Question 1

Which of the following topics involves a contingent liability?

Accepted Answer

A)  Installment accounts receivable 
B)  A discounted note receivable 
C)  Securitization 
D)  Credit card sales 
A)  Installment accounts receivable 
B)  A discounted note receivable 
C)  Securitization 
D)  Credit card sales

Question 2

The interest on a three-month, 12 percent, $8,100 note receivable is

Accepted Answer

A)  $243. 
B)  $81. 
C)  $162. 
D)  $972. 
A)  $243. 
B)  $81. 
C)  $162. 
D)  $972.

Question 3

Which of the following would be deducted from the balance per books on a bank reconciliation?

Accepted Answer

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

Question 4

Compensating balances are kept separate from the Cash account balance on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would be added to the balance per bank?

Accepted Answer

A)  Outstanding checks 
B)  Bank service charges 
C)  Collection of a note receivable by the bank 
D)  Deposit in transit 
A)  Outstanding checks 
B)  Bank service charges 
C)  Collection of a note receivable by the bank 
D)  Deposit in transit

Question 7

After a bank reconciliation is completed, journal entries are prepared for items in the balance per books section only.

Accepted Answer

A) True 
 B)False

Question 8

A promissory note may be issued for an amount to be determined at a future date.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not classified as a short-term financial asset?

Accepted Answer

A)  Accounts Receivable 
B)  Notes Receivable 
C)  Inventory 
D)  Cash 
A)  Accounts Receivable 
B)  Notes Receivable 
C)  Inventory 
D)  Cash

Question 10

The balance in Allowance for Uncollectible Accounts must be considered prior to end-of-period adjustment when using which of the following methods?

Accepted Answer

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

Question 11

Installment accounts receivable covering periods longer than twelve months are classified as long-term assets.

Accepted Answer

A) True 
 B)False

Question 12

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts,

Accepted Answer

A)  total assets decrease. 
B)  liabilities increase. 
C)  total assets are unchanged. 
D)  net income is unchanged. 
A)  total assets decrease. 
B)  liabilities increase. 
C)  total assets are unchanged. 
D)  net income is unchanged.

Question 13

Under the direct charge-off method of dealing with uncollectible accounts,

Accepted Answer

A)  revenues and expenses are properly matched. 
B)  Accounts Receivable is shown on the balance sheet at net realizable value. 
C)  Uncollectible Accounts Expense is recorded in the period of the sale. 
D)  no Allowance for Uncollectible Accounts exists. 
A)  revenues and expenses are properly matched. 
B)  Accounts Receivable is shown on the balance sheet at net realizable value. 
C)  Uncollectible Accounts Expense is recorded in the period of the sale. 
D)  no Allowance for Uncollectible Accounts exists.

Question 14

In the journal provided, prepare the entries for the following transactions. (Omit explanations.)

Accepted Answer

The answer of In the journal provided, prepare the entries...

Question 15

Assume that the $1,000, 90-day, 8 percent note was received on August 31 and that the fiscal year ended on September 30. The adjusting entry that would be made to record the interest receivable is (amounts rounded to nearest dollar):

Accepted Answer

The answer of Assume that the $1,000, 90-day, 8 percent...

Question 16

The debtor named in a promissory note is called the payee.

Accepted Answer

A) True 
 B)False

Question 17

When a bank reconciliation balances, no errors could have been made by the bank or the company.

Accepted Answer

A) True 
 B)False

Question 18

In the journal provided, prepare entries for the following (assume a calendar-year accounting period): Omit explanations

Accepted Answer

The answer of In the journal provided, prepare entries for...

Question 19

State the amount of cash that would appear on the balance sheet as of September 30.

Accepted Answer

The answer of State the amount of cash that would...

Question 20

A petty cash fund is an example of an imprest system.

Accepted Answer

A) True 
 B)False

Exam 9: Cash and Receivables

Which of the following topics involves a contingent liability?

The interest on a three-month, 12 percent, $8,100 note receivable is

Which of the following would be deducted from the balance per books on a bank reconciliation?

Compensating balances are kept separate from the Cash account balance on the balance sheet.

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

Which of the following would be added to the balance per bank?

After a bank reconciliation is completed, journal entries are prepared for items in the balance per books section only.

A promissory note may be issued for an amount to be determined at a future date.

Which of the following is not classified as a short-term financial asset?

The balance in Allowance for Uncollectible Accounts must be considered prior to end-of-period adjustment when using which of the following methods?

Installment accounts receivable covering periods longer than twelve months are classified as long-term assets.

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts,

Under the direct charge-off method of dealing with uncollectible accounts,

In the journal provided, prepare the entries for the following transactions. (Omit explanations.)

Assume that the $1,000, 90-day, 8 percent note was received on August 31 and that the fiscal year ended on September 30. The adjusting entry that would be made to record the interest receivable is (amounts rounded to nearest dollar):

The debtor named in a promissory note is called the payee.

When a bank reconciliation balances, no errors could have been made by the bank or the company.

In the journal provided, prepare entries for the following (assume a calendar-year accounting period): Omit explanations

State the amount of cash that would appear on the balance sheet as of September 30.

A petty cash fund is an example of an imprest system.

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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