Question 1

The materiality principle allows companies with low amounts of uncollectible accounts to use the direct write-off method.

Accepted Answer

A) True 
 B)False

Question 2

Lionworks Company has cash of $143,000;net Accounts Receivable of $89,000;short-term investments of $35,000 and prepaid expenses of $40,000.It also has $50,000 in current liabilities and $80,000 in long-term liabilities.The current ratio for Lionworks Company is:

Accepted Answer

A) 5)44. 
B) 6)14. 
C) 5)34. 
D) 4)64. 
A) 5)44. 
B) 6)14. 
C) 5)34. 
D) 4)64.

Question 3

Valdez Company reported sales of $343,000;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) 106. 
B) 79. 
C) 118. 
D) 95. 
A) 106. 
B) 79. 
C) 118. 
D) 95.

Question 4

Piper Inc.has cash of $56,000;net Accounts Receivable of $67,000;short-term investments of $12,000 and inventory of $40,000.It also has $45,000 in current liabilities and $75,000 in long-term liabilities.The quick ratio for Piper Inc.is:

Accepted Answer

A) 2)33. 
B) 2)73. 
C) 3)00. 
D) 3)89. 
A) 2)33. 
B) 2)73. 
C) 3)00. 
D) 3)89.

Question 5

Quicksilver Co.has cash of $33,000;net Accounts Receivable of $41,000;short-term investments of $15,000 and inventory of $25,000.It also has $30,000 in current liabilities and $50,000 in long-term liabilities.The quick ratio for Quicksilver Co.is:

Accepted Answer

A) 1)78. 
B) 2)97. 
C) 3)30. 
D) 3)80. 
A) 1)78. 
B) 2)97. 
C) 3)30. 
D) 3)80.

Question 6

The payee of a note is also called the creditor.

Accepted Answer

A) True 
 B)False

Question 7

Streamlined payment procedures now involve the use of electronic data interchange and electronic funds transfer between and among suppliers and merchandisers.

Accepted Answer

A) True 
 B)False

Question 8

If possible,the bank reconciler should have no other duties relating to cash transactions in the business.

Accepted Answer

A) True 
 B)False

Question 9

The account receivable turnover is computed by taking the average net Accounts Receivable and dividing it by the net credit sales.

Accepted Answer

A) True 
 B)False

Question 10

DogCo has a petty cash fund of $275.At the end of the month,$14.37 remains in the fund along with $269.43 in various receipts.The journal entry to replenish the fund would be to:

Accepted Answer

A) debit various expenses,$269.43;debit Cash Short for $8.80 and credit Cash for $278.23. 
B) debit various expenses,$269.43;credit Cash Over for $8.80 and credit Cash for $260.63. 
C) debit Petty Cash for $260.63 and credit Cash for $260.63. 
D) debit various expenses,$269.43 and credit Cash for $269.43. 
A) debit various expenses,$269.43;debit Cash Short for $8.80 and credit Cash for $278.23. 
B) debit various expenses,$269.43;credit Cash Over for $8.80 and credit Cash for $260.63. 
C) debit Petty Cash for $260.63 and credit Cash for $260.63. 
D) debit various expenses,$269.43 and credit Cash for $269.43.

Question 11

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

Accepted Answer

A) deface 
B) sign 
C) file 
D) throw away 
A) deface 
B) sign 
C) file 
D) throw away

Question 12

The simplest way to account for an uncollectible account is to use the allowance method.

Accepted Answer

A) True 
 B)False

Question 13

When using the allowance method for uncollectible accounts,the aging method is called the:

Accepted Answer

A) Balance Sheet approach. 
B) Income Statement approach. 
C) allowance approach. 
D) direct write-off approach. 
A) Balance Sheet approach. 
B) Income Statement approach. 
C) allowance approach. 
D) direct write-off approach.

Question 14

A company may have receivables such as loans to employees and interest receivable.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

On September 1,2013,Sharp Corp.lent $2,400 to Marla Smith on a 6-month 8% promissory note.The journal entry to record the note for Sharp Corp.would be to:

Accepted Answer

A) debit Note Receivable/M Smith,$2,400;credit Cash,$2,400. 
B) debit Note Receivable/M Smith,$2,496;credit Cash,$2,496. 
C) debit Note Receivable/M Smith,$96;credit Interest Income,$96. 
D) debit Cash,$2,400;credit Note Payable/M Smith,$2,400. 
A) debit Note Receivable/M Smith,$2,400;credit Cash,$2,400. 
B) debit Note Receivable/M Smith,$2,496;credit Cash,$2,496. 
C) debit Note Receivable/M Smith,$96;credit Interest Income,$96. 
D) debit Cash,$2,400;credit Note Payable/M Smith,$2,400.

Question 17

Allied Inc.has an Account Receivable balance of $24,500 and its Allowance for Uncollectible Accounts balance is $1,250.How will this be reported on the Balance Sheet?

Accepted Answer

A) Accounts Receivable 24,500
Less: Allowance for Uncollectible Accounts 250
Accounts Receivable,Net $23,250 
B) Accounts Receivable $23,250 
C) Accounts Receivable,Net of Allowance for Uncollectible Accounts of $1,250 $23,250 
D) Both A and C are acceptable ways to report Accounts Receivable. 
A) Accounts Receivable 24,500
Less: Allowance for Uncollectible Accounts 250
Accounts Receivable,Net $23,250 
B) Accounts Receivable $23,250 
C) Accounts Receivable,Net of Allowance for Uncollectible Accounts of $1,250 $23,250 
D) Both A and C are acceptable ways to report Accounts Receivable.

Question 18

Each cash account is listed separately on the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 19

The processing of credit card and debit card transactions is generally done:

Accepted Answer

A) at the retail site. 
B) at the financial institution of the retailer. 
C) by third parties hired to do the processing. 
D) over the Internet. 
A) at the retail site. 
B) at the financial institution of the retailer. 
C) by third parties hired to do the processing. 
D) over the Internet.

Question 20

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 estimates that 2% of credit sales will be uncollectible,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.

The materiality principle allows companies with low amounts of uncollectible accounts to use the direct write-off method.

Lionworks Company has cash of $143,000;net Accounts Receivable of $89,000;short-term investments of $35,000 and prepaid expenses of $40,000.It also has $50,000 in current liabilities and $80,000 in long-term liabilities.The current ratio for Lionworks Company is:

Valdez Company reported sales of $343,000;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:

Piper Inc.has cash of $56,000;net Accounts Receivable of $67,000;short-term investments of $12,000 and inventory of $40,000.It also has $45,000 in current liabilities and $75,000 in long-term liabilities.The quick ratio for Piper Inc.is:

Quicksilver Co.has cash of $33,000;net Accounts Receivable of $41,000;short-term investments of $15,000 and inventory of $25,000.It also has $30,000 in current liabilities and $50,000 in long-term liabilities.The quick ratio for Quicksilver Co.is:

The payee of a note is also called the creditor.

Streamlined payment procedures now involve the use of electronic data interchange and electronic funds transfer between and among suppliers and merchandisers.

If possible,the bank reconciler should have no other duties relating to cash transactions in the business.

The account receivable turnover is computed by taking the average net Accounts Receivable and dividing it by the net credit sales.

DogCo has a petty cash fund of $275.At the end of the month,$14.37 remains in the fund along with $269.43 in various receipts.The journal entry to replenish the fund would be to:

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

The simplest way to account for an uncollectible account is to use the allowance method.

When using the allowance method for uncollectible accounts,the aging method is called the:

A company may have receivables such as loans to employees and interest receivable.

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

On September 1,2013,Sharp Corp.lent $2,400 to Marla Smith on a 6-month 8% promissory note.The journal entry to record the note for Sharp Corp.would be to:

Allied Inc.has an Account Receivable balance of $24,500 and its Allowance for Uncollectible Accounts balance is $1,250.How will this be reported on the Balance Sheet?

Each cash account is listed separately on the Balance Sheet.

The processing of credit card and debit card transactions is generally done:

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 estimates that 2% of credit sales will be uncollectible,what is the required journal entry to record estimated uncollectible accounts?

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

The materiality principle allows companies with low amounts of uncollectible accounts to use the direct write-off method.

Lionworks Company has cash of $143,000;net Accounts Receivable of $89,000;short-term investments of $35,000 and prepaid expenses of $40,000.It also has $50,000 in current liabilities and $80,000 in long-term liabilities.The current ratio for Lionworks Company is:

Valdez Company reported sales of $343,000;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:

Piper Inc.has cash of $56,000;net Accounts Receivable of $67,000;short-term investments of $12,000 and inventory of $40,000.It also has $45,000 in current liabilities and $75,000 in long-term liabilities.The quick ratio for Piper Inc.is:

Quicksilver Co.has cash of $33,000;net Accounts Receivable of $41,000;short-term investments of $15,000 and inventory of $25,000.It also has $30,000 in current liabilities and $50,000 in long-term liabilities.The quick ratio for Quicksilver Co.is:

The payee of a note is also called the creditor.

Streamlined payment procedures now involve the use of electronic data interchange and electronic funds transfer between and among suppliers and merchandisers.

If possible,the bank reconciler should have no other duties relating to cash transactions in the business.

The account receivable turnover is computed by taking the average net Accounts Receivable and dividing it by the net credit sales.

DogCo has a petty cash fund of $275.At the end of the month,$14.37 remains in the fund along with $269.43 in various receipts.The journal entry to replenish the fund would be to:

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

The simplest way to account for an uncollectible account is to use the allowance method.

When using the allowance method for uncollectible accounts,the aging method is called the:

A company may have receivables such as loans to employees and interest receivable.

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

On September 1,2013,Sharp Corp.lent $2,400 to Marla Smith on a 6-month 8% promissory note.The journal entry to record the note for Sharp Corp.would be to:

Allied Inc.has an Account Receivable balance of $24,500 and its Allowance for Uncollectible Accounts balance is $1,250.How will this be reported on the Balance Sheet?

Each cash account is listed separately on the Balance Sheet.

The processing of credit card and debit card transactions is generally done:

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 estimates that 2% of credit sales will be uncollectible,what is the required journal entry to record estimated uncollectible accounts?

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