Question 1

The allowance for uncollectible accounts is similar to accumulated depreciation in that it represents the total of all accounts written off over the years.

Accepted Answer

A) True 
 B)False

Question 2

Because bad debt losses are incurred to generate sales,they should be charged against the sales that they helped generate.

Accepted Answer

A) True 
 B)False

Question 3

Cash equivalents are categorized as cash on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

On a bank reconciliation,interest earned on a checking account should be

Accepted Answer

A)  deducted from the balance per books. 
B)  added to the balance per books. 
C)  added to the balance per bank. 
D)  deducted from the balance per bank. 
A)  deducted from the balance per books. 
B)  added to the balance per books. 
C)  added to the balance per bank. 
D)  deducted from the balance per bank.

Question 5

The Allowance for Uncollectible Accounts is a contra-asset account.

Accepted Answer

A) True 
 B)False

Question 6

The direct charge-off method makes an attempt to match bad-debt losses with revenues.

Accepted Answer

A) True 
 B)False

Question 7

An example of a cash equivalent is

Accepted Answer

A)  a 120-day time deposit. 
B)  notes receivable. 
C)  accounts receivable. 
D)  a 60-day certificate of deposit. 
A)  a 120-day time deposit. 
B)  notes receivable. 
C)  accounts receivable. 
D)  a 60-day certificate of deposit.

Question 8

The matching rule

Accepted Answer

A)  results in the recording of a known amount for bad-debt losses. 
B)  necessitates the recording of an estimated amount for bad debts. 
C)  requires that all bad-debt losses be recorded when an individual customer defaults. 
D)  is violated when the allowance method is employed. 
A)  results in the recording of a known amount for bad-debt losses. 
B)  necessitates the recording of an estimated amount for bad debts. 
C)  requires that all bad-debt losses be recorded when an individual customer defaults. 
D)  is violated when the allowance method is employed.

Question 9

On a balance sheet,what items normally are included in Cash?

Accepted Answer

The items normally included in

Question 10

Use this information to answer the following question.
The general ledger account for Accounts Receivable shows a debit balance of $100,000.Allowance for Uncollectible Accounts has a credit balance of $2,000.Net sales for the year were $930,000.In the past,2 percent of sales have proved uncollectible,and an aging of accounts receivable accounts results in an estimate of $27,000 of uncollectible accounts.
Using the percentage of net sales method,the Allowance for Uncollectible Accounts balance (after adjustment)would be

Accepted Answer

A) $16,600. 
B) $18,600. 
C) $20,600. 
D) $2,000. 
A) $16,600. 
B) $18,600. 
C) $20,600. 
D) $2,000.

Question 11

The matching rule relates to credit losses by stating that Uncollectible Accounts Expense should be recorded

Accepted Answer

A)  in the period of the loss. 
B)  for an exact amount. 
C)  in the same period as allowed for tax purposes. 
D)  in the period of the sale. 
A)  in the period of the loss. 
B)  for an exact amount. 
C)  in the same period as allowed for tax purposes. 
D)  in the period of the sale.

Question 12

Compensating balances are kept as part of the Cash account balance on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

An NSF check should appear in which section of the bank reconciliation?

Accepted Answer

A)  Deduction from the balance per books 
B)  Deduction from the balance per bank 
C)  Addition to the balance per books 
D)  Addition to the balance per bank 
A)  Deduction from the balance per books 
B)  Deduction from the balance per bank 
C)  Addition to the balance per books 
D)  Addition to the balance per bank

Question 14

Interest on a 90-day,10 percent,$30,000 note receivable is

Accepted Answer

A)  $7,502.31. 
B)  $865.14. 
C)  $739.73. 
D)  $3,001.89. 
A)  $7,502.31. 
B)  $865.14. 
C)  $739.73. 
D)  $3,001.89.

Question 15

A compensating balance refers to a minimum amount that must remain in a bank account as part of a credit-granting arrangement.

Accepted Answer

A) True 
 B)False

Question 16

The use of electronic funds transfers makes check writing necessary.

Accepted Answer

A) True 
 B)False

Question 17

Automated teller machines (ATMs)are used primarily by consumers rather than by businesses.

Accepted Answer

A) True 
 B)False

Question 18

A check written for $354 is incorrectly recorded by a company as $534.On the bank reconciliation the $180 error should be

Accepted Answer

A)  deducted from the balance per books. 
B)  added to the balance per bank. 
C)  deducted from the balance per bank. 
D)  added to the balance per books. 
A)  deducted from the balance per books. 
B)  added to the balance per bank. 
C)  deducted from the balance per bank. 
D)  added to the balance per books.

Question 19

A promissory note may be issued for an amount to be determined at a future date.

Accepted Answer

A) True 
 B)False

Question 20

A note receivable dated May 23 and due in 90 days would be due on

Accepted Answer

A)  August 20. 
B)  August 21. 
C)  August 23. 
D)  August 22. 
A)  August 20. 
B)  August 21. 
C)  August 23. 
D)  August 22.

The allowance for uncollectible accounts is similar to accumulated depreciation in that it represents the total of all accounts written off over the years.

Because bad debt losses are incurred to generate sales,they should be charged against the sales that they helped generate.

Cash equivalents are categorized as cash on the balance sheet.

On a bank reconciliation,interest earned on a checking account should be

The Allowance for Uncollectible Accounts is a contra-asset account.

The direct charge-off method makes an attempt to match bad-debt losses with revenues.

An example of a cash equivalent is

The matching rule

On a balance sheet,what items normally are included in Cash?

The matching rule relates to credit losses by stating that Uncollectible Accounts Expense should be recorded

Compensating balances are kept as part of the Cash account balance on the balance sheet.

An NSF check should appear in which section of the bank reconciliation?

Interest on a 90-day,10 percent,$30,000 note receivable is

A compensating balance refers to a minimum amount that must remain in a bank account as part of a credit-granting arrangement.

The use of electronic funds transfers makes check writing necessary.

Automated teller machines (ATMs)are used primarily by consumers rather than by businesses.

A check written for $354 is incorrectly recorded by a company as $534.On the bank reconciliation the $180 error should be

A promissory note may be issued for an amount to be determined at a future date.

A note receivable dated May 23 and due in 90 days would be due on

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 8: Cash and Receivables

The allowance for uncollectible accounts is similar to accumulated depreciation in that it represents the total of all accounts written off over the years.

Because bad debt losses are incurred to generate sales,they should be charged against the sales that they helped generate.

Cash equivalents are categorized as cash on the balance sheet.

On a bank reconciliation,interest earned on a checking account should be

The Allowance for Uncollectible Accounts is a contra-asset account.

The direct charge-off method makes an attempt to match bad-debt losses with revenues.

An example of a cash equivalent is

The matching rule

On a balance sheet,what items normally are included in Cash?

The matching rule relates to credit losses by stating that Uncollectible Accounts Expense should be recorded

Compensating balances are kept as part of the Cash account balance on the balance sheet.

An NSF check should appear in which section of the bank reconciliation?

Interest on a 90-day,10 percent,$30,000 note receivable is

A compensating balance refers to a minimum amount that must remain in a bank account as part of a credit-granting arrangement.

The use of electronic funds transfers makes check writing necessary.

Automated teller machines (ATMs)are used primarily by consumers rather than by businesses.

A check written for $354 is incorrectly recorded by a company as $534.On the bank reconciliation the $180 error should be

A promissory note may be issued for an amount to be determined at a future date.

A note receivable dated May 23 and due in 90 days would be due on

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters