Question 1

Charges for depositing NSF checks are an example of a transaction that has been recorded by the depositor but may not have been recorded by the bank.

Accepted Answer

A) True 
 B)False

Question 2

Gold Company received a two-month,12% note for $8,000 on June 16.Which of the following statements is true?

Accepted Answer

A) Gold will receive $8,000 plus interest of $960 at maturity. 
B) Gold should record a total receivable due of $8,080 on June 16. 
C) The principal of the note plus interest is due on August 15. 
D) The maturity value of this note is $8,000. 
A) Gold will receive $8,000 plus interest of $960 at maturity. 
B) Gold should record a total receivable due of $8,080 on June 16. 
C) The principal of the note plus interest is due on August 15. 
D) The maturity value of this note is $8,000.

Question 3

Note receivable--journal entries
On September 1,2018,Dental Equipment Corporation sold equipment priced at $350,000 in exchange for a six-month note receivable with an annual interest rate of 12%,all due at maturity.
(a. )Prepare the December 31,2018 (fiscal year-end),adjusting entry made by Dental with regard to this note receivable.
(b. )Prepare the entry made by Dental on March 1,2019 (maturity date of note),to record collection of note and interest.
(a)
2018 General Journal
Dec.31
(b 2019
March 1
(c. )Assume that on March 1,2019,the maker of the note defaults and Dental does not collect the note.Prepare the entry to be made to Dental on March 1,2019,in this situation.
(c)2019
March 1

Accepted Answer

The answer of Note receivable--journal entries
On September 1,2018,Dental Equipment Corporation...

Question 4

The accounts receivable turnover rate:

Accepted Answer

A) Indicates how many times the receivables were converted into cash during the year. 
B) Is computed by dividing average receivables by sales. 
C) Indicates the average number of days a business waits to make collection on a credit sale. 
D) Indicates the proportion of a company's accounts receivable that the independent auditors were unable to confirm. 
A) Indicates how many times the receivables were converted into cash during the year. 
B) Is computed by dividing average receivables by sales. 
C) Indicates the average number of days a business waits to make collection on a credit sale. 
D) Indicates the proportion of a company's accounts receivable that the independent auditors were unable to confirm.

Question 5

In handling of daily cash transactions,a few minor errors inevitably will occur.Which of the following is used to adjust the accounting records for these small errors?

Accepted Answer

A) The bank reconciliation 
B) The Petty Cash account 
C) The Cash Over and Short account 
D) The cash budget 
A) The bank reconciliation 
B) The Petty Cash account 
C) The Cash Over and Short account 
D) The cash budget

Question 6

[The following information applies to the questions displayed below.]
At the end of March,the unadjusted trial balance of Tutor,Inc.included the following accounts:
  
-Tutor uses the balance sheet approach in estimating uncollectible accounts expense,and aging the accounts receivable indicates the estimated uncollectible portion to be $8,600.What is the amount of uncollectible accounts expense recognized in Tutor's income statement for March?

Accepted Answer

A) $8,600. 
B) $6,800. 
C) $10,400. 
D) $1,800. 
A) $8,600. 
B) $6,800. 
C) $10,400. 
D) $1,800.

Question 7

Uncollectible accounts
(a. )What is an uncollectible account? Explain how a business suffers losses from uncollectible accounts.
(b. )"A competent credit manager should set credit policies so as to avoid any and all losses from uncollectible accounts." Is this statement accurate? Explain your answer.

Accepted Answer

(a)An uncollectible account is an accoun

Question 8

Cash equivalents are the most liquid of all assets.

Accepted Answer

A) True 
 B)False

Question 9

When preparing a bank reconciliation,outstanding checks will:

Accepted Answer

A) Increase the balance per depositor's records. 
B) Decrease the balance per depositor's records. 
C) Increase the balance per the bank statement. 
D) Decrease the balance per the bank statement. 
A) Increase the balance per depositor's records. 
B) Decrease the balance per depositor's records. 
C) Increase the balance per the bank statement. 
D) Decrease the balance per the bank statement.

Question 10

Investments in available for sale marketable securities:

Accepted Answer

A) Only include investments in the capital stock of publicly traded corporations. 
B) May be reported in the balance sheet at market values lower than cost,but never at values in excess of original cost. 
C) Are adjusted to current market value at the end of each accounting period. 
D) Are carried in the accounting records at current market values,and therefore do not generate gains or losses when sold at market values. 
A) Only include investments in the capital stock of publicly traded corporations. 
B) May be reported in the balance sheet at market values lower than cost,but never at values in excess of original cost. 
C) Are adjusted to current market value at the end of each accounting period. 
D) Are carried in the accounting records at current market values,and therefore do not generate gains or losses when sold at market values.

Question 11

A line of credit is an advance agreement by a bank to lend a company any amount of money up to a specified limit.

Accepted Answer

A) True 
 B)False

Question 12

Shrek Cyclery sells a bicycle to W.O'Connor,a customer who uses Empress Charge (a national credit card,but not issued by a bank).In recording this sale,Shrek Cyclery should record:

Accepted Answer

A) An account receivable from W.O'Connor. 
B) A cash receipt. 
C) An account receivable from Empress Charge. 
D) A small increase in the allowance for doubtful accounts. 
A) An account receivable from W.O'Connor. 
B) A cash receipt. 
C) An account receivable from Empress Charge. 
D) A small increase in the allowance for doubtful accounts.

Question 13

The ________ department compares what was shipped with what was ordered and prepares and mails an invoice.

Accepted Answer

A) Customer Order 
B) Billing 
C) Accounting 
D) Credit 
A) Customer Order 
B) Billing 
C) Accounting 
D) Credit

Question 14

Financial assets describe not just cash,but all assets that are easily and directly convertible into known amounts of cash,except marketable securities.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Efficient management of cash includes which of the following concepts?

Accepted Answer

A) Pay each bill as soon as the invoice is received. 
B) Deposit all cash receipts and make all cash disbursements at the end of each week. 
C) Prepare a control listing of cash receipts at the time and place the money is received. 
D) Pay suppliers in cash out of cash sales receipts before depositing them in the bank. 
A) Pay each bill as soon as the invoice is received. 
B) Deposit all cash receipts and make all cash disbursements at the end of each week. 
C) Prepare a control listing of cash receipts at the time and place the money is received. 
D) Pay suppliers in cash out of cash sales receipts before depositing them in the bank.

Question 17

When the maker of a note defaults:

Accepted Answer

A) An account receivable is recorded for the principal amount of the note only. 
B) An account receivable is recorded in the amount of the principal plus interest through the maturity date. 
C) Any interest earned for the current period is not recorded,since the maker has defaulted. 
D) Any interest earned in a previous period that has already been recorded as interest receivable is written off as a loss due to the maker's default. 
A) An account receivable is recorded for the principal amount of the note only. 
B) An account receivable is recorded in the amount of the principal plus interest through the maturity date. 
C) Any interest earned for the current period is not recorded,since the maker has defaulted. 
D) Any interest earned in a previous period that has already been recorded as interest receivable is written off as a loss due to the maker's default.

Question 18

Which of the following is not considered a cash equivalent?

Accepted Answer

A) U.S.Treasury bills 
B) Money market funds 
C) Accounts receivable 
D) High-grade commercial paper 
A) U.S.Treasury bills 
B) Money market funds 
C) Accounts receivable 
D) High-grade commercial paper

Question 19

Dorfmann Industries has an accounts receivable turnover rate of 12.Which of the following statements is not true?

Accepted Answer

A) Dorfmann's accounts receivable are more liquid than those of a business whose accounts receivable turnover rate is 8. 
B) Dorfmann waits approximately 30 days to make collections of its credit sales.(Use 365 days in a year. ) 
C) Dorfmann writes off accounts receivable as uncollectible if they are over 30 days old. 
D) Dorfmann's net credit sales are about twelve times the amount of its average accounts receivable. 
A) Dorfmann's accounts receivable are more liquid than those of a business whose accounts receivable turnover rate is 8. 
B) Dorfmann waits approximately 30 days to make collections of its credit sales.(Use 365 days in a year. ) 
C) Dorfmann writes off accounts receivable as uncollectible if they are over 30 days old. 
D) Dorfmann's net credit sales are about twelve times the amount of its average accounts receivable.

Question 20

To "write-off" an account receivable is to reduce the balance of the customer's account to zero.

Accepted Answer

A) True 
 B)False

Exam 7: Financial Assets

Charges for depositing NSF checks are an example of a transaction that has been recorded by the depositor but may not have been recorded by the bank.

Gold Company received a two-month,12% note for $8,000 on June 16.Which of the following statements is true?

The accounts receivable turnover rate:

In handling of daily cash transactions,a few minor errors inevitably will occur.Which of the following is used to adjust the accounting records for these small errors?

Cash equivalents are the most liquid of all assets.

When preparing a bank reconciliation,outstanding checks will:

Investments in available for sale marketable securities:

A line of credit is an advance agreement by a bank to lend a company any amount of money up to a specified limit.

Shrek Cyclery sells a bicycle to W.O'Connor,a customer who uses Empress Charge (a national credit card,but not issued by a bank).In recording this sale,Shrek Cyclery should record:

The ________ department compares what was shipped with what was ordered and prepares and mails an invoice.

Financial assets describe not just cash,but all assets that are easily and directly convertible into known amounts of cash,except marketable securities.

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

Efficient management of cash includes which of the following concepts?

When the maker of a note defaults:

Which of the following is not considered a cash equivalent?

Dorfmann Industries has an accounts receivable turnover rate of 12.Which of the following statements is not true?

To "write-off" an account receivable is to reduce the balance of the customer's account to zero.

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

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

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters