Question 1

Books,Inc.always balances its checkbook before it pays the month's bills.This is an internal control ________.

Accepted Answer

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

Question 2

Accounts receivable are ________.

Accepted Answer

A) current assets 
B) current liabilities 
C) long-term assets 
D) long-term liabilities 
A) current assets 
B) current liabilities 
C) long-term assets 
D) long-term liabilities

Question 3

Notes receivable usually have a collection period that is longer than accounts receivable.

Accepted Answer

A) True 
 B)False

Question 4

Team Shirts' receivables turnover was 12 times per year.The retail industry average for receivables turnover is 13 times per year.

Accepted Answer

A) Team Shirts should improve its turnover to meet the industry standard. 
B) Team Shirts' turnover is better than the industry standard. 
C) Team Shirts is able to turn its receivables into cash more quickly than its competitors in the industry. 
D) Team Shirts' average days to collect the receivables were greater than the retail industry average. 
A) Team Shirts should improve its turnover to meet the industry standard. 
B) Team Shirts' turnover is better than the industry standard. 
C) Team Shirts is able to turn its receivables into cash more quickly than its competitors in the industry. 
D) Team Shirts' average days to collect the receivables were greater than the retail industry average.

Question 5

The direct write-off method and the allowance method are methods used to adjust the balance in accounts receivable to reflect uncollectible accounts.

Accepted Answer

A) True 
 B)False

Question 6

Cash is an asset that must be safeguarded because ________.

Accepted Answer

A) cash is easy to conceal 
B) ownership is difficult to prove 
C) cash can be a significant risk to business 
D) All of these are correct. 
A) cash is easy to conceal 
B) ownership is difficult to prove 
C) cash can be a significant risk to business 
D) All of these are correct.

Question 7

Lee's Lions has made a profit in each of the last two months.However,it is not generating enough cash from credit sales to cover all of its current expenses.The owners understand the value of increasing sales volume by offering customers the ability to purchase on credit,but they are frustrated by the current situation.Explain to them the issues in granting credit and the management of accounts receivable.

Accepted Answer

Businesses try to increase overall sales

Question 8

The accounting records for Quality Auto Parts show that the cash account should have a balance of $78,500.However,a hand count showed only $76,980.The missing amount cannot be found.A review of cash procedures revealed that each cashier draws money for his/her register cash drawer from the safe at the start of each shift.At the end of each day the manager counts the cash,fills out the deposit slip,and deposits the money in the bank on his way home.Evaluate the situation and give the owners of Quality Auto Parts some advice on proper procedures for control of cash.

Accepted Answer

The owners of Quality Auto Parts should

Question 9

Part A: Use the following information to complete the June bank reconciliation for ArcCo:

Part B: What amount will ArcCo show for cash on its June 30 balance sheet?
Part C: For which item(s)must ArcCo prepare an adjusting entry?

Accepted Answer

Part A:
@#IMG-DLM&
Part B: $8,

Question 10

Put an X in the appropriate box to show how each of these items would appear on a company's bank reconciliation.Put an asterisk (*)next to the items for which the company must record an adjusting entry:

Accepted Answer

The answer of Put an X in the appropriate box...

Question 11

Midway Company had a balance of $(500)in its allowance for uncollectible accounts.Aging of its accounts receivable revealed that the allowance should be $(1,400).The amount of bad debts expense for the period should be ________.

Accepted Answer

A) $500 
B) $900 
C) $1,400 
D) $1,900 
A) $500 
B) $900 
C) $1,400 
D) $1,900

Question 12

Airy,Inc.began business January 1,2011.Show the effect of the following 2011 events on the accounting equation:
Part A:   Write in the amount (even if $0)as of or for the Year Ended December 31,2011,AND the name of the financial statement where the line item is found.   Part B:
Continuing from Part A,show the effect on the accounting equation of the 2012 events for Airy,Inc.:   Write in the amount (even if $0)as of or for the Year Ended December 31,2012,AND the name of the financial statement where the line item is found.

Accepted Answer

Part A: @#IMG-DLM&_T

Question 13

Since C.D.Lee's bonus is tied to net income,he decided to underestimate the bad debts expense for the year ended December 31,2012.Which 2012 financial statements will be impacted by this underestimate of bad debts expense? Since bad debts expense is just an estimate,is this treatment ethical?

Accepted Answer

The income statement (bad debts expense

Question 14

Answer the following questions using the information obtained from one of X,Inc.'s financial statements:
 
a.On which financial statement is the above information found?
b.What is meant by cash equivalents?
c.Where could you look in the annual report to find more information about cash equivalents?
d.Does X,Inc.have significant credit sales? How can you tell?
e.Where could you look in the annual report to find more information about the receivables from insurance companies?
f.Did the receivables from insurance companies result from sales to insurance companies?

Accepted Answer

a.Balance sheet
b.Cash equivalents are h

Question 15

Preparing a bank reconciliation enables a company to ________.

Accepted Answer

A) locate any errors,whether made by the bank or by the company 
B) make adjustments for transactions that have already been recorded in the accounting records 
C) make adjustments in the cash accounts 
D) update the bank statements 
A) locate any errors,whether made by the bank or by the company 
B) make adjustments for transactions that have already been recorded in the accounting records 
C) make adjustments in the cash accounts 
D) update the bank statements

Question 16

The daily bank deposit is made by whoever is going to lunch near the bank.This is an internal control ________.

Accepted Answer

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

Question 17

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,the allowance for uncollectible accounts will be:

Accepted Answer

A) $(4,100). 
B) $(3,900). 
C) $(4,000). 
D) $(1,100). 
A) $(4,100). 
B) $(3,900). 
C) $(4,000). 
D) $(1,100).

Question 18

MasterCard charges Team Shirts 4% of sales.On June 15,Team Shirts sold $4,000 worth of
T-shirts on MasterCard accounts.Team Shirts paid a fee of $174.40 to MasterCard.

Accepted Answer

A) True 
 B)False

Question 19

Sales for December for Team Shirts were $36,000.The average net accounts receivable was $1,425.The accounts receivable turnover was ________.

Accepted Answer

A) 4% 
B) 9.83 times 
C) 25.26 times 
D) 14.5 days 
A) 4% 
B) 9.83 times 
C) 25.26 times 
D) 14.5 days

Question 20

The accountant found that four outstanding checks worth a total of $990 were not on the bank statement.On the bank reconciliation,this amount should be ________.

Accepted Answer

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

Books,Inc.always balances its checkbook before it pays the month's bills.This is an internal control ________.

Accounts receivable are ________.

Notes receivable usually have a collection period that is longer than accounts receivable.

Team Shirts' receivables turnover was 12 times per year.The retail industry average for receivables turnover is 13 times per year.

The direct write-off method and the allowance method are methods used to adjust the balance in accounts receivable to reflect uncollectible accounts.

Cash is an asset that must be safeguarded because ________.

Part A: Use the following information to complete the June bank reconciliation for ArcCo: Part B: What amount will ArcCo show for cash on its June 30 balance sheet? Part C: For which item(s)must ArcCo prepare an adjusting entry?

Put an X in the appropriate box to show how each of these items would appear on a company's bank reconciliation.Put an asterisk (*)next to the items for which the company must record an adjusting entry:

Midway Company had a balance of $(500)in its allowance for uncollectible accounts.Aging of its accounts receivable revealed that the allowance should be $(1,400).The amount of bad debts expense for the period should be ________.

Since C.D.Lee's bonus is tied to net income,he decided to underestimate the bad debts expense for the year ended December 31,2012.Which 2012 financial statements will be impacted by this underestimate of bad debts expense? Since bad debts expense is just an estimate,is this treatment ethical?

Preparing a bank reconciliation enables a company to ________.

The daily bank deposit is made by whoever is going to lunch near the bank.This is an internal control ________.

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,the allowance for uncollectible accounts will be:

MasterCard charges Team Shirts 4% of sales.On June 15,Team Shirts sold $4,000 worth of T-shirts on MasterCard accounts.Team Shirts paid a fee of $174.40 to MasterCard.

Sales for December for Team Shirts were $36,000.The average net accounts receivable was $1,425.The accounts receivable turnover was ________.

The accountant found that four outstanding checks worth a total of $990 were not on the bank statement.On the bank reconciliation,this amount should be ________.

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

Books,Inc.always balances its checkbook before it pays the month's bills.This is an internal control ________.

Accounts receivable are ________.

Notes receivable usually have a collection period that is longer than accounts receivable.

Team Shirts' receivables turnover was 12 times per year.The retail industry average for receivables turnover is 13 times per year.

The direct write-off method and the allowance method are methods used to adjust the balance in accounts receivable to reflect uncollectible accounts.

Cash is an asset that must be safeguarded because ________.

Part A: Use the following information to complete the June bank reconciliation for ArcCo: Part B: What amount will ArcCo show for cash on its June 30 balance sheet? Part C: For which item(s)must ArcCo prepare an adjusting entry?

Put an X in the appropriate box to show how each of these items would appear on a company's bank reconciliation.Put an asterisk (*)next to the items for which the company must record an adjusting entry:

Midway Company had a balance of $(500)in its allowance for uncollectible accounts.Aging of its accounts receivable revealed that the allowance should be $(1,400).The amount of bad debts expense for the period should be ________.

Since C.D.Lee's bonus is tied to net income,he decided to underestimate the bad debts expense for the year ended December 31,2012.Which 2012 financial statements will be impacted by this underestimate of bad debts expense? Since bad debts expense is just an estimate,is this treatment ethical?

Preparing a bank reconciliation enables a company to ________.

The daily bank deposit is made by whoever is going to lunch near the bank.This is an internal control ________.

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,the allowance for uncollectible accounts will be:

MasterCard charges Team Shirts 4% of sales.On June 15,Team Shirts sold $4,000 worth of T-shirts on MasterCard accounts.Team Shirts paid a fee of $174.40 to MasterCard.

Sales for December for Team Shirts were $36,000.The average net accounts receivable was $1,425.The accounts receivable turnover was ________.

The accountant found that four outstanding checks worth a total of $990 were not on the bank statement.On the bank reconciliation,this amount should be ________.

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