Question 1

A company's acceptance of credits cards, like MasterCard, is an example of factoring with recourse.

Accepted Answer

A) True 
 B)False

Question 2

The maker of a note records Notes Payable.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would not be included in Cash or Cash Equivalents?

Accepted Answer

A)  Ninety-day U.S. Treasury bills held 
B)  Deposits in bank checking accounts 
C)  Checks and money orders received from customers 
D)  Six-month certificates of deposit held 
A)  Ninety-day U.S. Treasury bills held 
B)  Deposits in bank checking accounts 
C)  Checks and money orders received from customers 
D)  Six-month certificates of deposit held

Question 4

Interest on a note receivable may be calculated without knowledge of the

Accepted Answer

A)  principal amount. 
B)  rate of interest. 
C)  note's maturity date. 
D)  note's duration. 
A)  principal amount. 
B)  rate of interest. 
C)  note's maturity date. 
D)  note's duration.

Question 5

Explain the difference between the two methods used to estimate uncollectible accounts and identify which financial statement is emphasized by each method.

Accepted Answer

One method analyzes the net credit sales

Question 6

Using the percentage of net sales method, uncollectible accounts expense for the year is estimated to be $54,000. If the balance of the Allowance for Uncollectible Accounts is an $18,000 credit before adjustment, what is the balance after adjustment?

Accepted Answer

A)  $72,000 
B)  $38,000 
C)  $54,000 
D)  $18,000 
A)  $72,000 
B)  $38,000 
C)  $54,000 
D)  $18,000

Question 7

Which of the following statements is false regarding promissory notes?

Accepted Answer

A)  They are sometimes used to extend past-due accounts. 
B)  They can be resold to banks. 
C)  They must be held by the maker until maturity. 
D)  They are often received upon the sale of machinery and automobiles. 
A)  They are sometimes used to extend past-due accounts. 
B)  They can be resold to banks. 
C)  They must be held by the maker until maturity. 
D)  They are often received upon the sale of machinery and automobiles.

Question 8

The SEC requires companies to disclose the amount of compensating balances in a note to the financial statements.

Accepted Answer

A) True 
 B)False

Question 9

When the allowance method is used, the write-off of an account receivable results in an expense at the time of write-off.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would not be considered cash?

Accepted Answer

A)  Postage stamps 
B)  Checks from customers 
C)  Money orders from customers 
D)  Bank deposits 
A)  Postage stamps 
B)  Checks from customers 
C)  Money orders from customers 
D)  Bank deposits

Question 11

Customers' accounts with credit balances should be disclosed as a(n)

Accepted Answer

A)  expense on the income statement. 
B)  current liability on the balance sheet. 
C)  offset to Accounts Receivable on the asset side of the balance sheet. 
D)  note to the financial statements. 
A)  expense on the income statement. 
B)  current liability on the balance sheet. 
C)  offset to Accounts Receivable on the asset side of the balance sheet. 
D)  note to the financial statements.

Question 12

Why do businesses need to keep some currency on hand?

Accepted Answer

Businesses need to keep some currency on

Question 13

A check for $235 is incorrectly recorded by a company as $253. On the bank reconciliation the $18 error should be

Accepted Answer

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

Question 14

Determine the interest on the following notes payable:
a. $3,000 at 10 percent for 60 days
b. $600 at 16 percent for 4 months
c. $5,000 at 12 percent for 45 days
d. $900 at 14 percent for 30 days

Accepted Answer

a. $49.32 ($3,000 @#LAT-DLM& 10/100 @#LAT-DLM&60/3

Question 15

In a petty cash fund, the current cash amount minus the receipts submitted should equal the original fixed amount.

Accepted Answer

A) True 
 B)False

Question 16

Debit balances in customer accounts appear on the balance sheet as a current liability.

Accepted Answer

A) True 
 B)False

Question 17

Assume that part of accounts and other receivables on Thompson Toys' balance sheet is $16 million as of February 2, 2010. Also assume that Allowance for Uncollectible Accounts has a credit balance of $550,000 and that Thompson estimates its uncollectible accounts as 0.1 percent of net sales and the amount of sales is $11,019,000,000. Record the adjusting entry to recognize uncollectible accounts using the percentage of net sales method.

Accepted Answer

The answer of Assume that part of accounts and other...

Exam 9: Cash and Receivables

A company's acceptance of credits cards, like MasterCard, is an example of factoring with recourse.

The maker of a note records Notes Payable.

Which of the following would not be included in Cash or Cash Equivalents?

Interest on a note receivable may be calculated without knowledge of the

Explain the difference between the two methods used to estimate uncollectible accounts and identify which financial statement is emphasized by each method.

Using the percentage of net sales method, uncollectible accounts expense for the year is estimated to be $54,000. If the balance of the Allowance for Uncollectible Accounts is an $18,000 credit before adjustment, what is the balance after adjustment?

Which of the following statements is false regarding promissory notes?

The SEC requires companies to disclose the amount of compensating balances in a note to the financial statements.

When the allowance method is used, the write-off of an account receivable results in an expense at the time of write-off.

Which of the following would not be considered cash?

Customers' accounts with credit balances should be disclosed as a(n)

Why do businesses need to keep some currency on hand?

A check for $235 is incorrectly recorded by a company as $253. On the bank reconciliation the $18 error should be

Determine the interest on the following notes payable: a. $3,000 at 10 percent for 60 days b. $600 at 16 percent for 4 months c. $5,000 at 12 percent for 45 days d. $900 at 14 percent for 30 days

In a petty cash fund, the current cash amount minus the receipts submitted should equal the original fixed amount.

Debit balances in customer accounts appear on the balance sheet as a current liability.

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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