Payment for goods and services: cash and accounts receivable

FELIPE GUARDIA
Quiz by FELIPE GUARDIA, updated more than 1 year ago
FELIPE GUARDIA
Created by FELIPE GUARDIA about 3 years ago
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Description

Vocabulary # 4

Resource summary

Question 1

Question
[blank_start]The maker of a note[blank_end] is the person or firm making the promise to pay.
Answer
  • The maker of a note

Question 2

Question
[blank_start]Segregation of duties[blank_end] means that the person who has physical custody of an asset is not the same person who has record-keeping responsibilities for that asset.
Answer
  • Segregation of duties

Question 3

Question
[blank_start]Accounts receivable[blank_end] is a current asset that arises from sales on credit; it is also the total amount customers owe the firm.
Answer
  • Accounts receivable

Question 4

Question
An [blank_start]outstanding check[blank_end] is a check the firm has written but that has not yet cleared the bank. That is, the check has not been presented to the bank for payment yet.
Answer
  • outstanding check

Question 5

Question
The [blank_start]allowance method[blank_end] is a method of accounting for bad debts in which the amount of the uncollectible accounts is estimated at the end of end accounting period.
Answer
  • allowance method

Question 6

Question
A [blank_start]bank reconciliation[blank_end] is a comparison between the cash balance in the firm´s accounting records and the cash balance on the bank statement to identify the reasons for any differences.
Answer
  • bank reconciliation

Question 7

Question
Net realizable value is a bank deposit the firm has made but is not included on the month´s bank statement because the deposit did not reach the bank´s recorded-keeping department in time to be included on the current bank statement.
Answer
  • True
  • False

Question 8

Question
The allowance for uncollectible accounts is a contra-asset account, the balance of which represents the total amount the firm believes it will not collect from its total accounts receivable.
Answer
  • True
  • False

Question 9

Question
Bad debts are highly liquid investments with a maturity of three months or less that a firm can easily convert into a known amount of cash.
Answer
  • True
  • False

Question 10

Question
[blank_start]A bank statement[blank_end] is a summary of the activity in a bank account sent each month to the account holder.
Answer
  • A bank statement
  • Net realizable
  • An aging schedule
  • A promissory note
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