1. GAAP prefers companies to use the: (Points : 1) direct write-off method to evaluate bad debts. allowance method to evaluate bad debts. amortization method to evaluate bad debts. 360-day method to evaluate bad debts.
2. In a bank reconciliation, an NSF check will be shown on the bank side of the reconciliation. (Points : 1) True False |
3. Check Number 6135 for $576 was incorrectly entered as $657. Which adjustment needs to be made? (Points : 1) Decrease the book balance. Decrease the bank statement balance. Increase the book balance. Increase the bank statement balance. |
4. Which of the following items will NOT appear on the book side of the reconciliation? (Points : 1) The bank collected a note receivable of $1,000. A nonsufficient funds check of $75 was returned to the bank. A deposit was in transit. The bank charged a service fee of $20. |
5. The aging method is a balance sheet approach of estimating uncollectible accounts. (Points : 1) True False | 6. A company has Net sales of $850,000, Beginning net receivables of $230,000 and Ending net receivables of $190,000. What is the days' sales in accounts receivable? (Please round to nearest whole day.) (Points : 1) 82 days 99 days 93 days 90 days None of these is correct
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| 7. A petty cash fund was established with a $400 balance. It currently has cash of $10 and petty cash tickets as shown below.
| Travel expense | $120 | | Office supplies | $200 | | Equipment rental expense | $70 |
The journal entry to replenish the account would be which of the following: (Points : 1) Debit various expenses $390, credit Cash $390 Debit various expenses $390, credit Petty cash fund $390 Debit Cash $10, credit various expenses $10 Credit Petty cash fund $390, debit Cash $390
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| 8. The Allowance for uncollectible accounts currently has a credit balance of $200. The company's management estimates that 2.5% of net credit sales will be uncollectible. Net credit sales are $115,000. What will be the amount of Uncollectible account expense reported on the income statement? (Points : 1) $3,275 $3,075 $2,875 $2,675 None of these is correct |
| 9. A company has the following account balances. What is the acid-test ratio? (Please round to two decimal places.)
| Cash | $50,000 | | Short-term investments | 85,000 | | Net current receivables | 120,000 | | Inventory | 145,000 | | Total current liabilities | 275,000 |
(Points : 1) .93 1.45 .64 1.76 None of these is correct |
10. If the bank reconciliation includes a deposit in transit, a journal entry is required which includes a debit to cash. (Points : 1) True False |
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