Question 1

Having a compensating balance increases a company's liquidity.

Accepted Answer

A) True 
 B)False

Question 2

What is a contingent liability, and how does it relate to the discounting of a note receivable at the bank?

Accepted Answer

A contingent liability is a potential li...

Question 3

Under the allowance method, Uncollectible Accounts Expense is recorded when an individual customer defaults.

Accepted Answer

A) True 
 B)False

Question 4

Interest on a 90-day, 10 percent, $10,000 note receivable is

Accepted Answer

A)   $2,500.77.
B)   $288.38.
C)   $246.58.
D)   $1,000.63.E) B) and D)
F) B) and C)

Question 5

On a bank reconciliation, outstanding checks are deducted from the balance per books.

Accepted Answer

A) True 
 B)False

Question 6

Trade credit arises from wholesale or retail sales.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following methods of recording uncollectible accounts expense would be described best as a balance sheet method?

Accepted Answer

A)   Accounts receivable aging method
B)   Percentage of net sales method
C)   Direct charge-off method
D)   Both percentage of net sales method and direct charge-off methodE) All of the above
F) B) and C)

Question 8

Which of the following would not be a valid reason to keep some currency on hand at a place of business?

Accepted Answer

A)   To pay small, unforeseen expenses
B)   To make up for any imbalance in the books
C)   To advance money to sales reps for travel expenses
D)   To provide money for cash registersE) A) and B)
F) C) and D)

Question 9

A company's acceptance of credit cards like Visa is an example of

Accepted Answer

A)   securitization.
B)   factoring with recourse.
C)   discounting.
D)   factoring without recourse.E) A) and C)
F) B) and C)

Question 10

Using the following transactions for 2010, show how the T account below would appear after all appropriate postings have been made. Assume an opening balance of $900.

Accepted Answer

The answer of Using the following transactions for 2010, show...

Question 11

Which of the following would be added to the balance per books on a bank reconciliation?

Accepted Answer

A)   Deposits in transit
B)   Outstanding checks
C)   Service charges
D)   Notes collected by the bankE) A) and B)
F) A) and C)

Question 12

At year end, Gorgin Design Company has a $1,800 credit balance in Allowance for Uncollectible Accounts. If an accounts receiving aging method analysis indicates that an estimated $11,400 of year-end receivables are uncollectible, what will be the balance in Allowance for Uncollectible Accounts after the appropriate adjusting entry for uncollectible accounts has been made? Indicate if the balance is a debit or credit.

Accepted Answer

The answer of At year end, Gorgin Design Company has...

Question 13

The account Allowance for Uncollectible Accounts is classified as a(n)

Accepted Answer

A)   contra account to Uncollectible Accounts Expense.
B)   expense.
C)   liability.
D)   contra account to Accounts Receivable.E) B) and C)
F) All of the above

Question 14

The receivable turnover is expressed in terms of

Accepted Answer

A)   times.
B)   days.
C)   a percentage.
D)   dollars.E) None of the above
F) B) and D)

Question 15

Which of the following would be deducted from the balance per bank?

Accepted Answer

A)   An issued check that the company forgot to record on its books
B)   Bank service charge
C)   Outstanding checks
D)   NSF checkE) None of the above
F) B) and C)

Question 16

Days' sales uncollected equals 365 days divided by

Accepted Answer

A)   net sales.
B)   average net accounts receivable.
C)   net income.
D)   the receivable turnover.E) None of the above
F) A) and C)

Question 17

If the amount of uncollectible accounts expense is understated at year end,

Accepted Answer

A)   net Accounts Receivable will be understated.
B)   total liabilities will be overstated.
C)   net income will be understated.
D)   Allowance for Uncollectible Accounts will be understated.E) All of the above
F) A) and B)

Question 18

The allowance method of handling bad debts violates the matching principle.

Accepted Answer

A) True 
 B)False

Question 19

The balance of Accounts Receivable, net of the allowance account, is $35,000 before the write-off of a $2,800 account. What is the Accounts Receivable balance, net of the allowance account, after the write-off?

Accepted Answer

A)   $35,000
B)   $32,200
C)   $2,800
D)   $37,800E) B) and C)
F) A) and C)

Question 20

Which of the following accounts is classified as a short-term financial asset?

Accepted Answer

A)   Office Supplies
B)   Accounts Receivable
C)   Equipment
D)   Prepaid InsuranceE) A) and D)
F) B) and D)

Exam 9: Cash and Receivables

The allowance method of handling bad debts violates the matching principle.

Correct Answer
verified

What is a contingent liability, and how does it relate to the discounting of a note receivable at the bank?

Correct Answer
verified
A contingent liability is a potential li...
View Answer

Which of the following would be deducted from the balance per bank?

Correct Answer
verified

The receivable turnover is expressed in terms of

Correct Answer
verified

Which of the following would be added to the balance per books on a bank reconciliation?

Correct Answer
verified

On a bank reconciliation, outstanding checks are deducted from the balance per books.

Correct Answer
verified

The balance of Accounts Receivable, net of the allowance account, is $35,000 before the write-off of a $2,800 account. What is the Accounts Receivable balance, net of the allowance account, after the write-off?

Correct Answer
verified

Interest on a 90-day, 10 percent, $10,000 note receivable is

Correct Answer
verified

If the amount of uncollectible accounts expense is understated at year end,

Correct Answer
verified

Which of the following methods of recording uncollectible accounts expense would be described best as a balance sheet method?

Correct Answer
verified

Having a compensating balance increases a company's liquidity.

Correct Answer
verified

Days' sales uncollected equals 365 days divided by

Correct Answer
verified

Using the following transactions for 2010, show how the T account below would appear after all appropriate postings have been made. Assume an opening balance of $900.

Correct Answer
verified

Trade credit arises from wholesale or retail sales.

Correct Answer
verified

The account Allowance for Uncollectible Accounts is classified as a(n)

Correct Answer
verified

Under the allowance method, Uncollectible Accounts Expense is recorded when an individual customer defaults.

Correct Answer
verified

Which of the following accounts is classified as a short-term financial asset?

Correct Answer
verified

Correct Answer
verified

Which of the following would not be a valid reason to keep some currency on hand at a place of business?

Correct Answer
verified

A company's acceptance of credit cards like Visa is an example of

Correct Answer
verified

Exam 9: Cash and Receivables

The allowance method of handling bad debts violates the matching principle.

Correct AnswerverifiedShow Answer

What is a contingent liability, and how does it relate to the discounting of a note receivable at the bank?

Correct AnswerverifiedA contingent liability is a potential li...View AnswerShow Answer

Which of the following would be deducted from the balance per bank?

Correct AnswerverifiedShow Answer

The receivable turnover is expressed in terms of

Correct AnswerverifiedShow Answer

Which of the following would be added to the balance per books on a bank reconciliation?

Correct AnswerverifiedShow Answer

On a bank reconciliation, outstanding checks are deducted from the balance per books.

Correct AnswerverifiedShow Answer

The balance of Accounts Receivable, net of the allowance account, is $35,000 before the write-off of a $2,800 account. What is the Accounts Receivable balance, net of the allowance account, after the write-off?

Correct AnswerverifiedShow Answer

Interest on a 90-day, 10 percent, $10,000 note receivable is

Correct AnswerverifiedShow Answer

If the amount of uncollectible accounts expense is understated at year end,

Correct AnswerverifiedShow Answer

Which of the following methods of recording uncollectible accounts expense would be described best as a balance sheet method?

Correct AnswerverifiedShow Answer

Having a compensating balance increases a company's liquidity.

Correct AnswerverifiedShow Answer

Days' sales uncollected equals 365 days divided by

Correct AnswerverifiedShow Answer

Using the following transactions for 2010, show how the T account below would appear after all appropriate postings have been made. Assume an opening balance of $900.

Correct AnswerverifiedShow Answer

Trade credit arises from wholesale or retail sales.

Correct AnswerverifiedShow Answer

The account Allowance for Uncollectible Accounts is classified as a(n)

Correct AnswerverifiedShow Answer

Under the allowance method, Uncollectible Accounts Expense is recorded when an individual customer defaults.

Correct AnswerverifiedShow Answer

Which of the following accounts is classified as a short-term financial asset?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would not be a valid reason to keep some currency on hand at a place of business?

Correct AnswerverifiedShow Answer

A company's acceptance of credit cards like Visa is an example of

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
A contingent liability is a potential li...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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