In a factoring of accounts receivable with recourse, which party bears (indicated by * in the answer alternatives) the cost of bad debts and sales adjustments? \[\begin{array} { | l | l | l | l | } \hline &\text { } & \text {bad depts} &\text {sales adjuistments} \\ \hline 1&\text { transferor } & *& * \\ \hline 2 &\text { factor } & &* \\ \hline &\text { transferor } & & * \\ \hline 3& \text { factor } & * & \\ \hline& \text { transferor} & *& \\ \hline 4 &\text { factor } & *\\ \hline \end{array}\]

A) Choice 1 B) Choice 2 C) Choice 3 D) Choice 4 A) Choice 1 B) Choice 2 C) Choice 3 D) Choice 4

Which party bears (indicated by * in the answer alternatives) the cost of bad debts and sales adjustments for assigned accounts receivable? \[\begin{array} { | l | l | l | l | } \hline &\text { } & \text {bad depts} &\text {sales adjuistments} \\ \hline 1&\text { Assignor } & *& * \\ \hline 2 &\text { Assignee } & & *\\ \hline &\text { Assignor } & & * \\ \hline 3& \text { Assignee } & * & \\ \hline& \text { Assignor } & *& \\ \hline 4 &\text { Assignee } & *\\ \hline \end{array}\]

A) Choice 1 B) Choice 2 C) Choice 3 D) Choice 4 A) Choice 1 B) Choice 2 C) Choice 3 D) Choice 4

You have been provided with the following information for XYZ Corporation and its bank, ABC Trust Company. From the Bank Statement at the end of May 2002: $\begin{array} { | l | l | } \hline \text { Ending balance } & \$ 30,399.00 \\ \hline \text { Bank charges } & 26.10 \\ \hline \text { NSF cheque } & 5,400.00 \\ \hline \text { Interest collected on a note for the company by the bank } & 635.10 \\ \hline \end{array}$ From the cash records of the company at the end of May 2002: $\begin{array}{|l|l|} \hline \text { Cash on hand } & \$ 300.00 \\ \hline \text { Ending balance, cash (including cash on hand) } & 52,500.00 \\ \hline \text { Unrecorded deposits } & 21,000.00 \\ \hline \end{array}$ $\text { Outstanding cheques: }$ $\begin{array}{|l|l|} \hline \text { No. 30 } & \$ 1,800.00 \\ \hline \text { No. 48 } & 519.99 \\ \hline \text { No. 50 } & 410.01 \\ \hline \text { No. 51 } & 564.00 \\ \hline \text { No. 55 } & 642.00 \\ \hline \end{array}$ Additional information: Error on cheque No. 12. The cheque was correctly drawn for $882.00, but was shown as $828.00 on the bank statement.

(a) Based on the information above, prep

Exam 7: Financial Assets: Cash and Receivables

ABC Inc. is a Canadian company that reports its results in Canadian dollars. The company sold equipment to a customer in the U.S. for $95,000 US on January 1, 2013 when the exchange rate was $1 CDN = $0.95 US. The client received the equipment on January 31^st, 2013 and promptly wired the required payment to ABC Inc. On January 31, 2013, $1 CDN = $0.96 US. Prepare ABC Inc's journal entries with respect to this transaction, assuming that the receivable was not hedged. Ignore the cost of the equipment.

(Essay)

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Question 41

Which of the following procedures is the least essential attribute of a cash disbursement control system?

(Multiple Choice)

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Question 42

What would be the present value on January 1, year 1, of a $6,000 note (this amount includes both principal and interest) which is payable in full on December 31, year 4, at a 12 percent interest rate, assuming: (a) Annual discounting? $___________. (b) Semi-annual discounting? $_. (c) Quarterly discounting? $_____________.

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Question 43

When a specific bad debt which has already been written off is later collected sales revenue is increased by the amount of the recovery.

(True/False)

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Question 44

Which of the following accounting principles primarily supports the use of an allowance for doubtful accounts?

(Multiple Choice)

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Question 45

Under IFRS, an allowance account must be created reflecting expected lifetime credit losses on all financial instruments.

(True/False)

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Question 46

Financial assets include both derivative and non-derivative type financial instruments.

(True/False)

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Question 47

In a factoring of accounts receivable with recourse, which party bears (indicated by * in the answer alternatives) the cost of bad debts and sales adjustments? bad depts sales adjuistments 1 transferor * * 2 factor * transferor * 3 factor * transferor * 4 factor *

(Multiple Choice)

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Question 48

A note receivable that is sold (i.e. discounted) to obtain early cash must be:

(Multiple Choice)

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Question 49

Which party bears (indicated by * in the answer alternatives) the cost of bad debts and sales adjustments for assigned accounts receivable? bad depts sales adjuistments 1 Assignor * * 2 Assignee * Assignor * 3 Assignee * Assignor * 4 Assignee *

(Multiple Choice)

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Question 50

The cash accounts and bank statement for a company for the month of September reflected the following amounts: CASH ACCOUNT Bal. Aug. 31 4,280 Cheques Deposits 11,700 Petty Cash Account Bal. 125 BANK STATEMENT SUMMARIZED** Balance, Aug. 31 \ 3,750 Deposits 11,350 Notes collected (including 8\% interest) 540 Cheques cashed (11,080) Bank charges 15 Cheque previously deposited returned, NSF (XY, customer) (50) Balance, Sept. 30 \ 4,495 Other related data: Outstanding cheques at end of August totalled $70. Unrecorded deposits at end of August totalled $600. Required: (a) Prepare a bank reconciliation for the month of September. Show all computations. Cash reported on the balance sheet should be $____________________.

(Essay)

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Question 51

Compensating balances must always be shown separately from other financial assets under IFRS on the Statement of Financial Position.

(True/False)

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Question 52

When a parent company transfers its receivables to one of its Special Purpose Entities (SPEs), these receivables will always be included in the parent's consolidated financial statements.

(True/False)

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Question 53

You have been provided with the following information for XYZ Corporation and its bank, ABC Trust Company. From the Bank Statement at the end of May 2002: Ending balance \ 30,399.00 Bank charges 26.10 NSF cheque 5,400.00 Interest collected on a note for the company by the bank 635.10 From the cash records of the company at the end of May 2002: Cash on hand \ 300.00 Ending balance, cash (including cash on hand) 52,500.00 Unrecorded deposits 21,000.00 $\text { Outstanding cheques: }$ No. 30 \ 1,800.00 No. 48 519.99 No. 50 410.01 No. 51 564.00 No. 55 642.00 Additional information: Error on cheque No. 12. The cheque was correctly drawn for $882.00, but was shown as $828.00 on the bank statement.

(Essay)

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Question 54

The allowance method of recognizing bad debt expense (as opposed to the direct write-off method) can be applied in more than one way. What two conditions must be met before the allowance method can be used?

(Multiple Choice)

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Question 55

A company had a petty cash account with a stated balance of $300 on January 1, 2001. Petty cash expenses for 2001 were as follows: postage, $45; supplies used, $145; parking fees, $30. At the end of 2001, the auditor counted the money in the petty cash fund and found $50 cash on hand. The December 31, 2001, entry regarding the petty cash fund should be:

1 Postage expense 45

Supplies expense 145

Parking expense 30

Cash 220

2 Postage expense 45

Supplies expense 145

Parking expense 30

Cash short 30

Cash 250

3 Postage expense 45

Supplies expense 145

Parking expense 30

Cash short 30

Cash 30

Petty cash 220

4 Postage expense 45

Supplies expense 145

Parking expense 30

Cash short 30

Petty cash 250

(Multiple Choice)

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Question 56

In order to qualify as cash equivalents, near-cash items should have a term that is within:

(Multiple Choice)

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Question 57

G owes a debt which is now due amounting to $50,000. The creditor has agreed to accept payment in six equal annual instalments with a 10 percent interest rate. The first payment is to be made one year hence. Each periodic payment will be $_______________________.

(Short Answer)

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Question 58

When a bad debt is written off and subsequently collected in full:

(Multiple Choice)

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Question 59

With compounding, the interest earned each period on an amount invested at a fixed rate of interest increases over time.

(True/False)

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Question 60

Which of the following procedures is the least essential attribute of a cash disbursement control system?

When a specific bad debt which has already been written off is later collected sales revenue is increased by the amount of the recovery.

Which of the following accounting principles primarily supports the use of an allowance for doubtful accounts?

Under IFRS, an allowance account must be created reflecting expected lifetime credit losses on all financial instruments.

Financial assets include both derivative and non-derivative type financial instruments.

In a factoring of accounts receivable with recourse, which party bears (indicated by * in the answer alternatives) the cost of bad debts and sales adjustments? bad depts sales adjuistments 1 transferor * * 2 factor * transferor * 3 factor * transferor * 4 factor *

A note receivable that is sold (i.e. discounted) to obtain early cash must be:

Which party bears (indicated by * in the answer alternatives) the cost of bad debts and sales adjustments for assigned accounts receivable? bad depts sales adjuistments 1 Assignor * * 2 Assignee * Assignor * 3 Assignee * Assignor * 4 Assignee *

Compensating balances must always be shown separately from other financial assets under IFRS on the Statement of Financial Position.

When a parent company transfers its receivables to one of its Special Purpose Entities (SPEs), these receivables will always be included in the parent's consolidated financial statements.

The allowance method of recognizing bad debt expense (as opposed to the direct write-off method) can be applied in more than one way. What two conditions must be met before the allowance method can be used?

In order to qualify as cash equivalents, near-cash items should have a term that is within:

G owes a debt which is now due amounting to $50,000. The creditor has agreed to accept payment in six equal annual instalments with a 10 percent interest rate. The first payment is to be made one year hence. Each periodic payment will be $_______________________.

When a bad debt is written off and subsequently collected in full:

With compounding, the interest earned each period on an amount invested at a fixed rate of interest increases over time.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Revenue Recognition

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters

1	Postage expense	45
	Supplies expense	145
	Parking expense	30
	Cash		220
2	Postage expense	45
	Supplies expense	145
	Parking expense	30
	Cash short	30
	Cash		250
3	Postage expense	45
	Supplies expense	145
	Parking expense	30
	Cash short	30
	Cash		30
	Petty cash		220
4	Postage expense	45
	Supplies expense	145
	Parking expense	30
	Cash short		30
	Petty cash		250