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