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 $817.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 5% of credit sales will be uncollectible?

A company has $314,000 in credit sales.The company uses the allowance method to account for uncollectible accounts.The Allowance for Doubtful Accounts now has a $1,890 debit balance.If the company estimates that $8,160 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?

Companies who sell on account expect:

Accounts Receivable are more formal and usually longer in terms than notes receivable.

Ninety-day U.S.Treasury notes are considered cash equivalents.

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

Which of the following would NOT be considered cash?

An example of good internal control over Accounts Receivable is:

Accounts Receivable should be reported at ________ in the ________ section of a company's Balance Sheet.

The journal entry to write off a customer's account under the direct write-off method is:

On March 15,Diego paid $4,750 to Island,Inc.to fulfill his promissory note agreement.Of the $4,750,$750 is interest.The journal entry Island,Inc.will record is to:

Which of the following would be considered a cash equivalent?

A bank statement shows the:

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:

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

Island Equipment has a petty cash fund of $350.At the end of the month,$7.89 remains in the fund along with $340.56 in various receipts.The journal entry to replenish the fund would show a debit(s)to:

Gallego & Co.reported sales of $515,000;beginning net Accounts Receivable of $212,000 and ending net Accounts Receivable of $224,000.Gallego & Co.'s Accounts Receivable turnover is:

A 77-day note dated March 3,2010 will be due on May 20.

In a bank reconciliation,the bank balance and the book balance must be adjusted to be reconciled.

Interest rates are almost always stated for a period of one month.