Exam 7: The Revenuereceivablescash Cycle

Which of the following is not correct regarding IAS 39,International Accounting Standard 39,"Financial Instruments: Recognition and Measurement," and SFAS No.140,Statement of Financial Accounting Standards No.140,"Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities: A Replacement of FASB Statement No.125"?

In preparing its bank reconciliation for the month of February,Vance Company has available the following information: What is the corrected cash balance at February 28?

Which of the following would NOT be classified as cash?

For the month of December,the records of Former Corporation show the following information: The corporation uses the direct write-off method in accounting for uncollectible accounts receivable.What are the gross sales for the month of December?

A new product introduced by Sunbound Promotions carries a two-year warranty against defects.The estimated warranty costs related to dollar sales are as follows: Sales and actual warranty expenditures for the years ended December 31,2013 and 2014,are as follows: What amount should Sunbound report as its estimated liability as of December 31,2014?

Alonso Company had the following bank reconciliation at March 31: All reconciling items at March 31 cleared through the bank in April.Outstanding checks at April 30 totaled $15,000.What is the amount of cash disbursements per books in April?

Based on its past collection experience,Base Company provides for bad debts at the rate of 2 percent of net credit sales.On January 1,2014,the allowance for doubtful accounts credit balance was $10,000.During 2014,Base wrote off $18,000 of uncollectible receivables and recovered $5,000 on accounts written off in prior years.If net credit sales for 2014 totaled $1,000,000,the doubtful accounts expense for 2014 should be

In preparing the bank reconciliation of Yardley Company for the month of July,the following information is available: What is the correct cash balance at July 31?

The Ryan Manufacturing Company received its bank statement for the month ending May 31.The bank statement indicates a balance of $32,400.The cash account as of the close of business on May 31 has a balance of $8,350.In reconciling the balances,the following items are discovered. (a)Collection by bank of note for $1,500 less collection fees of $250. (b)Deposits in transit,$51,000. (c)The bank charged the depositor $800 for overdrafts. (d)Checks outstanding on May 31,$79,100. (e)A canceled check issued to Kate Corp.for $4,500 was not recorded on Ryan Manufacturing Company's books. Prepare a bank reconciliation statement.(Use the format of reconciling bank and depositor figures to corrected cash balance.)

Windward Corporation's books disclosed the following information for the year ended December 31,2014: Windward's accounts receivable turnover is

Conan Corporation had the following transactions in its first year of operations: What is the cash balance at December 31 of the first year?

The following information was abstracted from the records of the Norrick Corporation: Prepare the adjusting entry for doubtful accounts expense under each of the following assumptions: (1)3 percent of outstanding accounts receivable are uncollectible. (2)1.5 percent of 2014 net sales are uncollectible. (3)An aging schedule of the accounts shows that $21,400 of the accounts are uncollectible.

The plan of organization and all the methods and measures adopted within a business to safeguard its assets,check the accuracy of its accounting data,promote operational efficiency,and encourage adherence to managerial policies is called

If the cash balance shown in a company's accounting records is less than the correct cash balance,and neither the company nor the bank has made any errors,there must be

An analysis and aging of the accounts receivable of Mahi Company at December 31 revealed the following data: The net realizable value of the accounts receivable at December 31 should be

The following information was abstracted from the 2014 financial statements of Keller Company: Prepare the adjusting entry for doubtful accounts expense under each of the following assumptions: (1)4 percent of current accounts receivable are uncollectible. (2)2.5 percent of net credit sales are uncollectible.

Corbin Company has two checking accounts.A special account is used for the weekly payroll only,and the general account is used for all other disbursements.Every week,a check in the amount of the net payroll is drawn on the general account and deposited in the payroll account.The company maintains a $5,000 minimum balance in the payroll account.On a monthly bank reconciliation,the payroll account should

The following information is available for Closer Company relative to 2014 operations: What is Closer Company's accounts receivable balance at December 31,2014?

Cash,the most liquid of all assets,must be safeguarded.Cash can be easily concealed and transported,bears no marks of ownership,and is universally valued and accepted.Risk of theft of cash is directly correlated to the accessibility of cash and cash records.Businesses address these problems through a system of internal control. Required: 1.Discuss generally what a system of internal control is designed to accomplish and identify general controls over cash that should be implemented. 2.Identify internal control procedures for cash receipts. 3.Identify internal control procedures for cash disbursements.

The August 31 bank statement of Mervin Inc.showed a balance of $113,000.Deducted in arriving at this amount was a customer's NSF check for $2,400 that had been returned.Mervin had received no prior notice concerning this check.In addition to the bank statement,other records showed there were deposits in transit totaling $17,200 and that outstanding checks totaled $10,800.What is the cash balance per books at August 31 (prior to adjustments)?