Exam 7: Financial Assets

Oceanside Company uses the balance sheet approach in estimating uncollectible accounts expense.Its Allowance for Doubtful Accounts has a $1,200 credit balance prior to adjusting entries.It has just completed an aging analysis of accounts receivable at December 31,2018.This analysis disclosed the following information: What is the appropriate balance for Oceanside's Allowance for Doubtful Accounts at December 31,2018?

If the maker of a note defaults,an entry is made to debit Accounts Receivable and credit Notes Receivable.

Information for the Hooper Company is as follows: (1)What is the amount of uncollectible account expense for 2018 if the company uses the Percentage of Sales method and 2% of credit sales are deemed uncollectible? (2)What is the amount of uncollectible account expense if the company uses the balance sheet approach and estimates $2,200 as uncollectible in 2018? (3)What is the net realizable value of accounts receivable if the company uses the balance sheet approach? (4)If the company uses the balance sheet approach and writes-off a receivable of $450 what will be the net realizable value of accounts receivable after the write off?

If a 5%,four-month note receivable is acquired from a customer in settlement of an existing account receivable of $50,000,the accounting entry for acquisition of the note will:

When a promissory note is issued,you would expect to find:

Assuming Neptune does not sell this investment,the financial statements prepared at December 31,2018 will report:

Cash equivalents include money market funds,U.S.Treasury bills,and high-grade commercial paper that mature within 90 days of acquisition.

U.S.Treasury bills that mature within a period of four to six months are cash equivalents.

In preparing a bank reconciliation,a service charge shown on the bank statement should be:

When a company makes a sale by accepting a bank-issued credit card from the customer,the sale is recorded as a cash sale.

[The following information applies to the questions displayed below.] The Cash account in the ledger of Clear Windows shows a balance of $12,596 at September 30.The bank statement,however,shows a balance of $16,253 at the same date.The only reconciling items consist of a bank service charge of $16,a large number of outstanding checks totaling $6,740,and a deposit in transit. -What is the amount of the deposits in transit?

The first step in a bank reconciliation is to update the depositor's accounting records for any deposits in transit.

Bank reconciliation-computation and journal entry The Cash account in the ledger of Arnaz Company showed a balance of $13,307 at March 31.The bank statement,however,showed a balance of $9,936 at the same date.The only reconciling items consisted of a $4,902 deposit in transit,a bank service charge of $36,outstanding checks totaling $2,600,and an NSF check from L.Ball,one of Arnaz' customers. (a)What is the amount of the adjusted cash balance on March 31? (b)What is the amount of the NSF check? (c)Record the journal entry necessary,if any,to adjust Arnaz Company's accounting records at March 31: (An explanation is not required;a single compound journal entry is acceptable. )

If the note receivable bears interest,the amount debited to Notes Receivable is for the maturity amount of the note.

If a company uses a percentage of net sales in computing the amount of uncollectible accounts expense:

The accounts receivable turnover rate for Baldwin Corporation is 8,and for Basinger Company the turnover rate is 10.These statistics indicate that:

[The following information applies to the questions displayed below.] At the end of January,the unadjusted trial balance of Windsor,Inc.included the following accounts: -Windsor uses the balance sheet approach in estimating uncollectible accounts expense,and aging the accounts receivable indicates the estimated uncollectible portion to be $7,400.The net realizable value of Windsor's accounts receivable in the January 31 balance sheet is:

In order to maximize sales and profits,effective internal control over receivables ensures that credit is extended to all customers who request credit.

When doing a bank reconciliation,an NSF check will reduce the bank's balance.

The accounting records of Golden Company showed cash of $15,250 at June 30.The balance per the bank statement at June 30 was $15,125.The only reconciling items were deposits in transit of $3,200,outstanding checks totaling $4,100,an NSF check for $1,000 returned by the bank which Golden had not yet charged back to the customer,and a bank service charge of $25.The preparation of the bank reconciliation should indicate that Golden's adjusted cash balance at June 30 is: