Question 1

The Ace Electronics has weekly staff meetings to discuss customer complaints.This is an internal control ________.

Accepted Answer

A) strength 
B) weakness 
C) regulation 
D) law 
A) strength 
B) weakness 
C) regulation 
D) law

Question 2

Which of the following methods of accounting for uncollectible accounts matches sales with bad debts expense?

Accepted Answer

A) direct write-off method 
B) allowance method 
C) contra-asset method 
D) reconciliation method 
A) direct write-off method 
B) allowance method 
C) contra-asset method 
D) reconciliation method

Question 3

Bad debts expense appears on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

Magic Cow Co.made a sale for $5,000 to a customer who paid with MasterCard.MasterCard charges Magic Cow a fee of 3% of sales.MasterCard will directly deposit the cash from this sale within 24 hours.How much cash will MasterCard deposit?

Accepted Answer

A) $5,000 
B) $4,850 
C) $150 
D) $5,150 
A) $5,000 
B) $4,850 
C) $150 
D) $5,150

Question 5

An effective system of internal controls includes clear assignment of responsibility,specific procedures for documentation related to assets,and independent internal verification of data.

Accepted Answer

A) True 
 B)False

Question 6

In 2011,Team Shirts had an average of $27,000 in net accounts receivables and sales were $89,100.Therefore,the accounts receivable turnover was 3.3.

Accepted Answer

A) True 
 B)False

Question 7

Part A: Use the following information to complete the May bank reconciliation for AceCo:
     Part B: What amount will AceCo show for cash on its May 31 balance sheet?
Part C: For which item(s)must AceCo prepare an adjusting entry?

Accepted Answer

Part A:
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P

Question 8

Lee's Lions had a balance of a positive $200 in its Allowance for uncollectible accounts.Based on an aging of accounts receivable,management estimates that the Allowance for uncollectible accounts balance should be $(2,000).Bad debts expense should be ________.

Accepted Answer

A) $1,600 
B) $1,800 
C) $2,000 
D) $2,200 
A) $1,600 
B) $1,800 
C) $2,000 
D) $2,200

Question 9

Sally has a new VISA card that was issued by MBNA (Maryland Bank of North America).Sally used her VISA card to buy five kegs of beer at Crock'n' Keg.Three months later,Sally still has not paid her VISA bill.Which company carries the account receivable from this sale?

Accepted Answer

A) MBNA 
B) Sally 
C) Crock'n' Keg 
D) both Sally and Crock'n' Keg 
A) MBNA 
B) Sally 
C) Crock'n' Keg 
D) both Sally and Crock'n' Keg

Question 10

The balance sheet account used to report the amount of accounts receivable that a company does not expect to collect is called ________.

Accepted Answer

A) net accounts receivable 
B) allowance for uncollectible accounts 
C) uncollectible accounts expense 
D) bad debts expense 
A) net accounts receivable 
B) allowance for uncollectible accounts 
C) uncollectible accounts expense 
D) bad debts expense

Question 11

Team Instructions: Divide the class into teams of three or four people.Each team member should work the following problem separately outside of class.Then give the students time in class to compare answers with their teammates and put together a final correct copy of the problem.Each team should turn in only one copy of the problem for grading,along with the annual report that they used.All team members will receive the same grade.
Provide students with copies of real merchandising companies' annual reports,or give students the Web addresses of real merchandising companies and ask them to print out the annual reports.All team members should work with the same company's annual report.
Answer the following questions using the annual report assigned to your team:

Accepted Answer

The answer of Team Instructions: Divide the class into teams...

Question 12

In preparing a bank reconciliation,outstanding checks are added to the balance per books.

Accepted Answer

A) True 
 B)False

Question 13

Z Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments:   The company estimates that 2% of net sales will be uncollectible.After the correct adjusting entry has been made,bad debts expense for the year will be:

Accepted Answer

A) $4,000. 
B) $1,000. 
C) $3,000. 
D) $5,000. 
A) $4,000. 
B) $1,000. 
C) $3,000. 
D) $5,000.

Question 14

What is the effect of the adjusting entry for bad debts expense on the Balance sheet?

Accepted Answer

A) an increase in Total shareholders' equity 
B) an increase in Total assets 
C) a decrease in Total liabilities 
D) a decrease in Total assets 
A) an increase in Total shareholders' equity 
B) an increase in Total assets 
C) a decrease in Total liabilities 
D) a decrease in Total assets

Question 15

C.D.Lee was preparing the monthly bank reconciliation for WhackCo when he noticed the bank made an error in the company's favor.How should the error appear on the bank reconciliation? Discuss the ethical issue of not reporting this error to the bank.

Accepted Answer

The error should be deducted f

Question 16

Z Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments:   The company estimates that 2% of net sales will be uncollectible.After the correct adjusting entry has been made,what is the net accounts receivable on the year-end balance sheet?

Accepted Answer

A) This is a trick question.Accounts receivable appear on the income statement,not the balance sheet. 
B) $46,000 
C) $45,000 
D) $44,000 
A) This is a trick question.Accounts receivable appear on the income statement,not the balance sheet. 
B) $46,000 
C) $45,000 
D) $44,000

Question 17

Which of these is a cash equivalent?

Accepted Answer

A) U)S.treasury bills that mature in three months or less 
B) a note receivable that matures in six months 
C) a note payable due in three months or less 
D) accounts receivable due in three months or less 
A) U)S.treasury bills that mature in three months or less 
B) a note receivable that matures in six months 
C) a note payable due in three months or less 
D) accounts receivable due in three months or less

Question 18

What is the purpose of a bank reconciliation?

Accepted Answer

The purpose of a bank reconciliation is

Question 19

Y Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments:   The company estimates that 20% of accounts receivable will be uncollectible.After the correct adjusting entry has been made,bad debts expense for the year will be:

Accepted Answer

A) $5,100. 
B) $5,700. 
C) $5,400. 
D) $20,300. 
A) $5,100. 
B) $5,700. 
C) $5,400. 
D) $20,300.

Question 20

Cash equivalents are found on the ________.

Accepted Answer

A) Income statement 
B) Statement of financial position 
C) Statement of changes in shareholders' equity 
D) Statement of operations 
A) Income statement 
B) Statement of financial position 
C) Statement of changes in shareholders' equity 
D) Statement of operations

The Ace Electronics has weekly staff meetings to discuss customer complaints.This is an internal control ________.

Which of the following methods of accounting for uncollectible accounts matches sales with bad debts expense?

Bad debts expense appears on the balance sheet.

Magic Cow Co.made a sale for $5,000 to a customer who paid with MasterCard.MasterCard charges Magic Cow a fee of 3% of sales.MasterCard will directly deposit the cash from this sale within 24 hours.How much cash will MasterCard deposit?

An effective system of internal controls includes clear assignment of responsibility,specific procedures for documentation related to assets,and independent internal verification of data.

In 2011,Team Shirts had an average of $27,000 in net accounts receivables and sales were $89,100.Therefore,the accounts receivable turnover was 3.3.

Part A: Use the following information to complete the May bank reconciliation for AceCo: Part B: What amount will AceCo show for cash on its May 31 balance sheet? Part C: For which item(s)must AceCo prepare an adjusting entry?

Lee's Lions had a balance of a positive $200 in its Allowance for uncollectible accounts.Based on an aging of accounts receivable,management estimates that the Allowance for uncollectible accounts balance should be $(2,000).Bad debts expense should be ________.

Sally has a new VISA card that was issued by MBNA (Maryland Bank of North America).Sally used her VISA card to buy five kegs of beer at Crock'n' Keg.Three months later,Sally still has not paid her VISA bill.Which company carries the account receivable from this sale?

The balance sheet account used to report the amount of accounts receivable that a company does not expect to collect is called ________.

In preparing a bank reconciliation,outstanding checks are added to the balance per books.

Z Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments: The company estimates that 2% of net sales will be uncollectible.After the correct adjusting entry has been made,bad debts expense for the year will be:

What is the effect of the adjusting entry for bad debts expense on the Balance sheet?

C.D.Lee was preparing the monthly bank reconciliation for WhackCo when he noticed the bank made an error in the company's favor.How should the error appear on the bank reconciliation? Discuss the ethical issue of not reporting this error to the bank.

Which of these is a cash equivalent?

What is the purpose of a bank reconciliation?

Y Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments: The company estimates that 20% of accounts receivable will be uncollectible.After the correct adjusting entry has been made,bad debts expense for the year will be:

Cash equivalents are found on the ________.

Business: Whats It All About

Qualities of Accounting Information

Accruals and Deferrals: Timing Is Everything in Accounting

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Liabilities

Accounting for Shareholders Equity

Preparing and Analyzing the Statement of Cash Flows

Using Financial Statement Analysis to Evaluate Firm Performance

Quality of Earnings, corporate Governance, and Ifrs

Filters

Exam 4: Payment for Goods and Services: Cash and Accounts Receivable

The Ace Electronics has weekly staff meetings to discuss customer complaints.This is an internal control ________.

Which of the following methods of accounting for uncollectible accounts matches sales with bad debts expense?

Bad debts expense appears on the balance sheet.

Magic Cow Co.made a sale for $5,000 to a customer who paid with MasterCard.MasterCard charges Magic Cow a fee of 3% of sales.MasterCard will directly deposit the cash from this sale within 24 hours.How much cash will MasterCard deposit?

An effective system of internal controls includes clear assignment of responsibility,specific procedures for documentation related to assets,and independent internal verification of data.

In 2011,Team Shirts had an average of $27,000 in net accounts receivables and sales were $89,100.Therefore,the accounts receivable turnover was 3.3.

Part A: Use the following information to complete the May bank reconciliation for AceCo: Part B: What amount will AceCo show for cash on its May 31 balance sheet? Part C: For which item(s)must AceCo prepare an adjusting entry?

Lee's Lions had a balance of a positive $200 in its Allowance for uncollectible accounts.Based on an aging of accounts receivable,management estimates that the Allowance for uncollectible accounts balance should be $(2,000).Bad debts expense should be ________.

Sally has a new VISA card that was issued by MBNA (Maryland Bank of North America).Sally used her VISA card to buy five kegs of beer at Crock'n' Keg.Three months later,Sally still has not paid her VISA bill.Which company carries the account receivable from this sale?

The balance sheet account used to report the amount of accounts receivable that a company does not expect to collect is called ________.

In preparing a bank reconciliation,outstanding checks are added to the balance per books.

Z Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments: The company estimates that 2% of net sales will be uncollectible.After the correct adjusting entry has been made,bad debts expense for the year will be:

What is the effect of the adjusting entry for bad debts expense on the Balance sheet?

C.D.Lee was preparing the monthly bank reconciliation for WhackCo when he noticed the bank made an error in the company's favor.How should the error appear on the bank reconciliation? Discuss the ethical issue of not reporting this error to the bank.

Which of these is a cash equivalent?

What is the purpose of a bank reconciliation?

Cash equivalents are found on the ________.

Business: Whats It All About

Qualities of Accounting Information

Accruals and Deferrals: Timing Is Everything in Accounting

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Liabilities

Accounting for Shareholders Equity

Preparing and Analyzing the Statement of Cash Flows

Using Financial Statement Analysis to Evaluate Firm Performance

Quality of Earnings, corporate Governance, and Ifrs

Filters