Exam 6: Cash and Receivables

The Trey Co. sells $75,000 of accounts receivable to a factor and receives 90% of the value of the factored accounts less a 15% commission based on the gross amount of factored accounts receivable. After the journal entry to record this factoring transaction is made, Trey Co.'s total assets will be

When aging of accounts receivable is used, each age group is multiplied by its own estimated uncollectible percentage to determine each age group's estimated uncollectible amount. The sum of the amounts thus determined

A company is not required to disclose all policies related to their receivables but only ones that might be helpful to an external user.

Moose, Inc. established a $250 petty cash fund three months ago. Today, April 21, the petty cash custodian has $198 in cash and receipts for the following: office supplies $12, equipment repairs $25, postage $7, and parking fees $13. Required: Prepare a compound journal entry to replenish the fund and reduce its size to $200.

To be considered cash the funds must be available to pay current obligations. Certain situations arise where cash is restricted and therefore cannot be considered as cash. Provide a brief description of these situations.

On August 2 Banger Mash Company sold merchandise to the Boise Potato Company in the amount of $6,500 with terms of 3/10 n/30, f.o.b. shipping. An invoice in the amount of $180 was received by Boise Potato for the freight. On August 12 Banger Mash received the money due for the merchandise purchased. Required: 1) Prepare the journal entries on Banger Mash's books for the merchandise sold using the gross method. 2) Prepare the journal entries on Banger Mash's books for the merchandise sold using the net method. 3) Prepare the journal entry assuming Boise did not pay the invoice due until August 25.

Which of the following would be included in cash and cash equivalents on the balance sheet?

When pledging accounts receivable

A disadvantage of using the gross price method to account for cash discounts extended by the seller to its customer is that

The most theoretically sound method of accounting for cash discounts on credit sales is the

On June 11, Nathan, Inc. accepted a $8,000, 7%, 60-day note from a customer. On June 26, the company discounted the note at the bank at 10%. The proceeds amounted to

When completing the bank reconciliation, deposits in transit would be

Which of the following would be reported as a liability?

Which of the following is NOT true concerning notes receivable?

Which of the following is a key element of internal control over cash payments?

On September 1, 2013, Geco Co. sold $40,000 of goods and accepted a one-year, 12% note. Required: a.If no reversing entries were made after December 31, 2013, and adjusting entries were made, record the collection of the note on September 1, 2014. b.Assume instead that a noninterest-bearing note for $44,800 for the same goods was issued. What balance sheet accounts and amounts should be disclosed on December 31, 2013?

On January 1, 2014, Jonas Company established a petty cash fund of $500. By March 31, 2014, when the fund was replenished, the following petty cash vouchers had been issued: January 26, postage, $48; February 16, postage, $52; February 6, airport limousine fares, $24; January 18, office supplies, $67; March 8, postage, $38; March 4, local express delivery charges on purchases, $65. There was $209 in coins and currency left in petty cash before replenishment. Required: a.Prepare the journal entries to record the transactions relating to Jonas Company's petty cash fund for the first quarter of 2014. b.On April 1, the size of the petty cash fund was decreased to $425. What journal entry (if any) is necessary to record this action?

GAAP requires receivable to be recorded and reported at their present value, but excludes accounts receivables from this rule.

Which of the following is NOT a basic form of a financing agreement to obtain cash from accounts receivable?

Revenue from a credit sale may be deferred because