Question 1

Accounts receivable usually are factored

Accepted Answer

A)  with recourse on a notification basis. 
B)  with recourse on a no-notification basis. 
C)  without recourse on a notification basis. 
D)  without recourse on a no-notification basis. 
A)  with recourse on a notification basis. 
B)  with recourse on a no-notification basis. 
C)  without recourse on a notification basis. 
D)  without recourse on a no-notification basis. C

Question 2

The following information is available for Longview Company:   As a result of a review and aging of accounts receivable,it has been determined that the Allowance for Doubtful Accounts should show a balance of $2,400 at December 31,2014.What amount should Longview record as bad debt expense for the year ended December 31,2014?

Accepted Answer

A)  $2,500 
B)  $1,300 
C)  $2,400 
D)  $3,700 
A)  $2,500 
B)  $1,300 
C)  $2,400 
D)  $3,700 A

Question 3

Donovan Company had the following cash balances at December 31,2014:   Cash in banks includes $125,000 of compensating balances against short-term borrowing arrangements at December 31,2014.The compensating balances are legally restricted as to withdrawal by Donovan.In the current asset section of Donovan's December 31,2014,balance sheet,what total amount should be reported as Cash?

Accepted Answer

A)  $380,000 
B)  $375,000 
C)  $255,000 
D)  $250,000 
A)  $380,000 
B)  $375,000 
C)  $255,000 
D)  $250,000 C

Question 4

On August 1,a firm assigned $30,000 of its $56,000 of accounts receivable.The finance company advanced 90% of the assigned accounts less a $2,000 fee.Interest is 12% and payable monthly on the beginning-of-period loan balance.A loan payment is remitted at the end of each month.Each payment includes principal and interest.The amount of each loan payment equals the cash collected on receivables during the month plus interest on the loan balance. If $8,000 was collected on accounts receivable during August,the entry for the first loan payment would include a

Accepted Answer

A)  debit to Interest Expense of $280. 
B)  credit to Cash of $8,000. 
C)  credit to Account Receivable Assigned of $8,000. 
D)  debit to Notes Payable of $8,280. 
A)  debit to Interest Expense of $280. 
B)  credit to Cash of $8,000. 
C)  credit to Account Receivable Assigned of $8,000. 
D)  debit to Notes Payable of $8,280.

Question 5

In preparing its bank reconciliation for the month of February,Vance Company has available the following information:   What is the corrected cash balance at February 28?

Accepted Answer

A)  $18,125 
B)  $18,150 
C)  $18,275 
D)  $18,400 
A)  $18,125 
B)  $18,150 
C)  $18,275 
D)  $18,400

Question 6

Corbin Company has two checking accounts.A special account is used for the weekly payroll only,and the general account is used for all other disbursements.Every week,a check in the amount of the net payroll is drawn on the general account and deposited in the payroll account.The company maintains a $5,000 minimum balance in the payroll account.On a monthly bank reconciliation,the payroll account should

Accepted Answer

A)  reconcile to $5,000. 
B)  show a zero balance per the bank statement. 
C)  show a $5,000 balance per the bank statement. 
D)  be reconciled jointly with the general account in a single reconciliation. 
A)  reconcile to $5,000. 
B)  show a zero balance per the bank statement. 
C)  show a $5,000 balance per the bank statement. 
D)  be reconciled jointly with the general account in a single reconciliation.

Question 7

Which of the following would be considered part of the category "trade receivables"?

Accepted Answer

A)  Advances to employees 
B)  Amounts due from customers 
C)  Dividends receivable 
D)  Income tax refunds receivable 
A)  Advances to employees 
B)  Amounts due from customers 
C)  Dividends receivable 
D)  Income tax refunds receivable

Question 8

Halen Company factored $50,000 of its accounts receivable with recourse.The factor retained 8% for sales adjustments and charged $3,000 as a financing fee.For simplicity,assume the estimated and actual amounts of the following items are equal: Sales adjustments $2,500
Uncollectible accounts 500
Assume the transfer is recorded as a sale by Halen Company.What is the loss or financing expense to be recognized on the transfer?

Accepted Answer

A)  $11,000 
B)  $6,000 
C)  $3,000 
D)  $8,000 
A)  $11,000 
B)  $6,000 
C)  $3,000 
D)  $8,000

Question 9

Which of the following is NOT correct?

Accepted Answer

A)  The operating cycle sometimes is longer than one year in duration. 
B)  The operating cycle always is one year in duration. 
C)  The operating cycle sometimes is shorter than one year in duration. 
D)  The operating cycle is a concept applicable both to manufacturing and retailing enterprises. 
A)  The operating cycle sometimes is longer than one year in duration. 
B)  The operating cycle always is one year in duration. 
C)  The operating cycle sometimes is shorter than one year in duration. 
D)  The operating cycle is a concept applicable both to manufacturing and retailing enterprises.

Question 10

Abe Company sold merchandise on credit to Bee Company for $1,000 on July 1,with terms of 2/10,net /30.On July 6,Bee returned $200 worth of merchandise claiming the materials were defective.On July 8,Abe received a payment from Bee and credited Accounts Receivable for $350.On July 24,Bee Company paid the remaining balance on its account.
-See Abe Company information above.What was the total cash received from Bee during July?

Accepted Answer

A)  $441 
B)  $450 
C)  $793 
D)  $800 
A)  $441 
B)  $450 
C)  $793 
D)  $800

Question 11

Based on the aging of its accounts receivable at December 31,Quanto Company determined that the net realizable value of the receivables at that date is $760,000.Additional information is as follows:   Quanto's doubtful accounts expense for the year ended December 31 is

Accepted Answer

A)  $80,000. 
B)  $96,000. 
C)  $120,000. 
D)  $160,000. 
A)  $80,000. 
B)  $96,000. 
C)  $120,000. 
D)  $160,000.

Question 12

Teeming Company uses the allowance method of accounting for bad debts.The following summary schedule was prepared from an aging of accounts receivable outstanding on December 31 of the current year.
   The following additional information is available for the current year:
  
-See Teeming Company information above.If Teeming bases its estimate of bad debts on the aging of accounts receivable,doubtful accounts expense for the current year ending December 31 is

Accepted Answer

A)  $47,000. 
B)  $48,000. 
C)  $50,000. 
D)  $54,000. 
A)  $47,000. 
B)  $48,000. 
C)  $50,000. 
D)  $54,000.

Question 13

For tax purposes,an entry should be made to Bad Debt Expense

Accepted Answer

A)  when an account is determined to be uncollectible. 
B)  in the period in which the sale that created the receivable was made. 
C)  when an account determined to be uncollectible is collected. 
D)  when an account with terms 2/10,n30 is still unpaid after thirty days. 
A)  when an account is determined to be uncollectible. 
B)  in the period in which the sale that created the receivable was made. 
C)  when an account determined to be uncollectible is collected. 
D)  when an account with terms 2/10,n30 is still unpaid after thirty days.

Question 14

The books of Barry's Service,Inc.disclosed a cash balance of $68,757 on June 30.The bank statement as of June 30 showed a balance of $54,780.Additional information that might be useful in reconciling the two balances follows:
   Prepare a bank reconciliation statement,using the form reconciling bank and book balances to the correct cash balance.

Accepted Answer

The answer of The books of Barry's Service,Inc.disclosed a cash...

Question 15

Eastern Company sells products covered by a 3-year warranty.Based on past experience of other entities in the industry,Eastern expects to incur warranty costs equal to 1% of sales.Eastern's sales were $45,000 in 2013 and $50,000 in 2014.In 2014,the company spent $200 to repair goods sold in 2013 and $300 to repair goods sold in 2014.Eastern received no warranty servicing demands from its customers in 2013,the company's first year of operations. What is the balance in the warranty liability account on January 1,2015?

Accepted Answer

A)  $450 
B)  $500 
C)  $300 
D)  $0 
A)  $450 
B)  $500 
C)  $300 
D)  $0

Question 16

Estimation of uncollectible accounts receivable based on a percentage of sales

Accepted Answer

A)  emphasizes measurement of the net realizable value of accounts receivable. 
B)  is only acceptable for tax purposes. 
C)  emphasizes measurement of total assets. 
D)  emphasizes measurement of bad debt expense. 
A)  emphasizes measurement of the net realizable value of accounts receivable. 
B)  is only acceptable for tax purposes. 
C)  emphasizes measurement of total assets. 
D)  emphasizes measurement of bad debt expense.

Question 17

The Ryan Manufacturing Company received its bank statement for the month ending May 31.The bank statement indicates a balance of $32,400.The cash account as of the close of business on May 31 has a balance of $8,350.In reconciling the balances,the following items are discovered.
   Prepare a bank reconciliation statement.(Use the format of reconciling bank and depositor figures to corrected cash balance. )

Accepted Answer

The answer of The Ryan Manufacturing Company received its bank...

Question 18

When the allowance method of recognizing bad debt expense is used,the entries at the time of collection of a small account previously written off would

Accepted Answer

A)  increase net income. 
B)  increase the allowance for doubtful accounts. 
C)  decrease net income. 
D)  decrease the allowance for doubtful accounts. 
A)  increase net income. 
B)  increase the allowance for doubtful accounts. 
C)  decrease net income. 
D)  decrease the allowance for doubtful accounts.

Question 19

The information below is from the books of the Pawnee Corporation on June 30:
   Assuming no errors were made,compute the cash balance per books on June 30 before any reconciliation adjustments.

Accepted Answer

The answer of The information below is from the books...

Question 20

The following information was abstracted from the 2014 financial statements of Keller Company:
   Prepare the adjusting entry for doubtful accounts expense under each of the following assumptions:

Accepted Answer

The answer of The following information was abstracted from the...

Accounts receivable usually are factored

In preparing its bank reconciliation for the month of February,Vance Company has available the following information: What is the corrected cash balance at February 28?

Which of the following would be considered part of the category "trade receivables"?

Which of the following is NOT correct?

Based on the aging of its accounts receivable at December 31,Quanto Company determined that the net realizable value of the receivables at that date is $760,000.Additional information is as follows: Quanto's doubtful accounts expense for the year ended December 31 is

For tax purposes,an entry should be made to Bad Debt Expense

Estimation of uncollectible accounts receivable based on a percentage of sales

When the allowance method of recognizing bad debt expense is used,the entries at the time of collection of a small account previously written off would

The information below is from the books of the Pawnee Corporation on June 30: Assuming no errors were made,compute the cash balance per books on June 30 before any reconciliation adjustments.

The following information was abstracted from the 2014 financial statements of Keller Company: Prepare the adjusting entry for doubtful accounts expense under each of the following assumptions:

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll, pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters

Exam 7: The Revenuereceivablescash Cycle

Accounts receivable usually are factored

In preparing its bank reconciliation for the month of February,Vance Company has available the following information: What is the corrected cash balance at February 28?

Which of the following would be considered part of the category "trade receivables"?

Which of the following is NOT correct?

Based on the aging of its accounts receivable at December 31,Quanto Company determined that the net realizable value of the receivables at that date is $760,000.Additional information is as follows: Quanto's doubtful accounts expense for the year ended December 31 is

For tax purposes,an entry should be made to Bad Debt Expense

Estimation of uncollectible accounts receivable based on a percentage of sales

When the allowance method of recognizing bad debt expense is used,the entries at the time of collection of a small account previously written off would

The information below is from the books of the Pawnee Corporation on June 30: Assuming no errors were made,compute the cash balance per books on June 30 before any reconciliation adjustments.

The following information was abstracted from the 2014 financial statements of Keller Company: Prepare the adjusting entry for doubtful accounts expense under each of the following assumptions:

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll, pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters