accounting test 2
the interest on a 3 month, 12%, 6,000 note recievable
$180
in a period of rising prices, which inventory method is best to use to reduce income taxes by refunding net income
LIFO
which of the following is not included in cash and cash equivalents on a company's balance sheet
a bank certificate of deposit for 1 year
under the allowance method, the entry to write-off a $1,425 uncollectible account includes
a debit to allowance for doubtful account for $1,425
which of the following journal entries is recorded as a result of the bank reconciliation process to record a NSF check for $250
accounts receivable 250 cash 250
on the bank reconciliation, interests earned on a checking account should be
added to the balance per books
which of the following statements is true regarding the 2 allowance procedures used to estimate bad debts
aging of accounts receivable method takes into account the existing balance in the allowance for doubtful account
which of the following items on a bank reconciliation would require a journal entry on the company's books
bank service charge
the account allowance for uncollectible accounts is classified as a
contra-account to accounts receivable
the collection of $1,000 account after the 2% discount would result in a
decrease to accounts receivable for $1000
the matching rule related to credit losses by stating the bad debt expense should be recorded
in the period of the sale
under the perpetual inventory system, in addition to making the entry to record a sale a company would
increase cost of goods sold and decrease merchandise inventory
the collection of a $400 account within the 2% discount period would result in a
increase to sales discounts for $8
a traditional definition of internal control specifically includes all of the following features EXCEPT
maintenance of a clean and safe workplace
what does not represent a sale
merchandise placed aside for a customer who plans to come in next week and pay with cash
which of the following would be deducted from the balance per bank
outstanding checks
all of the following are inventory costing methods except
periodic
which of the following is not an internal control activity for cash?
record keeping and physical custody of cash should be performed by the same person
when applying the lower of cost or market rule to inventory valuation, market generally means
replacement cost
which internal control activity is followed when inventory storage areas are secured with limited access
safeguarding of assets and records
Jane manages the physical inventory in the warehouse and also maintains the accounting records of the inventory records held there, what internal control is violated?
segregation of duties
merchandise inventory becomes part of cost of goods sold when a company
sells the inventory
which one of the approaches for the allowance procedure emphasizes the net realizable value of accounts receivable on the balance sheet
the aging of accounts receivable method
if a company erroneously records a $500 deposit as $50 in its records, which of the following must occur when reconciling its bank statement
the company must increase the balance per its records by $450
conservatism
the lower of cost or market method of accounting for inventories follows the convention of
When the FIFO method is used, ending inventory is assumed to consist of
the most recently purchased units