ACCT207

c. a $90 deduction on the book side

A check was written by a business for $549 but was recorded erroneously in the Cash account as $459. How would this error be included on the bank reconciliation? a. a $90 addition on the book side b. a $90 deduction on the bank side c. a $90 deduction on the book side d. a $90 addition on the bank side

b.Recognition

An accountant describes the effects of an economic event on an entity by recording the transaction and reporting the amount on the financial statements. What is this called? a. Measurement b. Recognition c. Disclosure d. Matching

d.$16,630

At December 31, Amy Jo's Appliances had account balances in accounts receivable of $380,000 and $1,430 (debit) in allowance for uncollectible accounts. An analysis of Amy Jo's December 31 accounts receivable suggest that allowance for uncollectible accounts should be 4% of accounts receivable. Bad debt expense for the year should be: a.$18,531 b.$13,770 c.$1,430 d.$16,630

b.$ 60

Cobra Co.Cobra Co. sold merchandise to Island Corp. on December 1, 2008, for $9,000, and accepted a promissory note for payment in the same amount. The note has a term of 90 days and a stated interest rate of 8%. Cobra's accounting period ends on December 31. The year, 2009, is not a leap year. Refer to Cobra Co. What amount should Cobra recognize as interest revenue on December 31, 2008? a.$0 b.$60 c.$120 d.$180

d. Cash register tapes

Each of the following documents is used in the control of cash disbursements except: a. Purchase requisitions b. Purchase orders c. Receiving reports d. Cash register tapes

c. Canceled checks from customers

Each of the following documents is used in the control of cash receipts except: a. Cash register tapes b. Check lists (or prelists) c. Canceled checks from customers d. Bank deposit slips

d. 11.03

Falcon Corp. reported net sales (all on credit) of $1,600,000 and cost of goods sold of $1,100,000 for 2008. Its beginning balance of Accounts Receivable was $150,000. The accounts receivable balance decreased by $10,000 during 2008. Rounded to two decimal places, what is Falcon's accounts receivable turnover rate for 2008? a. 7.59 b. 10.32 c. 10.67 d. 11.03

a. Segregation of duties

Having only one person authorized to both prepare and sign checks is a violation of what internal control procedure? a. Segregation of duties b. Safeguarding of assets and records c. Independent verifications d.Design and use of business documents

d.$12,700

Hermitage Corp. The data presented below for Hermitage Corp. is for the year ended December 31, 2008 Sales (100% on credit) $1,400,000 Sales Returns 30,000 Accounts Receivable (December 31, 2008) 170,000 Allowance for Doubtful Accounts (before adjustment atDecember 31, 2008) 1,300 Estimated amount of uncollectible accounts based on an aging analysis 14,000 13.Refer to Hermitage Corp. If Hermitage uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2009? a.$15,300 b.$14,000 c.$13,700 d.$12,700

c.$156,000

Hermitage Corp.The data presented below for Hermitage Corp. is for the year ended December 31, 2008 Sales (100% on credit) $1,400,000 Sales Returns 30,000 Accounts Receivable (December 31, 2008) 170,000 Allowance for Doubtful Accounts (before adjustment atDecember 31, 2008) 1,300 Estimated amount of uncollectible accounts based on an aging analysis 14,000 Refer to Hermitage Corp. If Hermitage uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense? a.$184,000 b.$167,000 c.$156,000 d.$140,000

a.$2,000,000

Hess Enterprises purchased a building for $2,000,000 in 1995. In 2008, an independent appraiser assessed the value at $4,400,000. At what amount should the building appear on the financial statements in 2008? a.$2,000,000 b.$2,400,000 c.$4,400,000. d. whichever amount the company believes is the best indicator of the true value of the building.

a.$28,700

London Corp. London Corp. identified the following data in preparing a bank reconciliation on October 31, 2008. Bank statement balance $29,600 London's book balance (before adjustments) ? Outstanding checks 3,100 NSF checks 300 Service charges 200 Deposits in transit 2,200 Interest earned on checking account 100 Refer to London Corp. How much is London's adjusted cash balance on October 31, 2008? a.$28,700 b.$29,100 c.$28,300 d.$29,600

b.$29,100

London Corp. London Corp. identified the following data in preparing a bank reconciliation on October 31, 2008. Bank statement balance $29,600 London's book balance (before adjustments) ? Outstanding checks 3,100 NSF checks 300 Service charges 200 Deposits in transit 2,200 Interest earned on checking account 100 Refer to London Corp. How much is London's balance in its accounting records before adjustment? a.$28,700 b.$29,100 c.$28,300 d.$29,600

c.$400 decrease

London Corp. London Corp. identified the following data in preparing a bank reconciliation on October 31, 2008. Bank statement balance $29,600 London's book balance (before adjustments) ? Outstanding checks 3,100 NSF checks 300 Service charges 200 Deposits in transit 2,200 Interest earned on checking account 100 Refer to London Corp. What is the net amount of the adjustment to London's cash balance as a result of the bankreconciliation? a.$900 decrease b.$400 increase c.$400 decrease d.No amounts need to be recorded.

a. Relevant

Milestone, Inc., a manufacturer of tires, has given you its most recent annual report in an effort to obtain a sizable loan. The company is very profitable and appears to have a sound financial position. Based on a report presented on prime-time television last night, you are aware that Milestone is a defendant in several lawsuits related to its defective tires that cause vehicles to overturn. The information presented on television is an example of financial information that is a. Relevant b. Consistent c. Predictable d. Comparable

c. Interest Receivable | 150| | Interest Revenue| | 150|

On August 1, 2012, Turner Manufacturing lends cash and accepts a $9,000 note receivable that offers 4% interest and is due in nine months. How would Turner record the year-end adjustment to accrue interest in 2012? a. Interest Receivable | 360| | Interest Revenue| | 360| b. Interest Revenue | 155| | Interest Receivable| | 155| c. Interest Receivable | 150| | Interest Revenue| | 150| d. Interest Receivable | 155| | Interest Revenue| | 155|

d.$3,375

On December 31, 2012, Coolwear Inc. had balances in accounts receivable and Allowance for Uncollectible Accounts of $48,000 and $2,450, respectively. During 2013, Coolwear wrote off $925 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $4,900 at December 31, 2013. Bad debt expense for 20123 should be: a.$4,900 b.$3,975 c.$925 d.$3,375

d.$6,450

On December 31, 2012, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible accounts of $57,000 and $1,175 respectively. During 2013, Larry's wrote off $2,375 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,250 at December 31, 2013. Bad debt expenses for 2013 would be: a.$1,175 b.$4,050 c.$5,250 d.$6,450

b.$80

On February 1, 2012, Middleton Corp. lends cash and accepts a $4,000 note receivable. Bad debt expense for the year should be: a.$960 b.$80 c.$61 d.$160

a. Increase assets and equity by $4,750

Sports Central accepted a credit card account receivable in exchange for $5,000 of services provided to a customer. The credit card company charges a 5% service charge. Recording the sales transaction in the company's accounting records will have what effect on the accounting equation? a. Increase assets and equity by $4,750 b. Decrease assets and equity by $250 c. Increase assets by $5,000 d. Increase equity by $5,000

d.$67,815

The accounts receivable balance after posting net collections from customers for 2008 for Jesse's Toy Store is $75,000. The customers took advantage of sales discounts of $5,000 and returned $1,500 of merchandise on account. Management feels that approximately 1% of net accounts receivable will be uncollectible. The net realizable value of the accounts receivable is a.$80,685 b.$77,715 c.$74,250 d.$67,815

a.$5

The petty cash fund had an initial balance of $200. It currently has $17 in cash, $5 in miscellaneous cash receipts, and an additional $173 in specific cash receipts. The debit to Cash Short & Over would be ________. a.$5 b.$17 c.$173 c.$178

d. Must establish an internal control system that guarantees financial accuracy

Which of the following is not a requirement of Sarbanes-Oxley? a. Annual report must include an internal control report b. External auditors can no longer provide human resource services c. External auditors can no longer provide brokerage services d. Must establish an internal control system that guarantees financial accuracy

a. Canceled checks

Which of the following items would not be a reconciling item? a. Canceled checks b. Outstanding checks c. NSF checks d. Deposit in transit

a. Contra Account

Which one of the following best describes the allowance for doubtful account? a. Contra Account b. Liability Account c. Income Statement Account d. Cash flow Account

d. 180-day note issued by a local or state government

Which one of the following is not a cash equivalent? a. 30-day certificate of deposit b. 60-day Corporate commercial paper c. 90-day U.S. Treasury bill d. 180-day note issued by a local or state government

a. A bank certificate of deposit for 1 year

Which one of the following items is not included in cash? a. A bank certificate of deposit for 1 year b. A savings account at a bank c. A checking account balance d. Petty cash account e. All of the above are included in cash.