ACCT 2810 - Exam #2 - Multiple Choice Questions

c. control procedure

A _____ provides reasonable assurance that business goals can be achieved. a.control environment b.control procedure c.control assessment d.control report

a. purchasing office supplies

A special cash fund called a petty cash fund is used for _____. a.purchasing office supplies b.purchasing securities c.repaying a bank loan d.paying creditors

b. accounts receivables on the assets side of the balance sheet

A vehicle manufacturing company requires a certain down payment for the sale of its vehicles, and the remaining amount is to be paid at a later date. The company would record the remaining amount as: a.prepaid expenses under non-current assets on the balance sheet. b.accounts receivables on the assets side of the balance sheet. c.uncollectible receivables on the assets side of the balance sheet. d.interest receivables on the assets side of the balance sheet.

d. there is no effect on the working capital of Aries Inc.

Aries Inc. buys merchandise from Andy Co. on account, $1,900, terms free on board (FOB) shipping point and pays the freight cost of $50. Identify the transaction's effect on the working capital of Aries Inc. a.There is a decrease in the working capital of Aries Inc. by $1,950. b.There is an increase in the working capital of Aries Inc. by $1,850. c.There is a decrease in the working capital of Aries Inc. by $50. d.There is no effect on the working capital of Aries Inc.

d. $1,500

Aztec Inc's inventory records indicate the following on December 31, 20Y7:Account balance of Inventory$70,500Physical merchandise inventory on hand$69,000Estimated customer refund$2,500Aztec's inventory shrinkage is equal to _____. a.$1,000 b.$2,500 c.$500 d.$1,500

b. the working capital decrease by $2,500

Azure Inc's inventory records indicate an inventory shrinkage of $2,500. What is the effect of inventory shrinkage on Azure's working capital? a.The working capital increases by $2,500. b.The working capital decreases by $2,500. c.The working capital decreases by $5,000. d.There is no effect on the working capital.

a. selling expenses like special advertising

Direct costs of disposal include: a.selling expenses like special advertising. b.salaries paid to production managers. c.costs of direct labor used in converting raw materials into finished goods. d.costs of direct material purchased from outside suppliers.

b. ending inventory is $9,000, and cost of goods sold is $19,500

Following is the information provided by Digitrex Co. for the month of September: Date Units Unit Cost September 1 Beginning inventory 200 $20 September 18 Purchase 500 $25 September 25 Purchase 400 . $30 Total1,100 Digitrex sold 700 units in September.Calculate the cost of ending inventory and the cost of goods sold for the month of September using the last-in, first-out (LIFO) method. a.Ending inventory is $7,500, and cost of goods sold is $21,000. b.Ending inventory is $9,000, and cost of goods sold is $19,500. c.Ending inventory is $12,600, and cost of goods sold is $15,900. d.Ending inventory is $12,000, and cost of goods sold is $16,500.

a. inventory shrinkage

For retailers, the physical inventory on hand at the end of an accounting period is usually less than the balance of the inventory account. This difference is referred to as _____. a.inventory shrinkage b.customer refunds payable c.estimated returns inventory d.customer allowance

c. the difference of $900 would be deducted from cash balance in the company section

How would the following error be recorded in the bank reconciliation statement?A company recorded a deposit of $2,300 as $3,200. a.The difference of $900 would be added to the cash balance in the bank section. b.The difference of $900 would be added to the cash balance in the company section. c.The difference of $900 would be deducted from cash balance in the company section. d.The difference of $900 would not be record in the bank reconciliation statement.

b. 16.7 percent

If Juan and Co.'s markup percent is 20 percent, selling price of its product is $1,500, and the cost of the product is $1,250, then Juan's gross profit percent is _____. a.20.0 percent b.16.7 percent c.26.7 percent d.4.0 percent

c. both liquidity and profitability remain unchanged

If a company issues a credit memo of $600 to a customer, what is its effect on the company's liquidity and profitability? a.The liquidity decreases whereas profitability increases. b.The liquidity increases whereas profitability decreases. c.Both liquidity and profitability remain unchanged. d.Both liquidity and profitability increase.

d. added to the cost of the inventory

If buyer pays the freight costs, in the buyer's books of accounts, such costs are: a.written off against the customer refunds payable account. b.reported on the income statement as an expense. c.credited to the accounts payable account. d.added to the cost of the inventory.

b. $700

If the estimated selling price of a commodity is $1,050 and the selling expenses are $350, what will the net realizable value of the commodity be? a.$1,850 b.$700 c.$1,150 d.$1,400

b. the buyer pays the freight charges from the shipping point to the final destination

If the terms of invoice are FOB (free on board) shipping point, it means that _____. a.the seller delivers the merchandise to the buyer's final destination, free of freight charges to the buyer b.the buyer pays the freight charges from the shipping point to the final destination c.the buyer does not have to pay any sales tax on that invoice d.the seller and the buyer divide the freight charges equally among themselves

d. 30 days

In an invoice, the credit term is expressed as 2/10, n/30. The total amount of invoice is due within _____. a.10 days b.2 days c.40 days d.30 days

b. both liquidity and profitability metrics are unaffected

In which of the following ways does the return of merchandise affect liquidity and profitability metrics? a.The liquidity metric is affected negatively, whereas the profitability metric is affected positively. b.Both liquidity and profitability metrics are unaffected. c.The liquidity metric is affected positively, whereas the profitability metric is affected negatively. d.Both liquidity and profitability metrics are affected positively.

c. the inventory cannot be sold at normal prices due to imperfections, style changes, spoilage, damage, obsolescence, or other causes.

Inventory can be valued at other than cost if _____. a.the estimate of uncollectibles is based on the amount of sales for the period b.the market value is higher than the cost of acquisition c.the inventory cannot be sold at normal prices due to imperfections, style changes, spoilage, damage, obsolescence, or other causes d.the company can sell its inventory faster in the domestic market which results in improved liquidity and profitability

d. $24,500

Leto Inc. purchased merchandise on account from Metis Inc. for $25,000, credit terms being 2/10, n/30. If Leto pays the invoice within the discount period, what amount will Metis receive as payment? a.$22,500 b.$22,000 c.$25,500 d.$24,500

a. its liquidity as well as profitability remains unchanged

Magenta Inc. buys merchandise worth $1,000 from Zeus Inc. on account, terms FOB (free on board) shipping point and pays the freight cost of $100. Based on this scenario, which of the following is the effect on the liquidity and profitability of Magenta Inc.? a.Its liquidity as well as profitability remains unchanged. b.Its liquidity decreases and profitability increases. c.Its liquidity as well as profitability decrease. d.Its liquidity increases and profitability decreases.

a. $3,945,000

On January 1, 20Y6, Setasilk Inc. had $150,000 of inventory on hand, and it purchased $4,000,000 of merchandise during the year. On December 31, 2016, Setasilk Inc. took count of its physical inventory and determined that $205,000 of inventory was on hand. Setasilk Inc.'s cost of goods sold for 20Y6 is _____. a.$3,945,000 b.$4,055,000 c.$3,645,000 d.$4,205,000

d. allowance method

The _____ records bad debt expense by estimating uncollectible accounts at the end of the accounting period. a.double declining method b.average value method c.accelerated method d.allowance method

b. balance sheet

The adjusted cash balance determined in a bank reconciliation is reported on a(n) _____. a.variance report b.balance sheet c.income statement d.statement of stockholders' equity

b. if the sum of its operating income and other revenue is less than its other expenses

Under which of the following situations does a business earn a gross profit but incur a net loss? a.If the sum of its operating income and other revenue is more than its other expenses b.If the sum of its operating income and other revenue is less than its other expenses c.If its sales is less than its cost of goods sold d.If the sum of its gross profit and net income is less than its operating income

b. factor

When a company sells its receivables, depending on the factoring agreement, some of the risk of uncollectible accounts is shifted to the _____. a.auditor b.factor c.debtor d.creditor

b. credit memo

When a seller decreases a customer's accounts receivable balance to account for a refund to the customer, the seller sends the customer a _____ indicating the seller's intent to decrease the account receivable balance. a.debit memo b.credit memo c.purchase order d.invoice

a. beginning amount of cash plus cash sales.

When the clerk enters the amount of a sale in the cash register, the amount of cash in the clerk's drawer should equal the: a.beginning amount of cash plus cash sales. b.beginning amount of cash minus petty expenses. c.beginning amount of cash plus cash received in the mail. d.beginning amount of cash minus the amount recorded in the cash short and over account.

b. markup percent = gross profit percent x (selling price / cost)

Which of the following equations shows the relationship between markup percent and gross profit percent? a.Markup Percent = Gross Profit Percent × (Gross Profit / Cost) b.Markup Percent = Gross Profit Percent × (Selling Price / Cost) c.Markup Percent = Gross Profit Percent × (Gross Profit / Selling Price) d.Markup Percent = Gross Profit Percent × (Cost / Selling Price)

a. the days' sales in receivables

Which of the following estimates the average number of days taken to collect accounts receivable? a.The days' sales in receivables b.The sales receivables c.The average receivables d.The days' returns in receivables

c. allowance for doubtful accounts

Which of the following is a contra asset account? a.Accounts Receivable b.Ending Inventory c.Allowance for Doubtful Accounts d.Bad Debt Expense

b. the interest rate must be paid on the face amount for the term of the note.

Which of the following is a feature of a promissory note receivable? a.The payee is the party making the promise to pay. b.The interest rate must be paid on the face amount for the term of the note. c.The maker is the person to whom the amount is payable. d.The issuance date is the date on which the amount is to be paid.

c. credit sales / average accounts receivable

Which of the following is a formula to calculate the accounts receivable turnover? a.Credit sales × Average accounts receivable b.Cash sales ÷ Average accounts receivable c.Credit sales ÷ Average accounts receivable d.Cash sales × Return on average accounts receivable

b. the accounts receivable turnover

Which of the following is a useful tool for measuring the liquidity and efficiency of a company? a.The profitability ratio b.The accounts receivable turnover c.The prepaid expenses turnover d.The debt ratio

c. a decrease in the days sales in receivables

Which of the following is an effect of writing off an uncollectible account? a.A decrease in bad debt expenses b.An increase in return on sales c.A decrease in the days' sales in receivables d.An increase in sales

b. electronic funds transfer (EFT) deposits

Which of the following is recorded as an increase in liability in a company's account by a bank? a.Not sufficient funds (NSF) checks b.Electronic funds transfer (EFT) deposits c.Electronic funds transfer (EFT) payments d.Service charges

c. fees earned

Which of the following is reported on the income statement of a service business but not on that of a retail business? a.Operating expense b.Salaries expense c.Fees earned d.Non-operating income

b. operating income = sales - cost of goods sold - operating expenses

Which of the following is the correct equation for computing the operating income of a retail business? a.Operating income = Fees earned - Operating expenses b.Operating income = Sales - Cost of goods sold - Operating expenses c.Operating income = Fees earned + Non-operating income d.Operating income = Sales - Cost of goods sold + Non-operating income

a. a single-step income statement does not report gross profit and operating income

Which of the following is the correct statement regarding a single-step income statement? a.A single-step income statement does not report gross profit and operating income. b.A single-step income statement does not report selling and administrative expenses. c.A single-step income statement is prepared after the statement of stockholders' equity. d.A single-step income statement contains several sections and subtotals.

b. it is included in the cost of goods sold

Which of the following is the correct way to account for inventory shrinkage? a.It is written off against the balance of the estimated returns inventory account. b.It is included in the cost of goods sold. c.It is written off against the balance of the consumer refunds payable account. d.It is treated as an abnormal loss.

c. working capital = current assets - current liabilities

Which of the following is the equation for calculating a firm's working capital? a.Working Capital = Total Liabilities - Current Liabilities b.Working Capital = Current Liabilities - Current Assets c.Working Capital = Current Assets - Current Liabilities d.Working Capital = Total Assets - Non-Current Liabilities

d. markup percent = gross profit / cost of goods sold

Which of the following is the equation for calculating markup percent? a.Markup Percent = Net Income / Cost of Goods Sold b.Markup Percent = Cost of Goods Sold / Sales c.Markup Percent = Operating Income / Sales d.Markup Percent = Gross Profit / Cost of Goods Sold

b. materials inventory consists of the cost of raw materials used in manufacturing a product

Which of the following is true about materials inventory? a.Materials inventory consists of the costs of selling materials. b.Materials inventory consists of the cost of raw materials used in manufacturing a product. c.Materials inventory consists of the opportunity cost of using materials in a production process. d.Materials inventory consists of the costs incurred for partially completed products.

d. the company can place restrictions on the type of payments

Which of the following is true of a petty cash fund? a.The company does not keep records of the details of the payments made. b.The company cannot place any restrictions on the maximum amount of payment. c.The petty cash custodian has to authorize the payments made. d.The company can place restrictions on the type of payments.

c. it serves as a record of cash initially received

Which of the following is true of a remittance advice? a.It cannot be used to control cash received in the form of money orders. b.It is the portion of an invoice that is retained by the customer. c.It serves as a record of cash initially received. d.It is sent to the Purchases Department.

d. it is the quantity of goods owned by a business that is not sold at the end of an accounting period

Which of the following is true of inventory? a.It is the quantity of goods that is returned by a manufacturing company to its suppliers. b.It is an item that is recorded as an income on an income statement. c.It is an item that is recorded on the liabilities side of a balance sheet. d.It is the quantity of goods owned by a business that is not sold at the end of an accounting period.

b. notes receivable have a stronger legal claim than a normal account receivable

Which of the following is true of notes receivable? a.Notes receivable are calculated as a percentage of net sales. b.Notes receivable have a stronger legal claim than a normal account receivable. c.Notes receivable are prepared by the payee. d.Notes receivable are generally classified as long-term assets.

a. the first units purchased are assumed to be sold, and the ending inventory is made up of the most recent purchases.

Which of the following is true of the first-in, first-out (FIFO) inventory cost flow method? a.The first units purchased are assumed to be sold, and the ending inventory is made up of the most recent purchases. b.The cost of the units sold and in ending inventory is an average of the purchase costs. c.The last units purchased are assumed to be sold, and the ending inventory is made up of the first purchases. d.The units purchased in the middle of the year are assumed to be sold, and the ending inventory is made up of the other purchases.

b. the balance sheet reports the ending inventory at an amount that is about the same as its current replacement cost.

Which of the following is true of the first-in, first-out (FIFO) method in inflationary situations? a.The more recent unit costs are lower than the earlier unit costs. b.The balance sheet reports the ending inventory at an amount that is about the same as its current replacement cost. c.The first-in, first- out (FIFO) method reports a higher amount of cost of goods sold than the last-in, first-out (LIFO) method. d.The first-in, first- out (FIFO) method reports a higher amount of gross profit than the weighted average cost method.

d. cash to monthly cash expenses ratio

____ is a measure that is useful in assessing the ability of the company to operate in the event of negative net cash flows from operations. a.Cash flow margin ratio b.Operating cash flow ratio c.Price to cash flow ratio d.Cash to monthly cash expenses ratio

d. monthly cash burn

____ is computed by dividing net cash flows from operations by 12. a.Cash to monthly cash payoff b.Investing cash flow c.Monthly cash and cash equivalent d.Monthly cash burn

b. in the books of Citron Inc. the retained earnings decrease by $200, and in the books of Megaton Co. there is not effect.

Citron Inc. pays transportation charges of $200 for delivery of the merchandise sold to Megaton Co. Identify the effect of this transaction in the books of Citron and Megaton. a.In the books of Citron Inc. the retained earnings increase by $200, and in the books of Megaton Co. there is no effect. b.In the books of Citron Inc. the retained earnings decrease by $200, and in the books of Megaton Co. there is no effect. c.In the books of Citron Inc. the retained earnings decrease by $200, and in the books of Megaton Co. the operating expenses decrease by $200. d.In the books of Citron Inc. the retained earnings increase by $200, and in the books of Megaton Co. the operating expenses increase by $200.

c. 4.50 months

Compute the ratio of cash to monthly cash expenses from the information given below. Cash in hand . $500 Cash at bank . 1,500 U.S. Treasury bills . 2,000 Short-term investment . 725 Equity investment . 1,250 Net cash flows from operations for the year . 12,600 a.5.70 months b.3.10 months c.4.50 months d.6.20 months

b. ($25)

Consider the following example and determine the amount to be recorded under the cash short and over account: Cash register total for cash sales $25,000 Cash receipts from cash sales $24,975 a.($50) b.($25) c.$50 d.$25

d. cash is to be used effectively and efficiently

Control of cash payments should provide reasonable assurance that: a.minimum cash balance is maintained. b.cash is paid only out of the authorized amount. c.cash payments are reconciled. d.cash is used effectively and efficiently.

b. 28

Cost of goods sold for the current year for Olive Inc. is $7,700,000. Beginning inventory was $250,000, and ending inventory is $300,000. Calculate the inventory turnover. a.4 b.28 c.31 d.3

d. $275,478

Portlinc Co. has a total inventory of $1,250,980. What will be the value of its work-in-process if the value of its materials and finished goods are $99,037 and $876,465 respectively? a.$2,028,408 b.$2,226,482 c.$473,552 d.$275,478

a. current assets on the balance sheet

Receivables and inventory are reported as _____. a.current assets on the balance sheet b.non-operating expenses on the income statement c.current liabilities on the balance sheet d.operating expenses on the income statement

a. 25 days

Sales for the year is $6,132,000. Beginning and ending accounts receivables are $325,000 and $515,000 respectively. Compute the days' sales in receivables? a.25 days b.50 days c.5 days d.12.5 days

d. $2,774

Shangrov Company prepared a promissory note with a face value of $75,000, payable after 90 days, at a rate of 15%. The date of issue of the promissory note is October 2, 2016. Calculate the interest amount of the promissory note. Assume 365 days in a year. (Round the answer to the nearest dollar.) a.$1,258 b.$833 c.$11,250 d.$2,774

a. $400,000

Slateblue and Co. is a retail company. In 20Y5, it reported a gross profit of $1,000,000. If 60 % of the gross profit were operating expenses, calculate the operating income of Slateblue and Co. for 20Y5. a.$400,000 b.$600,000 c.$1,400,000 d.$1,600,000

c. publicly held companies

The Sarbanes-Oxley Act applies only to _____. a.government agencies b.privately held companies c.publicly held companies d.charitable institutions

a. inventory turnover

The _____ is a useful measure of liquidity and how efficiently a company is managing its operations. a.inventory turnover b.capital employed c.service coverage d.dividend payout

c. control environment

The _____ is the overall attitude of management and employees about the importance of controls. a.control procedure b.control application c.control environment d.control management

d. first-in, first-out method

The method of inventory valuation in which the ending inventory is made up of the most recent purchases is called the _____. a.lower of cost or market method b.last-in, first-out method c.weighted average method d.first-in, first-out method

c. allowance method

The method that requires an estimate of uncollectible accounts at the end of a period is called the _____. a.straight line method b.analysis of receivables method c.allowance method d.costing method

b. compensating balance

The minimum cash balance that banks may require companies to maintain in their bank accounts is called a(n) _____. a.adjusting balance b.compensating balance c.accrued balance d.uniform balance

b. income statement

The percent of sales method emphasizes the _____. a.statement of changes in equity b.income statement c.balance sheet d.statement of cash flows

c. commercial paper, money market funds, and U.S. Treasury bills.

The examples of cash equivalents include: a.money market accounts, short-term investments, and equity investments. b.commercial paper, money market accounts, and equity investments. c.commercial paper, money market funds, and U.S. Treasury bills. d.short-term investments, equity investments, and U.S. Treasury bills.

a. $325,000

The following data is given for Aquablue Inc. Calculate the ending inventory.Cost of goods sold for 2016$5,475,000Beginning inventory425,000Days' sales in inventory25 days a.$325,000 b.$375,000 c.$450,000 d.$400,000

a. $1,050,000

The following data relates to Dory Inc. for the year ending December 31, 20Y6. Sales $5,000,000 Cost of goods sold . $3,700,000 Selling expenses . $100,000 Administrative expenses . 150,000 Dory Inc.'s operating income is _____. a.$1,050,000 b.$8,950,000 c.$250,000 d.$1,200,000

c. $37,500

The following information is available for Orchid Inc. as on December 31 of the current year. Calculate the bad debt expense using the percent of sales method. Balance of accounts receivable$250,000 Balance of allowance for doubtful accounts$(4,500) Total credit sales$5,000,000 Bad debt as a percent of credit sales¾% a.$35,625 b.$18,750 c.$37,500 d.$35,700

a. sales minus cost of goods sold

The gross profit of a retail business is determined as: a.sales minus cost of goods sold. b.sales minus cost of goods sold minus operating expenses. c.fees earned minus cost of goods sold minus operating expenses. d.fees earned minus cost of goods sold.

a. the accounts receivable account decreases by $700, and the customer refunds payable account decreases by $700.

The seller issues a credit memo for $700 for damaged merchandise to the buyer, and the merchandise was not returned by the buyer. Which of the following is the effect on the financial statements of the selling company? a.The accounts receivable account decreases by $700, and the customer refunds payable account decreases by $700. b.The accounts payable account decreases by $700, and the inventories account decreases by $700. c.The accounts payable account decreases by $700, and the customer refunds payable account increases by $700. d.The accounts receivable account decreases by $700, and the inventories account increases by $700.

c. materials inventory, work-in-process inventory, and finished goods inventory.

The three types of inventory that a manufacturing company has are: a.practical inventory, theoretical inventory, and decoupling inventory. b.transit inventory, buffer inventory, and estimated inventory. c.materials inventory, work-in-process inventory, and finished goods inventory. d.service inventory, non-service inventory, and supply-chain inventory.

a. if a company elects to use last-in, first-out (LIFO) inventory valuation for tax purposes, then the company must also use LIFO for external financial reporting.

Which of the following is true of the last-in, first-out (LIFO) conformity rule? a.If a company elects to use last-in, first-out (LIFO) inventory valuation for tax purposes, then the company must also use LIFO for external financial reporting. b.When finished goods are sold, their costs are to be transferred to cost of goods sold on the income statement if the last-in, first-out (LIFO) method is used. c.Manufacturing inventories are to be disclosed compulsorily in the notes to the financial statements if the last-in, first-out (LIFO) method is used. d.If identical units of inventory are acquired at different unit costs during a period, it is necessary to determine items' cost using the last-in, first-out (LIFO) method when they are sold.

d. it yields a higher amount of cost of goods sold and a lower amount of inventory at the end of the period compared to the first-in, first-out (FIFO) method.

Which of the following is true of the last-in, first-out (LIFO) method in inflationary situations? a.The balance sheet reports the ending inventory at an amount that is almost the same at its current replacement cost. b.This method is practicable where transactions are less voluminous, and the prices of materials are descending. c.It results in larger gross profits, which are called inventory profits, than the first-in, first-out (FIFO) method. d.It yields a higher amount of cost of goods sold and a lower amount of inventory at the end of the period compared to the first-in, first-out (FIFO) method.

b. it is especially used when assessing the ability of new companies

Which of the following is true of the ratio of cash to monthly cash expenses? a.It can only be applied when the net cash flows are positive. b.It is especially used when assessing the ability of new companies to operate. c.The numerator excludes short-term investments that are reported under current assets. d.It indicates the number of times financial obligations are covered by cash available.

b. the cost of the units sold and in ending inventory is an average of the purchase costs.

Which of the following is true of the weighted average cost inventory cost flow method? a.For a series of purchases, the average cost is different, regardless of the price trends. b.The cost of the units sold and in ending inventory is an average of the purchase costs. c.The ending inventory is valued at the rate of the most recent purchase. d.It yields a higher amount of gross profit compared to the first-in, first-out method in inflationary situations.

a. adjusted balances under the bank and company sections are equal

Which of the following is verified at the end of a bank reconciliation? a.Adjusted balances under the bank and company sections are equal. b.All increases made in the bank section are reflected as decreases in the company section. c.All increases made in the company section are reflected as decreases in the bank section. d.Totals of the amounts adjusted in the bank and the company sections are equal.

b. other revenue is revenue from sources apart from the primary operating activity of a business

Which of the following statements is true about other revenue? a.Other revenue is included in the cost of goods sold. b.Other revenue is revenue from sources apart from the primary operating activity of a business. c.Other revenue is also known as gross profit. d.Other revenue is the difference between the actual customer refunds and the estimated customer refunds during a year.

a. any processing fees charged to a retailer for use of credit cards are recorded as an expense by the retailer.

Which of the following statements is true about sales made to customers using credit cards? a.Any processing fees charged to a retailer for use of credit cards are recorded as an expense by the retailer. b.Sales made to customers using credit cards are treated as credit sales. c.When sales are made to customers using credit cards, the balance of the accounts receivable account in retailer's books increases. d.Any processing fees charged to the retailer for use of credit cards decreases the retailer's gross profit.

a. the company's records do need to be updated for any items in the company section of the bank reconciliation

Which of the following statements is true of a bank reconciliation statement? a.The company's records do need to be updated for any items in the company section of the bank reconciliation. b.The company's records do need to be updated for items in the company and the bank section of the bank reconciliation. c.The company's records do not need to be updated for any items in the company section of the bank reconciliation. d.The company's records do need to be updated for any items in the bank section of the bank reconciliation.

a. these are customer checks that were initially deposited but not paid by the customer's bank

Which of the following statements is true of not sufficient funds (NSF) checks? a.These are customer checks that were initially deposited but not paid by the customer's bank. b.These are the checks that have been deposited and paid late by the customer's bank. c.These are the checks that have never been deposited by the customer. d.These are customer checks for which the customer's bank issues a credit memo.

d. a report on the effectiveness of company's internal controls

Which report is to be filed along with the company's annual 10-K report with the Securities and Exchange Commission? a.A report on the payment of the long-term liabilities b.A report on the efficiency of the company in using its assets c.A report on the effectiveness of the company's cash management d.A report on the effectiveness of company's internal controls

b. increases bad debt expense and decreases accounts receivables

Writing off accounts receivable under the direct method _____. a.decreases both accounts receivables and bad debt expenses b.increases bad debt expense and decreases accounts receivables c.increases both accounts receivables and bad debt expenses d.decreases bad debt expense and increases accounts receivables