Accounting Chp 2

$20,000 accounts receivable with 2/10, n/30 would record discount of:

2% of $20,000

The account which records differences between amounts of cash deposited and amounts from the cash register tapes is called

Cash over and short

which internal control activity is followed when management authorizes the purchasing department to order goods and services for the company:

Clearly defined authority and responsibility

what is the effect on liquidity when the company records its estimate for bad debt expense using the allowance method?

Liquidity decreases

Which of the following would not appear on a bank statement for checking account?

Outstanding checks

the operating cycle is the elapsed time between the:

Purchase of goods or services and the ultimate collection of cash from customers relates to the sale of those goods.

Which of the following procedures is not part of the preparation of a bank reconciliation for a checking account?

Reversing all the transactions recorded on the company's records that do not yet appear on the bank statements

which one of the following statements is true if a company's collection period for accounts receivable is unacceptable long?

The company may offer sales discounts to shorten the collection period.

Internal control for sales involve which of the following documentation?

A sale and its associated receivable only when the order, shipping, and billing documents are all presented.

Cash collected and recorded by a company but not yet reflected in a bank statement are known as:

Deposits in Transit

what are the effects on the account equation when the company writes off a bad debt under the allowance method?

No Effect on overall assets or stockholders' equity

which of he following is not a generally recognized internal control activity?

internal review of business transactions by the board of directors