Question 1

O'Tole Co. reports assigned accounts receivable of $190,000 that relate to an unpaid note payable of $75,000. Correct balance sheet disclosure is

Accepted Answer

A)  Current assets:
 Accounts receivable assigned $\quad $ $190,000
Less: Note payable  $\quad $75,000
Equity in accounts receivable assigned $\quad $ $115,000 
B)  Current assets: 
Equity in accounts receivable assigned $\quad $ $115,000 
C)  Current assets: 
Accounts receivable assigned  $\quad $$190,000
Current liabilities:
Note payable  $\quad $$75,000 
D)  Current assets: 
Accounts receivable assigned $\quad $ $190,000
Current liabilities:
Note payable  $\quad $$75,000
Less: Accounts receivable assigned 75,000
$ -0- 
A)  Current assets:
 Accounts receivable assigned $\quad $ $190,000
Less: Note payable  $\quad $75,000
Equity in accounts receivable assigned $\quad $ $115,000 
B)  Current assets: 
Equity in accounts receivable assigned $\quad $ $115,000 
C)  Current assets: 
Accounts receivable assigned  $\quad $$190,000
Current liabilities:
Note payable  $\quad $$75,000 
D)  Current assets: 
Accounts receivable assigned $\quad $ $190,000
Current liabilities:
Note payable  $\quad $$75,000
Less: Accounts receivable assigned 75,000
$ -0-

Question 2

Nontrade receivables, such as deposits with utility companies or advances to subsidiary companies, should be

Accepted Answer

A)  recorded in separate accounts and reported as noncurrent assets on the balance sheet 
B)  recorded along with trade receivables in one account and included as part of the total receivables balance on the balance sheet 
C)  recorded in separate accounts and separately reported on the balance sheet 
D)  recorded in separate accounts and reported as an offset to retained earnings on the balance sheet 
A)  recorded in separate accounts and reported as noncurrent assets on the balance sheet 
B)  recorded along with trade receivables in one account and included as part of the total receivables balance on the balance sheet 
C)  recorded in separate accounts and separately reported on the balance sheet 
D)  recorded in separate accounts and reported as an offset to retained earnings on the balance sheet

Question 3

Given the following information: 
  
The total amount of cash that should appear on the balance sheet is

Accepted Answer

A)  $34,648 
B)  $34,590 
C)  $34,040 
D)  $35,415 
A)  $34,648 
B)  $34,590 
C)  $34,040 
D)  $35,415

Question 4

When the net price method is used to record credit sales, the sales discounts not taken account is reported as a(n)

Accepted Answer

A)  addition to sales returns and allowances on the income statement 
B)  deduction from gross sales on the income statement 
C)  deduction from selling expenses on the income statement 
D)  addition to other revenue on the income statement 
A)  addition to sales returns and allowances on the income statement 
B)  deduction from gross sales on the income statement 
C)  deduction from selling expenses on the income statement 
D)  addition to other revenue on the income statement

Question 5

Which of the following would not be a valid contributing justification for expanding your selling model to include selling goods on account?

Accepted Answer

A)  market share increases 
B)  revenues generated always exceed the costs incurred 
C)  improved customer loyalty 
D)  customer convenience 
A)  market share increases 
B)  revenues generated always exceed the costs incurred 
C)  improved customer loyalty 
D)  customer convenience

Question 6

Pineapple's Fruit Smoothies began the year with a $4,200 credit balance in its Allowances for Doubtful Accounts. During the year, it accrued $21,500 of bad debt expense and wrote off accounts totaling $28,000. At year-end, a percentage of the outstanding accounts receivable indicated that a $4,800 allowance should be provided for on that date. The year-end adjustment for bad debt expense should be

Accepted Answer

A)  $7,100 
B)  $4,800 
C)  $3,000 
D)  $2,300 
A)  $7,100 
B)  $4,800 
C)  $3,000 
D)  $2,300

Question 7

Check 21 is a law that allows merchants to scan digital copies of checks to the bank instead of remitting the actual check.

Accepted Answer

A) True 
 B)False

Question 8

In accounting for sales discounts, most companies use the

Accepted Answer

A)  allowance method 
B)  gross price method 
C)  percentage of price method 
D)  net price method 
A)  allowance method 
B)  gross price method 
C)  percentage of price method 
D)  net price method

Question 9

Joan Bell, Inc. uses the bank reconciliation form that arrives at a corrected cash balance. Bank service charges will be

Accepted Answer

A)  deducted from the book balance 
B)  added to the bank balance 
C)  added to the book balance 
D)  deducted from the bank balance 
A)  deducted from the book balance 
B)  added to the bank balance 
C)  added to the book balance 
D)  deducted from the bank balance

Question 10

The direct write off method is generally not allowed under GAAP because management selects the period of write off thus allowing earnings management. Where as an estimation of uncollectible accounts an entry is necessary each period to accurately match revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 11

In a transfer without recourse the transferor retains the risk of ownership and bears any loss from nonpayment.

Accepted Answer

A) True 
 B)False

Question 12

The discount rate is

Accepted Answer

A)  the interest rate charged by the bank 
B)  the same rate charged to the customer 
C)  always the same as the market rate 
D)  the effective interest rate 
A)  the interest rate charged by the bank 
B)  the same rate charged to the customer 
C)  always the same as the market rate 
D)  the effective interest rate

Question 13

Stacie, Inc. sold goods for $76,000 with terms of 2/10, n/30 on May 1.
Required:
Prepare journal entries for the following:
a.The sale, assuming the gross price method is used.
b.The sale, assuming the net price method is used.
c.Receipt of payment, assuming collection is made on May 31 and the net price method is used.
d.Receipt of payment, assuming collection is made on May 9 and the gross price is used.

Accepted Answer

The answer of Stacie, Inc. sold goods for $76,000 with...

Question 14

A compensating balance used to secure a short term loan should be recorded against its short term borrowing in current assets separate from cash.

Accepted Answer

A) True 
 B)False

Question 15

The entry to replenish the petty cash fund for $250 of various minor expenses would include a

Accepted Answer

A)  debit to Petty Cash 
B)  debit to Cash 
C)  credit to Petty Cash 
D)  credit to Cash 
A)  debit to Petty Cash 
B)  debit to Cash 
C)  credit to Petty Cash 
D)  credit to Cash

Question 16

The Boise Tractor Company hired a new auditor DeBruins & Co. Upon review of their accounting records DeBruins made some suggestions regarding the information classified in the single account titled Receivables. The auditors found was the following:  
 Required:
1) Prepare the journal entry to separate the items into their proper accounts.
2) How should the items be reflected on Boise Tractors balance sheet?

Accepted Answer

1) @#IMG-DLM&_TB6205_00_TB6205

Question 17

On April 7, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, the company discounted the note at 13%.
Required:
Compute the amount of interest revenue and the loss on sale of the note.

Accepted Answer

Interest revenue: $5

Question 18

Cash planning is important because a company wants to

Accepted Answer

A)  ensure that it has adequate cash available to meet maturing obligations 
B)  ensure the safeguarding of its available cash 
C)  forecast all available cash surpluses 
D)  prepare a cash budget so it can invest all cash 
A)  ensure that it has adequate cash available to meet maturing obligations 
B)  ensure the safeguarding of its available cash 
C)  forecast all available cash surpluses 
D)  prepare a cash budget so it can invest all cash

Question 19

The method for estimating bad debts that results in the accounts receivable being properly reported at its estimated net realizable value is the

Accepted Answer

A)  aging of accounts receivable method 
B)  percentage of net sales method 
C)  percentage of sales method 
D)  percentage of outstanding accounts payable method 
A)  aging of accounts receivable method 
B)  percentage of net sales method 
C)  percentage of sales method 
D)  percentage of outstanding accounts payable method

Question 20

In the case of a non-interest-bearing note,

Accepted Answer

A)  the amount borrowed is listed as the face value 
B)  the amount to be collected is listed as the face value 
C)  the present value is listed as the face value 
D)  the present value is listed as the face value. 
A)  the amount borrowed is listed as the face value 
B)  the amount to be collected is listed as the face value 
C)  the present value is listed as the face value 
D)  the present value is listed as the face value.

O'Tole Co. reports assigned accounts receivable of $190,000 that relate to an unpaid note payable of $75,000. Correct balance sheet disclosure is

Nontrade receivables, such as deposits with utility companies or advances to subsidiary companies, should be

Given the following information: The total amount of cash that should appear on the balance sheet is

When the net price method is used to record credit sales, the sales discounts not taken account is reported as a(n)

Which of the following would not be a valid contributing justification for expanding your selling model to include selling goods on account?

Check 21 is a law that allows merchants to scan digital copies of checks to the bank instead of remitting the actual check.

In accounting for sales discounts, most companies use the

Joan Bell, Inc. uses the bank reconciliation form that arrives at a corrected cash balance. Bank service charges will be

The direct write off method is generally not allowed under GAAP because management selects the period of write off thus allowing earnings management. Where as an estimation of uncollectible accounts an entry is necessary each period to accurately match revenues and expenses.

In a transfer without recourse the transferor retains the risk of ownership and bears any loss from nonpayment.

The discount rate is

A compensating balance used to secure a short term loan should be recorded against its short term borrowing in current assets separate from cash.

The entry to replenish the petty cash fund for $250 of various minor expenses would include a

On April 7, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, the company discounted the note at 13%. Required: Compute the amount of interest revenue and the loss on sale of the note.

Cash planning is important because a company wants to

The method for estimating bad debts that results in the accounts receivable being properly reported at its estimated net realizable value is the

In the case of a non-interest-bearing note,

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Companys Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingencies

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Postretirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Time Value of Money Module

Filters

Exam 6: Cash and Receivables

O'Tole Co. reports assigned accounts receivable of $190,000 that relate to an unpaid note payable of $75,000. Correct balance sheet disclosure is

Nontrade receivables, such as deposits with utility companies or advances to subsidiary companies, should be

Given the following information: The total amount of cash that should appear on the balance sheet is

When the net price method is used to record credit sales, the sales discounts not taken account is reported as a(n)

Which of the following would not be a valid contributing justification for expanding your selling model to include selling goods on account?

Check 21 is a law that allows merchants to scan digital copies of checks to the bank instead of remitting the actual check.

In accounting for sales discounts, most companies use the

Joan Bell, Inc. uses the bank reconciliation form that arrives at a corrected cash balance. Bank service charges will be

The direct write off method is generally not allowed under GAAP because management selects the period of write off thus allowing earnings management. Where as an estimation of uncollectible accounts an entry is necessary each period to accurately match revenues and expenses.

In a transfer without recourse the transferor retains the risk of ownership and bears any loss from nonpayment.

The discount rate is

A compensating balance used to secure a short term loan should be recorded against its short term borrowing in current assets separate from cash.

The entry to replenish the petty cash fund for $250 of various minor expenses would include a

On April 7, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, the company discounted the note at 13%. Required: Compute the amount of interest revenue and the loss on sale of the note.

Cash planning is important because a company wants to

The method for estimating bad debts that results in the accounts receivable being properly reported at its estimated net realizable value is the

In the case of a non-interest-bearing note,

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Companys Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingencies

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Postretirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Time Value of Money Module

Filters