Question 1

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 2

Silver Company received a two-month,6% note for $16,000 on August 5.Which of the following statements is true?

Accepted Answer

A) Silver will receive $16,000 plus interest of $960 at maturity. 
B) Silver should record a total receivable due of $16,080 on August 5. 
C) The principal of the note plus interest is due on October 15. 
D) The maturity value of this note is $16,160. 
A) Silver will receive $16,000 plus interest of $960 at maturity. 
B) Silver should record a total receivable due of $16,080 on August 5. 
C) The principal of the note plus interest is due on October 15. 
D) The maturity value of this note is $16,160.

Question 3

J.Lennon borrows a sum of money from Y.Ono.A promissory note is used to document the terms of the transaction.In this situation:

Accepted Answer

A) J.Lennon is considered the maker of the note. 
B) J.Lennon is considered the payee of the note. 
C) J.Lennon records the note as an asset in his accounting records. 
D) The maker of the note could be either Y.Ono or J.Lennon depending on which party actually draws up the document. 
A) J.Lennon is considered the maker of the note. 
B) J.Lennon is considered the payee of the note. 
C) J.Lennon records the note as an asset in his accounting records. 
D) The maker of the note could be either Y.Ono or J.Lennon depending on which party actually draws up the document.

Question 4

In general,the longer an account receivable is outstanding,the greater the likelihood it will be collected.

Accepted Answer

A) True 
 B)False

Question 5

If a 15%,two-month note receivable is acquired from a customer in settlement of an existing account receivable of $5,000,the accounting entry for acquisition of the note will:

Accepted Answer

A) Include a debit to Notes Receivable for $5,750. 
B) Include a debit to Notes Receivable for $5,062.50. 
C) Include a credit to Interest Revenue for $62.50. 
D) Include a debit to Notes Receivable for $5,000 and no entry for interest. 
A) Include a debit to Notes Receivable for $5,750. 
B) Include a debit to Notes Receivable for $5,062.50. 
C) Include a credit to Interest Revenue for $62.50. 
D) Include a debit to Notes Receivable for $5,000 and no entry for interest.

Question 6

[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 adjusted cash balance in the September 30 bank reconciliation?

Accepted Answer

A) $16,237. 
B) $12,580. 
C) $9,513. 
D) $5,856. 
A) $16,237. 
B) $12,580. 
C) $9,513. 
D) $5,856.

Question 7

Randall,Inc.uses the allowance method supported by an aging of its accounts receivable to recognize uncollectible accounts expense in its financial statements.What method of recognizing this expense does Randall use in its income tax return?

Accepted Answer

A) It must use the same method. 
B) The direct write-off method. 
C) Either the balance sheet or income statement approach is acceptable. 
D) None,since uncollectible accounts expense is not deductible for income tax purposes. 
A) It must use the same method. 
B) The direct write-off method. 
C) Either the balance sheet or income statement approach is acceptable. 
D) None,since uncollectible accounts expense is not deductible for income tax purposes.

Question 8

Taylor,Inc.had accounts receivable of $310,000 and an allowance for doubtful accounts of $19,500 just before writing off as worthless an account receivable from Burton Company of $1,300.The net realizable value of the accounts receivable before and after the write-off were:

Accepted Answer

A) $290,500 before and $289,200 after. 
B) $290,500 before and $290,500 after. 
C) $310,000 before and $308,700 after. 
D) $329,500 before and $328,200 after. 
A) $290,500 before and $289,200 after. 
B) $290,500 before and $290,500 after. 
C) $310,000 before and $308,700 after. 
D) $329,500 before and $328,200 after.

Question 9

Fisher Corporation invested $320,000 cash in available-for-sale marketable securities in early December.On December 31,the quoted market price for these securities is $337,000.Which of the following statements is correct?

Accepted Answer

A) Fisher's December income statement includes a $17,000 gain on investments. 
B) If Fisher sells these investments on January 2 for $300,000,it will report a loss of $37,000. 
C) Fisher's December 31 balance sheet reports marketable securities at $320,000 and an unrealized holding gain on investments of $17,000. 
D) Fisher's December 31 balance sheet reports marketable securities at $337,000 and an unrealized holding gain on investments of $17,000. 
A) Fisher's December income statement includes a $17,000 gain on investments. 
B) If Fisher sells these investments on January 2 for $300,000,it will report a loss of $37,000. 
C) Fisher's December 31 balance sheet reports marketable securities at $320,000 and an unrealized holding gain on investments of $17,000. 
D) Fisher's December 31 balance sheet reports marketable securities at $337,000 and an unrealized holding gain on investments of $17,000.

Question 10

Which of the following items on a bank reconciliation would have been known to the depositor before the bank statement arrived?

Accepted Answer

A) Bank service charges 
B) An NSF check 
C) A credit for interest earned 
D) A deposit in transit 
A) Bank service charges 
B) An NSF check 
C) A credit for interest earned 
D) A deposit in transit

Question 11

As of December 31,2018,Valley Company has $16,920 cash in its checking account,as well as several other items listed below:   What amount should be shown in Valley's December 31,2018,balance sheet as "Cash and cash equivalents"?

Accepted Answer

A) $53,200 
B) $70,120 
C) $130,120 
D) $113,200 
A) $53,200 
B) $70,120 
C) $130,120 
D) $113,200

Question 12

In regard to the accounts receivable turnover rate:

Accepted Answer

A) The higher the better. 
B) The lower the better. 
C) In some industries it is better higher and in some industries it is better to be lower. 
D) The auto industry prefers a lower rate. 
A) The higher the better. 
B) The lower the better. 
C) In some industries it is better higher and in some industries it is better to be lower. 
D) The auto industry prefers a lower rate.

Question 13

Under the allowance method,when a receivable that had been previously written off is collected:

Accepted Answer

A) Income is recognized. 
B) An expense is reduced. 
C) Net income is not affected. 
D) Net assets are increased. 
A) Income is recognized. 
B) An expense is reduced. 
C) Net income is not affected. 
D) Net assets are increased.

Question 14

Bank reconciliation-computations and journal entry
The Cash account in the ledger of Pine Golf Club shows a balance of $11,925 at December 31,2018.The December 31 bank statement shows a balance of $10,440.The only reconciling items consist of:
Bank service charges of $32.
Deposit in transit of $1,813.
NSF check from customer L.Diamond in the amount of $126.
Error in recording check no.970 for utilities: check was written in the amount of $834 but was recorded in Pine's accounting records as $384.
Outstanding checks.
(a)What is the amount of the adjusted cash balance at December 31,2018?
$________
(b)What is the total amount of outstanding checks at December 31,2018?
$________
(c)Record the journal entry necessary,if any,to adjust Pine's Golf Club accounting records at December 31,2018.(An explanation is not required;a single compound journal entry is acceptable. )

Accepted Answer

(a)Adjusted cash balance on Dec.31,2018:

Question 15

Stanley,Inc.'s 2018 income statement reported net sales of $6,000,000,uncollectible accounts expense of $160,000,and net income of $700,000.Stanley's average accounts receivable during 2018 amounted to $1,200,000.Using 360 days to a year,Stanley's

Accepted Answer

A) Accounts receivable turnover rate is approximately 4.4 times. 
B) Accounts receivable turnover rate is approximately 2.5 times. 
C) Average number of days to collect an account receivable is 72 days. 
D) Accounts receivable turnover rate is approximately 2 times. 
A) Accounts receivable turnover rate is approximately 4.4 times. 
B) Accounts receivable turnover rate is approximately 2.5 times. 
C) Average number of days to collect an account receivable is 72 days. 
D) Accounts receivable turnover rate is approximately 2 times.

Question 16

A bank statement shows a balance of $8,445 at June 30.The bank reconciliation is prepared and includes outstanding checks of $2,790,deposits in transit of $1,350,and a bank service charge of $30.Among the paid checks returned by the bank was check no.900 in the amount of $600,which the company had erroneously recorded in the accounting records as $60.The "adjusted cash balance" at June 30 is:

Accepted Answer

A) $6,975. 
B) $6,465. 
C) $7,005. 
D) $7,575. 
A) $6,975. 
B) $6,465. 
C) $7,005. 
D) $7,575.

Question 17

All the following are steps included in the preparation of the bank reconciliation except:

Accepted Answer

A) Comparing deposits listed on the bank statement with the deposits shown in the accounting records. 
B) Comparing checks listed on the bank statement with corresponding entries in the accounting records. 
C) Deducting any debit memoranda from the balance on the bank statement. 
D) Preparing journal entries for any adjustments to the depositor's records. 
A) Comparing deposits listed on the bank statement with the deposits shown in the accounting records. 
B) Comparing checks listed on the bank statement with corresponding entries in the accounting records. 
C) Deducting any debit memoranda from the balance on the bank statement. 
D) Preparing journal entries for any adjustments to the depositor's records.

Question 18

Short-term investments in marketable securities may not be reported in the balance sheet at values higher than original cost.

Accepted Answer

A) True 
 B)False

Question 19

When determining the uncollectible accounts expense in computing taxable income,income tax regulations:

Accepted Answer

A) Require the allowance method. 
B) Require the direct write-off method. 
C) Require the income statement approach. 
D) Require the same method be used for both tax and financial statement purposes. 
A) Require the allowance method. 
B) Require the direct write-off method. 
C) Require the income statement approach. 
D) Require the same method be used for both tax and financial statement purposes.

Question 20

An unrealized holding loss on available-for-sale securities will reduce net income.

Accepted Answer

A) True 
 B)False

Exam 7: Financial Assets

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

Silver Company received a two-month,6% note for $16,000 on August 5.Which of the following statements is true?

J.Lennon borrows a sum of money from Y.Ono.A promissory note is used to document the terms of the transaction.In this situation:

In general,the longer an account receivable is outstanding,the greater the likelihood it will be collected.

If a 15%,two-month note receivable is acquired from a customer in settlement of an existing account receivable of $5,000,the accounting entry for acquisition of the note will:

Randall,Inc.uses the allowance method supported by an aging of its accounts receivable to recognize uncollectible accounts expense in its financial statements.What method of recognizing this expense does Randall use in its income tax return?

Taylor,Inc.had accounts receivable of $310,000 and an allowance for doubtful accounts of $19,500 just before writing off as worthless an account receivable from Burton Company of $1,300.The net realizable value of the accounts receivable before and after the write-off were:

Fisher Corporation invested $320,000 cash in available-for-sale marketable securities in early December.On December 31,the quoted market price for these securities is $337,000.Which of the following statements is correct?

Which of the following items on a bank reconciliation would have been known to the depositor before the bank statement arrived?

As of December 31,2018,Valley Company has $16,920 cash in its checking account,as well as several other items listed below: What amount should be shown in Valley's December 31,2018,balance sheet as "Cash and cash equivalents"?

In regard to the accounts receivable turnover rate:

Under the allowance method,when a receivable that had been previously written off is collected:

Stanley,Inc.'s 2018 income statement reported net sales of $6,000,000,uncollectible accounts expense of $160,000,and net income of $700,000.Stanley's average accounts receivable during 2018 amounted to $1,200,000.Using 360 days to a year,Stanley's

All the following are steps included in the preparation of the bank reconciliation except:

Short-term investments in marketable securities may not be reported in the balance sheet at values higher than original cost.

When determining the uncollectible accounts expense in computing taxable income,income tax regulations:

An unrealized holding loss on available-for-sale securities will reduce net income.

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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