Question 1

Using the following transactions for 2010, show how the T account below would appear after all appropriate postings have been made. Assume an opening balance of $900.

Accepted Answer

The answer of Using the following transactions for 2010, show...

Question 2

Having a compensating balance increases a company's liquidity.

Accepted Answer

A) True 
 B)False

Question 3

The account Allowance for Uncollectible Accounts is classified as a(n)

Accepted Answer

A)  contra account to Uncollectible Accounts Expense. 
B)  expense. 
C)  liability. 
D)  contra account to Accounts Receivable. 
A)  contra account to Uncollectible Accounts Expense. 
B)  expense. 
C)  liability. 
D)  contra account to Accounts Receivable.

Question 4

On a bank reconciliation, outstanding checks are deducted from the balance per books.

Accepted Answer

A) True 
 B)False

Question 5

A company's acceptance of credit cards like Visa is an example of

Accepted Answer

A)  securitization. 
B)  factoring with recourse. 
C)  discounting. 
D)  factoring without recourse. 
A)  securitization. 
B)  factoring with recourse. 
C)  discounting. 
D)  factoring without recourse.

Question 6

Which of the following would not be a valid reason to keep some currency on hand at a place of business?

Accepted Answer

A)  To pay small, unforeseen expenses 
B)  To make up for any imbalance in the books 
C)  To advance money to sales reps for travel expenses 
D)  To provide money for cash registers 
A)  To pay small, unforeseen expenses 
B)  To make up for any imbalance in the books 
C)  To advance money to sales reps for travel expenses 
D)  To provide money for cash registers

Question 7

Which of the following would be deducted from the balance per bank?

Accepted Answer

A)  An issued check that the company forgot to record on its books 
B)  Bank service charge 
C)  Outstanding checks 
D)  NSF check 
A)  An issued check that the company forgot to record on its books 
B)  Bank service charge 
C)  Outstanding checks 
D)  NSF check

Question 8

Days' sales uncollected equals 365 days divided by

Accepted Answer

A)  net sales. 
B)  average net accounts receivable. 
C)  net income. 
D)  the receivable turnover. 
A)  net sales. 
B)  average net accounts receivable. 
C)  net income. 
D)  the receivable turnover.

Question 9

Which of the following methods of recording uncollectible accounts expense would be described best as a balance sheet method?

Accepted Answer

A)  Accounts receivable aging method 
B)  Percentage of net sales method 
C)  Direct charge-off method 
D)  Both percentage of net sales method and direct charge-off method 
A)  Accounts receivable aging method 
B)  Percentage of net sales method 
C)  Direct charge-off method 
D)  Both percentage of net sales method and direct charge-off method

Question 10

What is a contingent liability, and how does it relate to the discounting of a note receivable at the bank?

Accepted Answer

A contingent liability is a potential li

Question 11

At year end, Gorgin Design Company has a $1,800 credit balance in Allowance for Uncollectible Accounts. If an accounts receiving aging method analysis indicates that an estimated $11,400 of year-end receivables are uncollectible, what will be the balance in Allowance for Uncollectible Accounts after the appropriate adjusting entry for uncollectible accounts has been made? Indicate if the balance is a debit or credit.

Accepted Answer

The answer of At year end, Gorgin Design Company has...

Question 12

The allowance method of handling bad debts violates the matching principle.

Accepted Answer

A) True 
 B)False

Question 13

Interest on a 90-day, 10 percent, $10,000 note receivable is

Accepted Answer

A)  $2,500.77. 
B)  $288.38. 
C)  $246.58. 
D)  $1,000.63. 
A)  $2,500.77. 
B)  $288.38. 
C)  $246.58. 
D)  $1,000.63.

Question 14

Which of the following accounts is classified as a short-term financial asset?

Accepted Answer

A)  Office Supplies 
B)  Accounts Receivable 
C)  Equipment 
D)  Prepaid Insurance 
A)  Office Supplies 
B)  Accounts Receivable 
C)  Equipment 
D)  Prepaid Insurance

Question 15

The balance of Accounts Receivable, net of the allowance account, is $35,000 before the write-off of a $2,800 account. What is the Accounts Receivable balance, net of the allowance account, after the write-off?

Accepted Answer

A)  $35,000 
B)  $32,200 
C)  $2,800 
D)  $37,800 
A)  $35,000 
B)  $32,200 
C)  $2,800 
D)  $37,800

Question 16

Under the allowance method, Uncollectible Accounts Expense is recorded when an individual customer defaults.

Accepted Answer

A) True 
 B)False

Question 17

If the amount of uncollectible accounts expense is understated at year end,

Accepted Answer

A)  net Accounts Receivable will be understated. 
B)  total liabilities will be overstated. 
C)  net income will be understated. 
D)  Allowance for Uncollectible Accounts will be understated. 
A)  net Accounts Receivable will be understated. 
B)  total liabilities will be overstated. 
C)  net income will be understated. 
D)  Allowance for Uncollectible Accounts will be understated.

Question 18

Trade credit arises from wholesale or retail sales.

Accepted Answer

A) True 
 B)False

Question 19

The receivable turnover is expressed in terms of

Accepted Answer

A)  times. 
B)  days. 
C)  a percentage. 
D)  dollars. 
A)  times. 
B)  days. 
C)  a percentage. 
D)  dollars.

Question 20

Which of the following would be added to the balance per books on a bank reconciliation?

Accepted Answer

A)  Deposits in transit 
B)  Outstanding checks 
C)  Service charges 
D)  Notes collected by the bank 
A)  Deposits in transit 
B)  Outstanding checks 
C)  Service charges 
D)  Notes collected by the bank

Exam 9: Cash and Receivables

Using the following transactions for 2010, show how the T account below would appear after all appropriate postings have been made. Assume an opening balance of $900.

Having a compensating balance increases a company's liquidity.

The account Allowance for Uncollectible Accounts is classified as a(n)

On a bank reconciliation, outstanding checks are deducted from the balance per books.

A company's acceptance of credit cards like Visa is an example of

Which of the following would not be a valid reason to keep some currency on hand at a place of business?

Which of the following would be deducted from the balance per bank?

Days' sales uncollected equals 365 days divided by

Which of the following methods of recording uncollectible accounts expense would be described best as a balance sheet method?

What is a contingent liability, and how does it relate to the discounting of a note receivable at the bank?

The allowance method of handling bad debts violates the matching principle.

Interest on a 90-day, 10 percent, $10,000 note receivable is

Which of the following accounts is classified as a short-term financial asset?

The balance of Accounts Receivable, net of the allowance account, is $35,000 before the write-off of a $2,800 account. What is the Accounts Receivable balance, net of the allowance account, after the write-off?

Under the allowance method, Uncollectible Accounts Expense is recorded when an individual customer defaults.

If the amount of uncollectible accounts expense is understated at year end,

Trade credit arises from wholesale or retail sales.

The receivable turnover is expressed in terms of

Which of the following would be added to the balance per books on a bank reconciliation?

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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