 
B) not liquid and carry little risk. 
C) very liquid and carry little risk. 
D) not liquid and carry high risk. 
A) very liquid and carry high risk. 
B) not liquid and carry little risk. 
C) very liquid and carry little risk. 
D) not liquid and carry high risk.

Question 2

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 3

Which of the following situations would cause Acme Company to have an NSF check amount on its bank reconciliation?

Accepted Answer

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

Question 4

If a company has n/90-credit terms,you would expect its Accounts Receivable turnover to be:

Accepted Answer

A) 12. 
B) 4) 
C) 2) 
D) 1) 
A) 12. 
B) 4) 
C) 2) 
D) 1)

Question 5

Receivables of a company CANNOT be long-term assets.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

A promissory note is a verbal promise to pay a specified amount of money on a particular future date.

Accepted Answer

A) True 
 B)False

Question 9

The amount loaned out by the payee is called the maturity value.

Accepted Answer

A) True 
 B)False

Question 10

Using a 365-day year,the maturity value of a 180-day note for $2,700 at 9% annual interest is (rounded to the nearest cent):

Accepted Answer

A) $2,943.00. 
B) $2,821.50. 
C) $2,819.84. 
D) $119.84. 
A) $2,943.00. 
B) $2,821.50. 
C) $2,819.84. 
D) $119.84.

Question 11

A retailer has 3% credit/debit card service fees deducted from the proceeds from each sale.The retailer has $1,700 in credit/debit card sales for the day.The journal entry to record these sales would be to:

Accepted Answer

A) debit sales for $1,700 and credit Cash for $1,700. 
B) debit Cash for $1,700 and credit Sales for $1,700. 
C) debit Cash for $1,649,debit Service Fee Expense for $51;and credit Sales for $1,200. 
D) debit Cash for $1,700,credit Sales for $1,649,and credit Service Fee Expense for $51. 
A) debit sales for $1,700 and credit Cash for $1,700. 
B) debit Cash for $1,700 and credit Sales for $1,700. 
C) debit Cash for $1,649,debit Service Fee Expense for $51;and credit Sales for $1,200. 
D) debit Cash for $1,700,credit Sales for $1,649,and credit Service Fee Expense for $51.

Question 12

A company has $286,000 in credit sales.The company uses the allowance method to account for uncollectible accounts.The Allowance for Doubtful Accounts now has a $2,280 credit balance.If the company estimates that $7,640 of accounts will be uncollectible based on an aging of Accounts Receivable,what will be the amount of the journal entry to record estimated uncollectible accounts?

Accepted Answer

A) $7,640 
B) $9,920 
C) $4,560 
D) $5,360 
A) $7,640 
B) $9,920 
C) $4,560 
D) $5,360

Question 13

A $525 collection on a note from a customer was reflected on Ronaldo Co's bank statement.When doing the bank reconciliation,Ronaldo Co.should:

Accepted Answer

A) add $525 to the bank balance. 
B) subtract $525 from the bank balance. 
C) add $525 to their book balance. 
D) subtract $525 from their book balance. 
A) add $525 to the bank balance. 
B) subtract $525 from the bank balance. 
C) add $525 to their book balance. 
D) subtract $525 from their book balance.

Question 14

The direct write-off method always adheres to the matching principle.

Accepted Answer

A) True 
 B)False

Question 15

Proceeds from credit card and debit card transactions are generally deposited into a business's bank account within:

Accepted Answer

A) one to three days. 
B) three to five days. 
C) a week. 
D) a month. 
A) one to three days. 
B) three to five days. 
C) a week. 
D) a month.

Question 16

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 17

Charmed,Inc.had credit sales for the period of $142,000.The balance in Allowance for Doubtful Accounts is a debit of $643.If Charmed ages Accounts Receivable and determines estimated uncollectible accounts to be $2,840,what is the required journal entry to record estimated uncollectible accounts?

Accepted Answer

A) Debit Bad Debt Expense,$2,840;credit Allowance for Uncollectible Accounts,$2,840. 
B) No entry is required. 
C) Debit Bad Debt Expense,$3,483;credit Allowance for Uncollectible Accounts,$3,483. 
D) Debit Bad Debt Expense,$2,197;credit Allowance for Uncollectible Accounts,$2,197. 
A) Debit Bad Debt Expense,$2,840;credit Allowance for Uncollectible Accounts,$2,840. 
B) No entry is required. 
C) Debit Bad Debt Expense,$3,483;credit Allowance for Uncollectible Accounts,$3,483. 
D) Debit Bad Debt Expense,$2,197;credit Allowance for Uncollectible Accounts,$2,197.

Question 18

Joe is a customer of Hopts,Inc.His current balance due is $1,560.It has been determined that he defaulted on his account.If the company uses the direct write-off method,what entry is necessary to write off the $1,560?

Accepted Answer

A) No entry will be necessary. 
B) Debit Accounts Receivable/Joe;credit Bad Debt Expense. 
C) Debit Bad Debt Expense;credit Accounts Receivable/Joe. 
D) Debit Bad Debt Expense;credit Allowance for Doubtful Accounts. 
A) No entry will be necessary. 
B) Debit Accounts Receivable/Joe;credit Bad Debt Expense. 
C) Debit Bad Debt Expense;credit Accounts Receivable/Joe. 
D) Debit Bad Debt Expense;credit Allowance for Doubtful Accounts.

Question 19

A note is signed on April 15,2013 at 9% for 216 days.The maturity date will be:

Accepted Answer

A) November 15. 
B) November 16. 
C) November 17. 
D) November 18. 
A) November 15. 
B) November 16. 
C) November 17. 
D) November 18.

Question 20

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

Cash equivalents are:

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

Which of the following situations would cause Acme Company to have an NSF check amount on its bank reconciliation?

If a company has n/90-credit terms,you would expect its Accounts Receivable turnover to be:

Receivables of a company CANNOT be long-term assets.

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

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:

A promissory note is a verbal promise to pay a specified amount of money on a particular future date.

The amount loaned out by the payee is called the maturity value.

Using a 365-day year,the maturity value of a 180-day note for $2,700 at 9% annual interest is (rounded to the nearest cent):

A retailer has 3% credit/debit card service fees deducted from the proceeds from each sale.The retailer has $1,700 in credit/debit card sales for the day.The journal entry to record these sales would be to:

A $525 collection on a note from a customer was reflected on Ronaldo Co's bank statement.When doing the bank reconciliation,Ronaldo Co.should:

The direct write-off method always adheres to the matching principle.

Proceeds from credit card and debit card transactions are generally deposited into a business's bank account within:

Which of the following is TRUE?

Charmed,Inc.had credit sales for the period of $142,000.The balance in Allowance for Doubtful Accounts is a debit of $643.If Charmed ages Accounts Receivable and determines estimated uncollectible accounts to be $2,840,what is the required journal entry to record estimated uncollectible accounts?

Joe is a customer of Hopts,Inc.His current balance due is $1,560.It has been determined that he defaulted on his account.If the company uses the direct write-off method,what entry is necessary to write off the $1,560?

A note is signed on April 15,2013 at 9% for 216 days.The maturity date will be:

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.

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

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Exam 7: Cash and Receivables

Cash equivalents are:

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

Which of the following situations would cause Acme Company to have an NSF check amount on its bank reconciliation?

If a company has n/90-credit terms,you would expect its Accounts Receivable turnover to be:

Receivables of a company CANNOT be long-term assets.

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

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:

A promissory note is a verbal promise to pay a specified amount of money on a particular future date.

The amount loaned out by the payee is called the maturity value.

Using a 365-day year,the maturity value of a 180-day note for $2,700 at 9% annual interest is (rounded to the nearest cent):

A retailer has 3% credit/debit card service fees deducted from the proceeds from each sale.The retailer has $1,700 in credit/debit card sales for the day.The journal entry to record these sales would be to:

A $525 collection on a note from a customer was reflected on Ronaldo Co's bank statement.When doing the bank reconciliation,Ronaldo Co.should:

The direct write-off method always adheres to the matching principle.

Proceeds from credit card and debit card transactions are generally deposited into a business's bank account within:

Which of the following is TRUE?

Charmed,Inc.had credit sales for the period of $142,000.The balance in Allowance for Doubtful Accounts is a debit of $643.If Charmed ages Accounts Receivable and determines estimated uncollectible accounts to be $2,840,what is the required journal entry to record estimated uncollectible accounts?

Joe is a customer of Hopts,Inc.His current balance due is $1,560.It has been determined that he defaulted on his account.If the company uses the direct write-off method,what entry is necessary to write off the $1,560?

A note is signed on April 15,2013 at 9% for 216 days.The maturity date will be:

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.

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