Question 1

Effective internal control over receivables is designed to ensure that customers' payments are promptly deposited.

Accepted Answer

A) True 
 B)False

Question 2

The bookkeeper prepared a check for $68 but accidentally recorded it as $86.When preparing the bank reconciliation,this should be corrected by:

Accepted Answer

A) Adding $18 to the bank balance. 
B) Subtracting $18 from the bank balance. 
C) Adding $18 to the book balance. 
D) Subtracting $18 from the book balance. 
A) Adding $18 to the bank balance. 
B) Subtracting $18 from the bank balance. 
C) Adding $18 to the book balance. 
D) Subtracting $18 from the book balance.

Question 3

[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 income statement approach in estimating uncollectible accounts expense,and uncollectible accounts expense is estimated to be 3% of credit sales.What is the amount of uncollectible accounts expense recognized in Tutor's income statement for March?

Accepted Answer

A) $13,500. 
B) $18,000. 
C) $8,600. 
D) $7,200. 
A) $13,500. 
B) $18,000. 
C) $8,600. 
D) $7,200.

Question 4

Assuming a 365-day year,Gore Industries calculated an average of 53 days to collect its accounts receivable in 2018.During 2018,Gore's accounts receivable turnover rate:

Accepted Answer

A) Was approximately 6.89. 
B) Was equal to 53 times its average accounts receivable. 
C) Was approximately 0.15. 
D) Can't be determined from this information alone. 
A) Was approximately 6.89. 
B) Was equal to 53 times its average accounts receivable. 
C) Was approximately 0.15. 
D) Can't be determined from this information alone.

Question 5

Accounts receivable turnover rate
During 2018,Larsen Company's accounts receivable averaged $750,000.Larsen's 2018 income statement reported net sales of $6,780,000,uncollectible accounts expense of $160,000,and net income of $768,000.(Assume 365 days in a year. )
Using the information,compute the following for Larsen Company:
(a)Accounts receivable turnover: (Round to the nearest two decimals. )
(b)Average number of days to collect accounts receivable
(Round to nearest day,if necessary): (Round to the nearest %. )

Accepted Answer

(a)9.04 times ($6,78

Question 6

Uncollectible accounts-two methods
At the end of the year the unadjusted trial balance of Angel Provisions included the following accounts:
   (a. )If Angel uses the balance sheet approach to estimate uncollectible accounts expense,and aging the accounts receivable indicates the estimated uncollectible portion to be $6,075,what will the uncollectible accounts expense for the year be?
(b. )If the income statement approach to estimating uncollectible accounts expense is followed,and uncollectible accounts expense is estimated to be 1% of net credit sales,what is the amount of uncollectible accounts expense for the year?

Accepted Answer

(a)$6,075 − $1,218 =

Question 7

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 8

In order for a company's accounting records to be up-to-date and accurate after a bank reconciliation has been completed,journal entries should be made for any service charges by the bank and for deposits in transit.

Accepted Answer

A) True 
 B)False

Question 9

Gains (or losses)on sales of marketable securities,as well as any unrealized holding gains (or losses)on investments in available for sale securities,are reported in the income statement.

Accepted Answer

A) True 
 B)False

Question 10

The fair value accounting adjustment:

Accepted Answer

A) Affects both the balance sheet and the current period income statement. 
B) Is not made when the current market value of investments in marketable securities is higher than original cost. 
C) May result in either a gain or a loss to be reported in the current period income statement. 
D) Represents a departure from the cost principle. 
A) Affects both the balance sheet and the current period income statement. 
B) Is not made when the current market value of investments in marketable securities is higher than original cost. 
C) May result in either a gain or a loss to be reported in the current period income statement. 
D) Represents a departure from the cost principle.

Question 11

Financial assets may be current or long-term assets.

Accepted Answer

A) True 
 B)False

Question 12

Uncollectible accounts expense:

Accepted Answer

A) Should not occur if the credit department properly investigates prospective customers who wish to purchase merchandise on credit. 
B) Is the amount of cash a business must pay each time a credit customer fails to pay his or her account. 
C) Is the amount a business must pay to a collection agency to recover amounts on overdue accounts receivable. 
D) Represents the loss in value of accounts receivable that are estimated to be uncollectible. 
A) Should not occur if the credit department properly investigates prospective customers who wish to purchase merchandise on credit. 
B) Is the amount of cash a business must pay each time a credit customer fails to pay his or her account. 
C) Is the amount a business must pay to a collection agency to recover amounts on overdue accounts receivable. 
D) Represents the loss in value of accounts receivable that are estimated to be uncollectible.

Question 13

When interest is collected,it is debited to the Interest Revenue account and credited to the Notes Receivable account.

Accepted Answer

A) True 
 B)False

Question 14

When a bank reconciliation has been satisfactorily completed,the only related entries to be made in the depositor's records are:

Accepted Answer

A) To correct errors made by the bank in recording the dollar amounts of cash transactions during the period. 
B) To reconcile items that explain the difference between the balance per the books and the balance per the bank statement. 
C) To record outstanding checks and bank service charges. 
D) To record items that explain the difference between the balance per the accounting records and the adjusted cash balance. 
A) To correct errors made by the bank in recording the dollar amounts of cash transactions during the period. 
B) To reconcile items that explain the difference between the balance per the books and the balance per the bank statement. 
C) To record outstanding checks and bank service charges. 
D) To record items that explain the difference between the balance per the accounting records and the adjusted cash balance.

Question 15

Internal control over cash transactions
(a. )Describe two measures contributing to strong internal control over cash receipts.
(b. )Describe two measures contributing to effective internal control over cash disbursements.

Accepted Answer

(a)Students may choose two of the follow

Question 16

The aging of the accounts receivable approach to estimating uncollectible accounts does not:

Accepted Answer

A) Take into consideration the existing balance in the Allowance for Doubtful Accounts. 
B) Utilize a percentage of probable uncollectible accounts for each age group of accounts receivable. 
C) Stress the relationship between uncollectible accounts expense and net sales. 
D) Tend to give a reliable estimate of uncollectible accounts because of the consideration given to the collectability of specific accounts receivable. 
A) Take into consideration the existing balance in the Allowance for Doubtful Accounts. 
B) Utilize a percentage of probable uncollectible accounts for each age group of accounts receivable. 
C) Stress the relationship between uncollectible accounts expense and net sales. 
D) Tend to give a reliable estimate of uncollectible accounts because of the consideration given to the collectability of specific accounts receivable.

Question 17

Which of the following items would cause cash per the bank statement to be larger than the balance of cash shown in the accounting records?

Accepted Answer

A) Bank service charges 
B) Deposits in transit 
C) Outstanding checks 
D) NSF check from one of the depositor's customers 
A) Bank service charges 
B) Deposits in transit 
C) Outstanding checks 
D) NSF check from one of the depositor's customers

Question 18

Balance sheet method-computations
Rainbow Company uses the balance sheet approach to estimate uncollectible accounts.By aging the customers' accounts,it was estimated that $7,325 of the company's month-end accounts receivable would prove to be uncollectible.Determine the amount that should be debited to the Uncollectible Accounts Expense account in the month-end adjusting entry under each of the following independent assumptions:
(a. )Before making any adjustment,the Allowance for Doubtful Accounts has
a $635 credit balance.$________
(b. )Before making any adjustment,the Allowance for Doubtful Accounts
has a debit balance of $720.$________

Accepted Answer

(a)Prior to making any adjustment,the Al

Question 19

The unused portion of a line of credit:

Accepted Answer

A) Is reported as a current liability in the balance sheet. 
B) Decreases a company's liquidity. 
C) Can be used at any time by drawing a check on a special bank account. 
D) Requires a compensating balance in order to keep the line of credit open. 
A) Is reported as a current liability in the balance sheet. 
B) Decreases a company's liquidity. 
C) Can be used at any time by drawing a check on a special bank account. 
D) Requires a compensating balance in order to keep the line of credit open.

Question 20

When preparing a bank reconciliation,deposits in transit 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.

Exam 7: Financial Assets

Effective internal control over receivables is designed to ensure that customers' payments are promptly deposited.

The bookkeeper prepared a check for $68 but accidentally recorded it as $86.When preparing the bank reconciliation,this should be corrected by:

Assuming a 365-day year,Gore Industries calculated an average of 53 days to collect its accounts receivable in 2018.During 2018,Gore's accounts receivable turnover rate:

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. )

In order for a company's accounting records to be up-to-date and accurate after a bank reconciliation has been completed,journal entries should be made for any service charges by the bank and for deposits in transit.

Gains (or losses)on sales of marketable securities,as well as any unrealized holding gains (or losses)on investments in available for sale securities,are reported in the income statement.

The fair value accounting adjustment:

Financial assets may be current or long-term assets.

Uncollectible accounts expense:

When interest is collected,it is debited to the Interest Revenue account and credited to the Notes Receivable account.

When a bank reconciliation has been satisfactorily completed,the only related entries to be made in the depositor's records are:

Internal control over cash transactions (a. )Describe two measures contributing to strong internal control over cash receipts. (b. )Describe two measures contributing to effective internal control over cash disbursements.

The aging of the accounts receivable approach to estimating uncollectible accounts does not:

Which of the following items would cause cash per the bank statement to be larger than the balance of cash shown in the accounting records?

The unused portion of a line of credit:

When preparing a bank reconciliation,deposits in transit will:

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

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