Accounting Quiz Chapters 4-5

Which of the following items are not included in cash?

Accounts receivable from customers

Which of the following items are included in cash?

Checks from customers Balance in checking accounts Currency and coins

Rollins Corp. purchases inventory by paying the supplier $1,000 with a credit card. Recording this transaction will require which of the following?

Credit accounts payable $1,000

Joyce Corp. uses the percentage-of-receivables method to account for bad debt expense. Joyce determines that a customer account of $20,000 should be written off as uncollectible. The write off of the account will include which of the following entries?

Credit to Accounts Receivable Debit to Allowance for Uncollectible Accounts

Effective internal control over cash requires segregation of duties. Which of the following duties should be segregated?

Depositing checks into the bank and recording receipts in the accounting records Opening the mail and deposit of checks in the bank

True or false: Accounts receivable not expected to be collected should be counted in the assets of the company until they are later written off. True false question.

False

Where is a note receivable reported in the balance sheet?

In either current or noncurrent assets, as appropriate.

Which of the following is true regarding acceptance of credit cards by retailers?

It improves internal control because employees do not handle cash.

Who has final responsibility for internal controls?

Management

Effective internal control over cash requires segregation of duties. Which of the following duties should be segregated?

Opening the mail and deposit of checks in the bank Depositing checks into the bank and recording receipts in the accounting records

The ending balance in cash is reported in which financial statement(s)?

The balance sheet and statement of cash flows

An ____ is the legal right to receive cash from a credit sale and represents an asset of the company.

account receivable

An informal credit arrangement with a customer for payment to be received after the sale is classified as a(n)

account receivable

The amount of cash owed to a company by its customers from the sale of goods or services is referred to as

accounts receivable

Accounts receivable should be classified as a(n)

asset

Margot, a prospective investor, wants to know how much cash Ziegler Inc. has on December 31. Margot can find the information in Ziegler's: (Select all that apply.)

balance sheet statement of cash flows

Rollins Corp. purchases inventory by paying the supplier $1,000 with a debit card. Recording this transaction will require which of the following?

credit cash 1,000

Shannon Corp. uses the aging method to account for bad debt expense. Shannon determines that a customer account of $10,000 should be written off as uncollectible. The write off of the account will include

debit Allowance for Uncollectible Accounts.

Ophelia Inc. just learned that Patton Inc., one of its customers with an outstanding accounts receivable balance, filed for bankruptcy. Assuming that the company utilizes the allowance method, Ophelia should record a(n):

decrease in Accounts Receivable

The Accounts Receivable account is reduced when the seller:

determines that a specific customer account will not be collectible

sell stock to investors

financing activity

Which of the following are common controls over cash receipts?

having two different employees take custody of the checks and make the deposit opening mail daily and making a detailed list of checks received

A company's plans to safeguard company assets and enhance the reliability and accuracy of accounting information are referred to as

internal controls

purchase equipment

investing activity

Receivables not expected to be collected should

not be counted in assets of the company.

Pixie Inc. writes off a specific accounts receivable. If Pixie is using the allowance method, the write off will _____ net income.

not effect

Sell goods to customers

operating activity

Margot, a prospective investor, wants to know how much cash Ziegler Inc. has on December 31. Margot can find the information in Ziegler's:

statement of cash flows and balance sheet

Who is responsible for providing an opinion on management's assessment of internal control?

the company's auditors

Accounts receivable are typically classified as current assets because

they will be converted to cash within 1 year.

The allowance method estimates

uncollectible accounts