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

Which of the following items from Kash Kow's bank reconciliation requires an adjusting entry on Kash Kow's books?

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:

Identify each of the following reconciling items in the bank reconciliation process as being a reconciling item either on the bank's side (Bank)or on the company's side (Book)of the bank reconciliation. _____ 1.NSF check _____ 2.Bank service charges _____ 3.Interest earned on the checking account _____ 4.Outstanding checks _____ 5.Deposits in transit

X Company used the following items to complete its bank reconciliation for the month of October: ∙ Deposits in transit were $2,500. ∙ Outstanding checks totaled $1,100. ∙ Bank service charges were $10. ∙ The company correctly wrote a check for $192,but mistakenly recorded the check as $129 on its books.The bank cashed the check correctly for $192. ∙ A customer's check for $50 was returned by the bank,NSF. How should the check for $192 that was recorded as $129 be treated?

Bad debts expense is a contra-asset account on the balance sheet.

Team Shirts had a balance of $(700)in its Allowance for uncollectible accounts.Aging of its accounts receivable revealed that the allowance should be $(1,250).The amount of bad debts expense for the period should be ________.

Which accounting principle requires that bad debts expense be recognized in the same period as the sale?

X Company used the following items to complete its bank reconciliation for the month of October: ∙ Deposits in transit were $2,500. ∙ Outstanding checks totaled $1,100. ∙ Bank service charges were $10. ∙ The company correctly wrote a check for $192,but mistakenly recorded the check as $129 on its books.The bank cashed the check correctly for $192. ∙ A customer's check for $50 was returned by the bank,NSF. The $2,500 deposit in transit should be ________.

Requiring cashiers to handle cash and count the cash at the end of each shift is an internal control weakness because these duties should be segregated.

At December 31,2011,Dodgem Company has Accounts receivable of $25,000.The Allowance for uncollectible accounts has a balance of $(200)before adjustment. Part A: Show the effect of the following events on the accounting equation,including both account titles and amounts: Part B: Select the column which represents the 2011 financial statement where the item will appear,and fill in the correct dollar amount: Part C: Select the column which represents the 2012 financial statement where the item will appear,and fill in the correct dollar amount:

KayCo began business January 1,2012.During 2012,sales were $650,000.The year-end accounts receivable balance was $104,000.The company estimates that 1.5% of sales will become bad debts.The financial statements for the year ended December 31,2012 will show ________.

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?

The bookkeeper opens the mail,deposits any checks received in the bank,and updates the company's accounts receivable.This is an internal control ________.

Benefits of allowing customers to use credit cards for purchases include the potential increase in the number of customers and elimination of the risks associated with sales on account.

Cash equivalents are ________.

The Allowance for uncollectible accounts appears on the income statement.

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:

The bookkeeper was unable to reconcile the company's checking account,so she changed the company's books to agree with the cash balance on the bank statement.This is an internal control ________.

Sam doesn't bother to record checks in his checkbook.He just goes to an ATM and asks for a "Balance Inquiry." Then he knows if he has enough money to pay his bills.This is an internal control ________.

Sales divided by average accounts receivable is the ________.