ACC 301: Chapter 6 (theory)

Questão 1 de 45

1

Which of the following items may be confused with cash but is normally categorized under a different balance sheet caption (not categorized as cash)?

Selecione uma das seguintes:

Foreign currency on deposit in a foreign bank.
Un-deposited credit card sales receipts.
Postdated checks.
Negotiable checks.

Explicação

Questão 2 de 45

1

The definition of cash equivalents includes:

I. available to pay current obligations
II. short-term, highly liquid investments

III. so near maturity that there is little risk of changes in value because of changes in interest rates

Selecione uma das seguintes:

I and II.
II and III.
I, II, and III.
I and III.

Explicação

Questão 3 de 45

1

Which of the following is an important element of internal control over cash?

Selecione uma das seguintes:

They are required for all companies.
They include a petty cash system.
They guarantee that a company's financial reports are reliable.
All of the choices are correct regarding internal controls.

Explicação

Questão 4 de 45

1

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Non-trade receivables include ( deposits with utilities, notes receivable, accounts receivable ) while trade receivables include ( accounts receivable, advances to employees, loans made by nonfinancial companies ).

Explicação

Questão 5 de 45

1

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Revenue recognition criteria include ( realization must have occurred, readily available for general use ) and ( must be earned, not bound by any restrictions ) which result in revenue generally being recognized when ( the product or service is delivered, all defective items have been returned ).

Explicação

Questão 6 de 45

1

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Cash (sales) discounts ( induce prompt payment, are price reductions for large purchases, hide real prices from competitors ) and are recorded using either the gross price method or the net price method.

Explicação

Questão 7 de 45

1

When a company records accounts receivable using the gross price method and the customer pays and takes advantage of the discount, which of the following is true?

Selecione uma das seguintes:

The company records accounts receivable and sales at the net invoice price and no further adjustment is required.
No adjustment is needed because the amount of cash received is equal to the recorded amount of the receivable.
The company credits an account entitled Sales Discounts Not Taken.
The difference between the cash received and the original amount of accounts receivable is recorded as a debit to Sales Discounts Taken.

Explicação

Questão 8 de 45

1

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A ( sales allowance, cash discount, sales return ) occurs when a customer retains defective goods; conceptually, the company should estimate and record in the period of sale so as to properly report sales revenue and ending accounts receivable.

Explicação

Questão 9 de 45

1

Which of the following statements is correct with regard to the direct write-off method?

I. Allows the manipulation of income.
II. Is simple to apply.

Selecione uma das seguintes:

I only.
II only.
I and II
Neither I nor II

Explicação

Questão 10 de 45

1

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Using the ( % of outstanding accounts receivable, direct write-off, % of credit sales ) approach, a company considers the existing balance in the allowance account and records bad debt expense as the amount necessary to adjust the allowance to its desired balance.

Explicação

Questão 11 de 45

1

The net realizable value of a company's accounts receivable is the balance of the accounts receivable account

I. Plus the allowance for sales returns
II. Minus the allowance for doubtful accounts
III. Plus deferred gross profit
IV. Minus allowance for sales discounts

Selecione uma das seguintes:

I, II, and III
II and IV
II, III, and IV
I, II, III, and IV

Explicação

Questão 12 de 45

1

What method of bad debt estimation categorizes individual accounts receivable based on the length of time outstanding? Why is this length of time an important factor?

Selecione uma das seguintes:

Aging is based on the fact that credit risk tends to decrease with the age of the account receivable.
A company that "ages" its accounts receivable first classifies the individual accounts receivable based on the length of time they have been outstanding and then estimates the allowance for bad debts by applying appropriate bad debts percentages to each age category.
Aging is a relatively simple balance sheet approach which bases the estimated expense on the historical relationship between the actual bad debts and the outstanding accounts receivable balance at the end of the year.
All of the choices are correct regarding aging of accounts receivable.

Explicação

Questão 13 de 45

1

When accounts receivable are sold or factored

Selecione uma das seguintes:

the transaction is accounted for as a lending agreement.
the transferor records a gain or loss.
the creditor can require the amounts collected from the accounts receivable be used to repay the amount owed.
the proceeds from the transfer of financial assets are recorded as a liability.

Explicação

Questão 14 de 45

1

Accounts receivable are considered sold when

I. the transferred assets are put beyond the reach of the transferor.
II. the transferee has the right to sell the transferred assets.
III. the transferee has recourse against the transferor.
IV. the transferor does not maintain effective control over the transferred assets.

Selecione uma das seguintes:

I, II, III, and IV.
I, III, and IV.
I, II, and III.
I, II, and IV

Explicação

Questão 15 de 45

1

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Unlike accounts receivable, notes receivable ( are negotiable, arise from the company's operations ) and usually ( involve interest, are grouped as trade or nontrade in the ).

Explicação

Questão 16 de 45

1

Sally Company accepted a 3-month, non-interest-bearing note receivable on December 1. If Sally's year end is December 31, what entry would be recorded

Selecione uma das seguintes:

debit Cash and credit Interest Revenue.
debit Interest Expense and credit Cash.
debit Discount on Note Receivable and credit Interest Revenue.
debit Interest Expense and credit Discount on Note Receivable.

Explicação

Questão 17 de 45

1

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If a note is ( transferred with recourse, assigned ), the company reports a(n) ( liability, expense ) at the estimated amount it would have to pay the buyer.

Explicação

Questão 18 de 45

1

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When a note receivable is transferred, the cash proceeds equal the ( maturity value, present value ) of the note ( less, plus ) a discount. The discount is determined by multiplying the discount rate times the ( maturity value of the note, present value of the note, face value of the note less total intere ) for the discount period.

Explicação

Questão 19 de 45

1

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When financial assets are transferred, U.S. GAAP focuses on whether ( control has been surrendered, an accounting mismatch arises, the seller has transferred risk/rewards ) in determining whether the transfer is accounted for as a secured borrowing or a sale. Under IFRS, the derecognition of a financial asset is based on whether the seller has transferred substantially all the risks and rewards of ownership.

Explicação

Questão 20 de 45

1

Which of the following transactions would not be appropriate for the use of a petty cash system?

Selecione uma das seguintes:

Paying for postage.
Paying cab fare home for late-working employees.
Paying for NSF checks.
Paying for small amounts of office supplies.

Explicação

Questão 21 de 45

1

Why are actual expenses, rather than the petty cash account, debited when the fund is replenished?

Selecione uma das seguintes:

Because the entry records the expenses incurred for the period.
Because this process provides an external, independent control to verify a company's cash balance.
Because the petty cash fund is always carried in the company's accounting records at its current remaining balance.
All of the choices are correct regarding the petty cash account.

Explicação

Questão 22 de 45

1

Differences between the cash balance listed on a company's bank statement and the balance shown in the company's cash account include all of the following except:

Selecione uma das seguintes:

Outstanding checks.
Bank service charge expense.
Recourse liability expense.
Deposits in transit.

Explicação

Questão 23 de 45

1

Which of the following items appearing on a bank reconciliation would require the company to make an adjusting entry?

Selecione uma das seguintes:

Bank service charge.
Deposit in transit
Outstanding checks.
All of the choices would require an adjusting entry.

Explicação

Questão 24 de 45

1

Which of the following items should be classified under the heading of cash on the balance sheet?

Selecione uma ou mais das seguintes:

Explicação

Questão 25 de 45

1

Greenfield Company had the following cash balances at December 31, 2016:

- Cash in banks: $1,300,000
- Petty cash funds (all funds were reimbursed on December 31, 2016): 20,000
- Cash legally restricted for additions to plant (expected to be disbursed in 2018): 2,000,000

Cash in banks includes $300,000 of compensating balances against short-term borrowing arrangements at December 31, 2016. The compensating balances are not legally restricted as to withdrawal by Greenfield.

In the current assets section of Greenfield's December 31, 2016, balance sheet, what total amount should be reported as cash?

Selecione uma das seguintes:

$3,020,000
$1,320,000
$3,320,000
$1,020,000

Explicação

Questão 26 de 45

1

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Cash on hand is ( included in, excluded from ) cash on the company's balance sheet.

Checking account is ( included in, excluded from ) cash on the company's balance sheet.

Sinking fund is ( excluded from, included in ) cash on the company's balance sheet.

Savings account is ( included in, excluded from ) cash on the company's balance sheet.

Certificates of deposit is ( excluded from, included in ) cash on the company's balance sheet.

Negotiable checks is ( included in, excluded from ) cash on the company's balance sheet.

Compensating balance is ( excluded from, included in ) cash on the company's balance sheet.

Travel advance is ( excluded from, included in ) cash on the company's balance sheet.

Deposits in a foreign bank is ( included in, excluded from ) cash on the company's balance sheet.

Explicação

Questão 27 de 45

1

Which of the following would not be included with cash and cash equivalents on the balance sheet?

Selecione uma das seguintes:

unrestricted funds on deposit.
checks.
sinking funds.
undeposited credit card sales receipts.

Explicação

Questão 28 de 45

1

A short-term investment is considered a cash equivalent if it is

Selecione uma das seguintes:

highly liquid.
readily convertible into an unknown amount of cash.
within 120 days of maturity.
all of these choices.

Explicação

Questão 29 de 45

1

Internal cash control procedures are

Selecione uma das seguintes:

required by law for publicly traded companies.
enhanced by routine reviews of the accuracy of recorded cash transactions.
enhanced by the separation of employee duties.
all of these choices.

Explicação

Questão 30 de 45

1

All of the following are a cash control over receipts except

Selecione uma das seguintes:

daily recording of all cash receipts in the accounting records.
daily deposit of all receipts in the company’s bank account.
immediate counting of receipts by the person opening the mail or the salesperson using the cash register, and subsequent verification by an independent person.
making all payments by check (or electronic funds transfer) so there is a record for every company expenditure.

Explicação

Questão 31 de 45

1

Which of the following would not be classified as a trade receivable?

Selecione uma das seguintes:

customer accounts receivable for the sale of merchandise on account.
short-term customer note receivable in exchange for merchandise.
accrued interest on investments.
obligations arising from customers for services rendered.

Explicação

Questão 32 de 45

1

Which of the following is treated as a cash sale?

Selecione uma das seguintes:

credit card sale involving a bank credit card.
credit card sale involving the store's credit card.
sale involving the receipt of a note receivable.
all of these choices.

Explicação

Questão 33 de 45

1

When a customer retains defective goods at a reduced price, the reduction is called a

Selecione uma das seguintes:

sales discount.
sales return.
sales allowance.
trade discount.

Explicação

Questão 34 de 45

1

Using the net price method, which account does not apply when recording the receipt of payment on account after the discount period?

Selecione uma das seguintes:

Accounts Receivable.
Cash.
Sales Discounts Not Taken.
Sales Revenue.

Explicação

Questão 35 de 45

1

Using the gross price method, the journal entry for a sale on account for $10,000 under the terms 2/10, n/30 would include a

Selecione uma das seguintes:

debit to Cash for $9,800.
debit to Accounts Receivable for $10,000.
debit to Accounts Receivable for $9,800.
debit to Sales Revenue for $9,800.

Explicação

Questão 36 de 45

1

Which of the following is not true of the account Allowance for Doubtful Accounts?

Selecione uma das seguintes:

It is an expense account.
It is reported on the balance sheet.
It is debited when writing off an uncollectible account receivable.
Its balance is deducted from the balance in Accounts Receivable to determine the net realizable value of the company’s receivables.

Explicação

Questão 37 de 45

1

Using the allowance method, which is the proper journal entry for writing off an uncollectible account?

Selecione uma das seguintes:

Debit Bad Debt Expense; credit Accounts Receivable.
Debit Bad Debt Expense; credit Allowance for Doubtful Accounts.
Debit Allowance for Doubtful Accounts; credit Accounts Receivable.
Debit Accounts Receivable; credit Allowance for Doubtful Accounts.

Explicação

Questão 38 de 45

1

Which of the following is not true of the direct write-off method?

Selecione uma das seguintes:

It is the preferred method under GAAP.
Bad debt expense is recorded only when a specific customer account is determined uncollectible.
It matches bad debts of previous sales against current sales.
An uncollectible account is written off by debiting Bad Debt Expense and crediting Accounts Receivable.

Explicação

Questão 39 de 45

1

If the transfer of receivables does not meet the conditions of a sale, it should be accounted for as

Selecione uma das seguintes:

secured borrowing.
factoring.
a securitization.
a sale with recourse.

Explicação

Questão 40 de 45

1

If Gable Company sells $50,000 of its accounts receivable to a factor without recourse, receiving 90% value and paying a 10% commission, the journal entry will include

Selecione uma das seguintes:

a debit to Cash for $40,000.
a debit to Receivable from Factor for $5,000.
a debit to Factoring Expense for $5,000.
all of these

Explicação

Questão 41 de 45

1

A retailer made $2,000 of bank credit card sales and is charged a 4% fee when depositing the receipts. Assuming it uses the gross price method of recording sales, the entry will include

Selecione uma das seguintes:

a debit to Cash for $2,000.
a credit to Sales Revenue for $1,920.
a debit to Credit Card Expense for $80.
none of these

Explicação

Questão 42 de 45

1

Which of the following are true of a note receivable?

Selecione uma das seguintes:

A note receivable gives the holder the right to collect money on demand.
A note receivable is not a negotiable instrument.
A note receivable usually does not involve interest.
None of these choices are true of a note receivable

Explicação

Questão 43 de 45

1

The journal entry for the collection of a $10,000, 90-day, 10% note receivable would include

Selecione uma das seguintes:

a debit to Cash for $10,000.
a credit to Notes Receivable for $9,750.
a credit to Interest Revenue for $250.
a debit to Interest Expense for $250.

Explicação

Questão 44 de 45

1

A petty cash fund is established for $300. At the end of the accounting period, there is $50 cash and $245 in petty cash vouchers. The journal entry to replenish the fund will include

Selecione uma das seguintes:

a debit to Petty Cash for $250.
a credit to Cash for $250.
a debit to various expenses for $245.
a credit to Cash Short and Over for $5.

Explicação

Questão 45 de 45

1

On a bank reconciliation, which of the following would be deducted from the bank statement balance?

Selecione uma das seguintes:

deposits in transit.
outstanding checks.
bank service charges.
a note collected by the bank.

	Criado por jmkerstell mais de 8 anos atrás

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ACC 301: Chapter 6 (theory)

Questão 1 de 45

Which of the following items may be confused with cash but is normally categorized under a different balance sheet caption (not categorized as cash)?

Selecione uma das seguintes:

Explicação

Questão 2 de 45

The definition of cash equivalents includes: I. available to pay current obligations II. short-term, highly liquid investments III. so near maturity that there is little risk of changes in value because of changes in interest rates

Selecione uma das seguintes:

Explicação

Questão 3 de 45

Which of the following is an important element of internal control over cash?

Selecione uma das seguintes:

Explicação

Questão 4 de 45

Selecione das listas do Menu para completar o texto.

Explicação

Questão 5 de 45

Selecione das listas do Menu para completar o texto.

Explicação

Questão 6 de 45

Selecione da lista do Menu para completar o texto.

Cash (sales) discounts induce prompt payment are price reductions for large purchases hide real prices from competitors( induce prompt payment, are price reductions for large purchases, hide real prices from competitors ) and are recorded using either the gross price method or the net price method.

Explicação

Questão 7 de 45

When a company records accounts receivable using the gross price method and the customer pays and takes advantage of the discount, which of the following is true?

Selecione uma das seguintes:

Explicação

Questão 8 de 45

Selecione da lista do Menu para completar o texto.

A sales allowance cash discount sales return( sales allowance, cash discount, sales return ) occurs when a customer retains defective goods; conceptually, the company should estimate and record in the period of sale so as to properly report sales revenue and ending accounts receivable.

Explicação

Questão 9 de 45

Which of the following statements is correct with regard to the direct write-off method? I. Allows the manipulation of income. II. Is simple to apply.

Selecione uma das seguintes:

Explicação

Questão 10 de 45

Selecione da lista do Menu para completar o texto.

Explicação

Questão 11 de 45

The net realizable value of a company's accounts receivable is the balance of the accounts receivable account I. Plus the allowance for sales returns II. Minus the allowance for doubtful accounts III. Plus deferred gross profit IV. Minus allowance for sales discounts

Selecione uma das seguintes:

Explicação

Questão 12 de 45

What method of bad debt estimation categorizes individual accounts receivable based on the length of time outstanding? Why is this length of time an important factor?

Selecione uma das seguintes:

Explicação

Questão 13 de 45

When accounts receivable are sold or factored

Selecione uma das seguintes:

Explicação

Questão 14 de 45

Selecione uma das seguintes:

Explicação

Questão 15 de 45

Selecione das listas do Menu para completar o texto.

Unlike accounts receivable, notes receivable are negotiable arise from the company's operations( are negotiable, arise from the company's operations ) and usually involve interest are grouped as trade or nontrade in the( involve interest, are grouped as trade or nontrade in the ).

Explicação

Questão 16 de 45

Sally Company accepted a 3-month, non-interest-bearing note receivable on December 1. If Sally's year end is December 31, what entry would be recorded

Selecione uma das seguintes:

Explicação

Questão 17 de 45

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If a note is transferred with recourse assigned( transferred with recourse, assigned ), the company reports a(n) liability expense( liability, expense ) at the estimated amount it would have to pay the buyer.

Explicação

Questão 18 de 45

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Explicação

Questão 19 de 45

Selecione da lista do Menu para completar o texto.

Explicação

Questão 20 de 45

Which of the following transactions would not be appropriate for the use of a petty cash system?

Selecione uma das seguintes:

Explicação

Questão 21 de 45

Why are actual expenses, rather than the petty cash account, debited when the fund is replenished?

Selecione uma das seguintes:

Explicação

The definition of cash equivalents includes:

I. available to pay current obligations
II. short-term, highly liquid investments

III. so near maturity that there is little risk of changes in value because of changes in interest rates

Cash (sales) discounts ( induce prompt payment, are price reductions for large purchases, hide real prices from competitors ) and are recorded using either the gross price method or the net price method.

A ( sales allowance, cash discount, sales return ) occurs when a customer retains defective goods; conceptually, the company should estimate and record in the period of sale so as to properly report sales revenue and ending accounts receivable.

Which of the following statements is correct with regard to the direct write-off method?

I. Allows the manipulation of income.
II. Is simple to apply.

The net realizable value of a company's accounts receivable is the balance of the accounts receivable account

I. Plus the allowance for sales returns
II. Minus the allowance for doubtful accounts
III. Plus deferred gross profit
IV. Minus allowance for sales discounts

Unlike accounts receivable, notes receivable ( are negotiable, arise from the company's operations ) and usually ( involve interest, are grouped as trade or nontrade in the ).

If a note is ( transferred with recourse, assigned ), the company reports a(n) ( liability, expense ) at the estimated amount it would have to pay the buyer.