Question 1

Restricted cash may be available to meet the normal operating needs of a company.

Accepted Answer

A) True 
 B)False

Question 2

After preparing a bank reconciliation,a journal entry would be required for which of the following:

Accepted Answer

A) A deposit in transit. 
B) A check for $48 given to a supplier but not yet recorded by the company's bank. 
C) Interest earned on the company's checking account. 
D) A deposit made by a company with a similar name and credited to your account. 
A) A deposit in transit. 
B) A check for $48 given to a supplier but not yet recorded by the company's bank. 
C) Interest earned on the company's checking account. 
D) A deposit made by a company with a similar name and credited to your account.

Question 3

Bank reconciliation
(A.)You are required to complete the June 30 bank reconciliation for Silver Company using the following information and as per the given format:     (B.)Give in general journal form the entry or entries necessary to correct Silver's accounting records as of June 30.(Explanations may be omitted; one compound journal entry is acceptable.)

Accepted Answer

The answer of Bank reconciliation
(A.)You are required to complete the...

Question 4

Financial assets:

Accepted Answer

A) Consist of cash and cash equivalents. 
B) Are reported at cost in the balance sheet. 
C) Include short-term investments in marketable securities and receivables,as well as cash. 
D) Are not very productive assets and should be kept to a minimum in a well-managed company. 
A) Consist of cash and cash equivalents. 
B) Are reported at cost in the balance sheet. 
C) Include short-term investments in marketable securities and receivables,as well as cash. 
D) Are not very productive assets and should be kept to a minimum in a well-managed company.

Question 5

Financial assets include all of the following except:

Accepted Answer

A) Cash. 
B) Marketable securities. 
C) Inventories. 
D) Accounts receivable. 
A) Cash. 
B) Marketable securities. 
C) Inventories. 
D) Accounts receivable.

Question 6

Deegan Industries has an accounts receivable turnover rate of 8.Which of the following statements is not true?

Accepted Answer

A) Deegan's accounts receivable are more liquid than those of a business whose accounts receivable turnover rate is 5. 
B) Deegan waits approximately 46 days to make collections of its credit sales.(Use 365 days in a year.) 
C) Deegan writes off accounts receivable as uncollectible if they are over 45 days old. 
D) Deegan's net credit sales are about eight times the amount of its average accounts receivable. 
A) Deegan's accounts receivable are more liquid than those of a business whose accounts receivable turnover rate is 5. 
B) Deegan waits approximately 46 days to make collections of its credit sales.(Use 365 days in a year.) 
C) Deegan writes off accounts receivable as uncollectible if they are over 45 days old. 
D) Deegan's net credit sales are about eight times the amount of its average accounts receivable.

Question 7

With a line of credit,a liability arises:

Accepted Answer

A) As soon as the line is created. 
B) As soon as any money is borrowed. 
C) Upon repayment of the debt. 
D) At the maturity date. 
A) As soon as the line is created. 
B) As soon as any money is borrowed. 
C) Upon repayment of the debt. 
D) At the maturity date.

Question 8

Notes receivable-computations
Complete the following statements about promissory notes and interest by entering amounts in the spaces provided.(Use 360 days in one year.)

Accepted Answer

The answer of Notes receivable-computations
Complete the following statements about promissory...

Question 9

Financial assets-effects of transactions
Five events involving financial assets are described below:
(a.)Sold merchandise on account.
(b.)Sold available for sale marketable securities at a gain.Cash proceeds from the sale were equal to the current market value of the securities reflected in the last balance sheet.
(c.)Collected an account receivable.
(d.)Adjusted the allowance for doubtful accounts to reflect the portion of accounts receivable estimated to be uncollectible at year-end.
(e.)Made the fair value accounting adjustment reducing the balance in the available for sale marketable securities account to reflect a decrease in the market value of securities owned.
Indicate the effects of each independent transaction or adjusting entry upon the financial measurements shown in the column headings below.Use the code letters,I for increase,D for decrease,and NE for no effect.

Accepted Answer

@#IMG-DLM& *Note to Instructor: Exchanging marketa

Question 10

An Unrealized Holding Gain (or Loss)on Investments classified as "available-for-sale" securities:

Accepted Answer

A) Is reported in the asset section of the balance sheet,as an adjustment to the carrying value of the marketable securities. 
B) Is reported in the stockholders' equity section of the balance sheet,as either an increase or decrease in total stockholders' equity. 
C) Appears in the current period income statement,combined with realized gains and losses from sales of securities. 
D) Indicates the amount of cash a company would receive if the marketable securities were sold as of the balance sheet date. 
A) Is reported in the asset section of the balance sheet,as an adjustment to the carrying value of the marketable securities. 
B) Is reported in the stockholders' equity section of the balance sheet,as either an increase or decrease in total stockholders' equity. 
C) Appears in the current period income statement,combined with realized gains and losses from sales of securities. 
D) Indicates the amount of cash a company would receive if the marketable securities were sold as of the balance sheet date.

Question 11

The valuation principle of "fair value accounting" applied to investments classified as available for sale securities:

Accepted Answer

A) Affects the current period income statement,but not the balance sheet. 
B) Enhances usefulness of the balance sheet in evaluating the financial position of a business. 
C) Applies to marketable securities and inventories. 
D) Requires a corporation to adjust its capital stock account to reflect current market value of its outstanding capital stock. 
A) Affects the current period income statement,but not the balance sheet. 
B) Enhances usefulness of the balance sheet in evaluating the financial position of a business. 
C) Applies to marketable securities and inventories. 
D) Requires a corporation to adjust its capital stock account to reflect current market value of its outstanding capital stock.

Question 12

Each of the following transactions would be reflected in both the income statement and the statement of cash flows for the current period,except:

Accepted Answer

A) The adjustment of marketable securities to their current market value. 
B) Receipt of dividends earned on investments. 
C) Payment of interest on bonds. 
D) Sale of merchandise for cash. 
A) The adjustment of marketable securities to their current market value. 
B) Receipt of dividends earned on investments. 
C) Payment of interest on bonds. 
D) Sale of merchandise for cash.

Question 13

On November 1,Willis Corporation sold merchandise in return for a 6%,three-month note receivable in the amount of $60,000.The proper adjusting entry at December 31 (end of Willis's fiscal year)includes a:

Accepted Answer

A) Credit to Interest Revenue of $600. 
B) Debit to Cash of $600. 
C) Debit to Interest Receivable of $300. 
D) Credit to Notes Receivable of $900. 
A) Credit to Interest Revenue of $600. 
B) Debit to Cash of $600. 
C) Debit to Interest Receivable of $300. 
D) Credit to Notes Receivable of $900.

Question 14

Marketable securities are:

Accepted Answer

A) Listed immediately after Inventory on the balance sheet. 
B) Almost as liquid as cash. 
C) Originally recorded at cost less any broker's commission. 
D) Sold for a gain when cash received is less than the cost basis. 
A) Listed immediately after Inventory on the balance sheet. 
B) Almost as liquid as cash. 
C) Originally recorded at cost less any broker's commission. 
D) Sold for a gain when cash received is less than the cost basis.

Question 15

An account receivable that arose from normal sales activity has a 16-month credit term.This receivable will be classified as a noncurrent asset.

Accepted Answer

A) True 
 B)False

Question 16

With available for-sale securities,unrealized holding gains and losses are:

Accepted Answer

A) Not reported until recognized. 
B) Reported on the income statement. 
C) Reported as an unearned revenue on the balance sheet. 
D) Reported in the stockholders' equity section of the balance sheet. 
A) Not reported until recognized. 
B) Reported on the income statement. 
C) Reported as an unearned revenue on the balance sheet. 
D) Reported in the stockholders' equity section of the balance sheet.

Question 17

Effective internal control over accounts receivable ensures all of the following except:

Accepted Answer

A) All shipments of goods during the period are recorded. 
B) The sale transaction is recorded for the correct dollar amount. 
C) That cash collections from customers are promptly deposited. 
D) The availability of adequate cash for conducting business operations. 
A) All shipments of goods during the period are recorded. 
B) The sale transaction is recorded for the correct dollar amount. 
C) That cash collections from customers are promptly deposited. 
D) The availability of adequate cash for conducting business operations.

Question 18

Balance sheet method-journal entries
The general ledger controlling account for Accounts Receivable has a balance of $120,500 at year-end before adjustment.The company uses the balance sheet approach to estimate uncollectible accounts.By aging the individual customers' accounts,it was determined that the doubtful accounts amounted to $5,020.Prepare the year-end adjusting entry for uncollectible accounts under each of the following independent assumptions.
(a.)Allowance for Doubtful Accounts has a credit balance of $2,850.
(b.)Allowance for Doubtful Accounts has a debit balance of $925.

Accepted Answer

The answer of Balance sheet method-journal entries
The general ledger controlling...

Question 19

The maker of a note is the party to whom payment is to be made.

Accepted Answer

A) True 
 B)False

Question 20

Entries made in the general journal after preparing a bank reconciliation are called closing entries.

Accepted Answer

A) True 
 B)False

Exam 7: Financial Assets

Restricted cash may be available to meet the normal operating needs of a company.

After preparing a bank reconciliation,a journal entry would be required for which of the following:

Financial assets:

Financial assets include all of the following except:

Deegan Industries has an accounts receivable turnover rate of 8.Which of the following statements is not true?

With a line of credit,a liability arises:

Notes receivable-computations Complete the following statements about promissory notes and interest by entering amounts in the spaces provided.(Use 360 days in one year.)

An Unrealized Holding Gain (or Loss)on Investments classified as "available-for-sale" securities:

The valuation principle of "fair value accounting" applied to investments classified as available for sale securities:

Each of the following transactions would be reflected in both the income statement and the statement of cash flows for the current period,except:

On November 1,Willis Corporation sold merchandise in return for a 6%,three-month note receivable in the amount of $60,000.The proper adjusting entry at December 31 (end of Willis's fiscal year)includes a:

Marketable securities are:

An account receivable that arose from normal sales activity has a 16-month credit term.This receivable will be classified as a noncurrent asset.

With available for-sale securities,unrealized holding gains and losses are:

Effective internal control over accounts receivable ensures all of the following except:

The maker of a note is the party to whom payment is to be made.

Entries made in the general journal after preparing a bank reconciliation are called closing entries.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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