Question 1

Which of the following items would be added to the book balance on a bank reconciliation?

Accepted Answer

A)  Outstanding checks 
B)  A check written for $96 entered as $69 in the accounting records 
C)  Interest paid by the bank 
D)  Deposits in transit 
A)  Outstanding checks 
B)  A check written for $96 entered as $69 in the accounting records 
C)  Interest paid by the bank 
D)  Deposits in transit

Question 2

When the direct write-off method of recognizing bad debt expense is used,the entry to write off a specific customer account would

Accepted Answer

A)  increase net income. 
B)  have no effect on net income. 
C)  increase the accounts receivable balance and increase net income. 
D)  decrease the accounts receivable balance and decrease net income. 
A)  increase net income. 
B)  have no effect on net income. 
C)  increase the accounts receivable balance and increase net income. 
D)  decrease the accounts receivable balance and decrease net income.

Question 3

The following information is available for Closer Company relative to 2014 operations:   What is Closer Company's accounts receivable balance at December 31,2014?

Accepted Answer

A)  $82,000 
B)  $62,000 
C)  $20,000 
D)  $146,000 
A)  $82,000 
B)  $62,000 
C)  $20,000 
D)  $146,000

Question 4

An analysis and aging of the accounts receivable of Mahi Company at December 31 revealed the following data:   The net realizable value of the accounts receivable at December 31 should be

Accepted Answer

A)  $450,000. 
B)  $443,000. 
C)  $425,000. 
D)  $418,000. 
A)  $450,000. 
B)  $443,000. 
C)  $425,000. 
D)  $418,000.

Question 5

When the allowance method of recognizing bad debt expense is used,the entry to record the write-off of a specific uncollectible account would decrease

Accepted Answer

A)  allowance for doubtful accounts. 
B)  net income. 
C)  net realizable value of accounts receivable. 
D)  working capital. 
A)  allowance for doubtful accounts. 
B)  net income. 
C)  net realizable value of accounts receivable. 
D)  working capital.

Question 6

Foreman Company sells specialized machinery and equipment.On January 1,2014,the company sold equipment and received a two-year,$10,000 note with a 3 percent stated interest rate.Interest is payable each December 31,and the entire principal is payable December 31,2015.
The equipment does not have a readily established market value.The market rate of interest for notes of this type and level of risk is 10 percent.
-See Foreman Company information above.
Required:
Prepare the entries on Foreman Company's books to record the sale of the equipment.

Accepted Answer

Accounting Principles Board Opinion No.2

Question 7

Which of the following factors are used to compute the number of days' sales in accounts receivable?

Accepted Answer

A)  Inventory turnover and 365 days 
B)  Accounts receivable turnover and 365 days 
C)  Net sales and average inventory 
D)  Average accounts receivable and cost of goods sold 
A)  Inventory turnover and 365 days 
B)  Accounts receivable turnover and 365 days 
C)  Net sales and average inventory 
D)  Average accounts receivable and cost of goods sold

Question 8

An analysis and aging of accounts receivable of the Gibson Company at December 31,2014,showed the following:   Compute the net realizable value of the accounts receivable of Gibson Company at December 31,2014.

Accepted Answer

A)  $804,000 
B)  $799,200 
C)  $723,200 
D)  $727,200 
A)  $804,000 
B)  $799,200 
C)  $723,200 
D)  $727,200

Question 9

Which of the following is NOT acceptable in estimating uncollectible accounts receivable under GAAP?

Accepted Answer

A)  The estimate of uncollectible accounts is based on a percentage of sales for the period. 
B)  The estimate of uncollectible accounts is based on a percentage of the accounts receivable balance at the end of a period. 
C)  The estimate of uncollectible accounts is based on an aging schedule. 
D)  No estimate of uncollectible accounts is made;accounts are written off when it is determined they cannot be collected. 
A)  The estimate of uncollectible accounts is based on a percentage of sales for the period. 
B)  The estimate of uncollectible accounts is based on a percentage of the accounts receivable balance at the end of a period. 
C)  The estimate of uncollectible accounts is based on an aging schedule. 
D)  No estimate of uncollectible accounts is made;accounts are written off when it is determined they cannot be collected.

Question 10

Bank statements provide information about all of the following except

Accepted Answer

A)  checks cleared during the period. 
B)  NSF checks. 
C)  bank charges for the period. 
D)  errors made by the company. 
A)  checks cleared during the period. 
B)  NSF checks. 
C)  bank charges for the period. 
D)  errors made by the company.

Question 11

For the month of December,the records of Former Corporation show the following information:   The corporation uses the direct write-off method in accounting for uncollectible accounts receivable.What are the gross sales for the month of December?

Accepted Answer

A)  $144,000 
B)  $130,000 
C)  $118,000 
D)  $120,000 
A)  $144,000 
B)  $130,000 
C)  $118,000 
D)  $120,000

Question 12

In preparing a monthly bank reconciliation,which of the following items would be added to the balance reported on the bank statement to arrive at the correct cash balance?

Accepted Answer

A)  Outstanding checks 
B)  Bank service charge 
C)  Deposits in transit 
D)  A customer's note collected by the bank on behalf of the depositor 
A)  Outstanding checks 
B)  Bank service charge 
C)  Deposits in transit 
D)  A customer's note collected by the bank on behalf of the depositor

Question 13

The accountant for the Teffen Company assembled the following data:
     Prepare a 4-column bank reconciliation as of July 31,using the form that reconciles both the book and bank balances to a correct cash amount.

Accepted Answer

The answer of The accountant for the Teffen Company assembled...

Question 14

A new product introduced by Sunbound Promotions carries a two-year warranty against defects.The estimated warranty costs related to dollar sales are as follows:   Sales and actual warranty expenditures for the years ended December 31,2013 and 2014,are as follows:
  What amount should Sunbound report as its estimated liability as of December 31,2014?

Accepted Answer

A)  $4,000 
B)  $24,000 
C)  $56,000 
D)  $74,000 
A)  $4,000 
B)  $24,000 
C)  $56,000 
D)  $74,000

Which of the following items would be added to the book balance on a bank reconciliation?

When the direct write-off method of recognizing bad debt expense is used,the entry to write off a specific customer account would

The following information is available for Closer Company relative to 2014 operations: What is Closer Company's accounts receivable balance at December 31,2014?

An analysis and aging of the accounts receivable of Mahi Company at December 31 revealed the following data: The net realizable value of the accounts receivable at December 31 should be

When the allowance method of recognizing bad debt expense is used,the entry to record the write-off of a specific uncollectible account would decrease

Which of the following factors are used to compute the number of days' sales in accounts receivable?

An analysis and aging of accounts receivable of the Gibson Company at December 31,2014,showed the following: Compute the net realizable value of the accounts receivable of Gibson Company at December 31,2014.

Which of the following is NOT acceptable in estimating uncollectible accounts receivable under GAAP?

Bank statements provide information about all of the following except

For the month of December,the records of Former Corporation show the following information: The corporation uses the direct write-off method in accounting for uncollectible accounts receivable.What are the gross sales for the month of December?

In preparing a monthly bank reconciliation,which of the following items would be added to the balance reported on the bank statement to arrive at the correct cash balance?

The accountant for the Teffen Company assembled the following data: Prepare a 4-column bank reconciliation as of July 31,using the form that reconciles both the book and bank balances to a correct cash amount.

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

Which of the following items would be added to the book balance on a bank reconciliation?

When the direct write-off method of recognizing bad debt expense is used,the entry to write off a specific customer account would

The following information is available for Closer Company relative to 2014 operations: What is Closer Company's accounts receivable balance at December 31,2014?

An analysis and aging of the accounts receivable of Mahi Company at December 31 revealed the following data: The net realizable value of the accounts receivable at December 31 should be

When the allowance method of recognizing bad debt expense is used,the entry to record the write-off of a specific uncollectible account would decrease

Which of the following factors are used to compute the number of days' sales in accounts receivable?

An analysis and aging of accounts receivable of the Gibson Company at December 31,2014,showed the following: Compute the net realizable value of the accounts receivable of Gibson Company at December 31,2014.

Which of the following is NOT acceptable in estimating uncollectible accounts receivable under GAAP?

Bank statements provide information about all of the following except

For the month of December,the records of Former Corporation show the following information: The corporation uses the direct write-off method in accounting for uncollectible accounts receivable.What are the gross sales for the month of December?

In preparing a monthly bank reconciliation,which of the following items would be added to the balance reported on the bank statement to arrive at the correct cash balance?

The accountant for the Teffen Company assembled the following data: Prepare a 4-column bank reconciliation as of July 31,using the form that reconciles both the book and bank balances to a correct cash amount.

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