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

Cash is found on the ________.

On a bank reconciliation,outstanding checks and NSF checks are deductions from the bank balance.

Why are credit card sales important to businesses?

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 10% of accounts receivable will be uncollectible.The financial statements for the year ended December 31,2012 will show ________.

Team Shirts had an unadjusted balance in its Allowance for uncollectible accounts of $(875)on August 31.This amount was "left over" at the end of August because not as many accounts were written off as previously anticipated.An aging of accounts receivable at August 31 revealed an estimate of $1,000 for uncollectible accounts.Using the accounts receivable allowance method,bad debts expense for August should be:

What is the effect of the adjusting entry for bad debts expense on the Statement of cash flows?

The Magic Cow accepts MasterCard.A customer made a $10,000 purchase using MasterCard.MasterCard charges Magic Cow 4% of sales as a service fee.Prepare the entry to record the sale including account titles and amounts.

In the allowance method,the adjustment used to write off an uncollectible account ________.

Acme,Inc.accepted a promissory note from NadirCo,who promised to pay Acme $5,000 plus 6% interest at the end of four months.When Acme first accepts the note,it should record a ________.

Brooke's Bikes sold $11,235 worth of mountain bikes to customers using bank credit cards during October.The banks charge a credit card fee of 4% of sales.What is the amount of cash Brooke's Bikes should collect for October credit card sales?

South Sea's sales were $60,000 for 2011 and $45,000 for 2012.Average net receivables were $4,000 for both 2011 and 2012.The receivables turnover for 2012 was ________.

Team Shirts deposited a check written for $325.However,the accountant entered the amount as $235 into the books.On the bank statement the amount deposited was correctly entered as $325.On the bank reconciliation,the $90 should be ________.

If you bank on-line,you can view your bank balance at any time and see exactly how much cash you have available to pay bills.

Acme,Inc.accepted a promissory note from NadirCo,who promised to pay Acme $5,000 plus 6% interest at the end of four months.When NadirCo first gives Acme the note,NadirCo should record a ________.

Making a comparison between the cash balance in the accounting records and on the bank statement is called a bank reconciliation.

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:

The allowance for uncollectible accounts is a(n)________.

In 2011,the receivables turnover for Team Shirts was 15 times.In 2012 it was 14.5 times.This means that ________.

It is realistic for a firm to assume that 100% of accounts receivable will be collected.