Ch.7 accounting

Evaluation principle of "market-to-market" Applied to investments classified as available for sale securities:

B) Enhances usefulness of the balance sheet and evaluating solvency of a business

Marketable securities are classified into three types; which one is not one of the three types?

B) Market-to-market

If a company uses a percentage of net sales in computing the amount of uncollectible accounts expense:

B) The relationship between revenue and expenses is being stressed more than the valuation of receivables at the balance sheet date

All of the following are steps included in the preparation of a bank reconciliation except

C) Deducting any debit memoranda from the balance on the bank statement

Which of the following is not a basic means of achieving internal control over cash receipts?

C) Deposit or cash receipts daily in the petty cash fund

Under the allowance method, when a receivable that has been previously written off is collected

C) Net income and net assets are not affected

A bank reconciliation explains the differences between:

C) The balance per bank statement and the cash balance per the accounting records of the depositor.

When preparing a bank reconciliation, checks outstanding will:

D) Decrease the balance per the bank statement

Which available-for-sale securities, unrealized holding gains and losses are:

D) Reported in the stockholders equity section of the balance sheet

When a bank reconciliation has been satisfactorily completed, the only related entries to be made in the depositors records are:

D) to record items that explain the difference between the balance per the accounting records and the adjusted cash balance