A

Refer to the question above (13). What would be the journal entry A Better Mousetrap would record on the due date of the note (assuming the customer paid A better mousetrap the note and all interest owned)?

Debit Cast $104,500; Credit Note Receivable $100.000; Credit Interest Income $3,750; Credit Interest Receivable $750

what is the distinguishing characteristic between accounts receivable and notes receivable.

Notes receivable specify an interest and maturity date at which the interest and principle must be repaid, while accounts receivable do not.

The college store accepts MasterCard for payments of purchase made by students. Mastercard charges a 1.55% collection fee. Credit card sales totaling 10,000 are made during August. Recording these sales transactions will result in an increase in: a. Service Charge Expense for $155 b. Sales for $9,845 c. Cash for $10,000 d. accounts receivable for $9,845

Service Charge Expense for $155

The lower of cost or market rule applies to the write down of inventory values when market value exceeds cost. Why does this rule not allow for write-ups in inventory value?

Writing up inventory to market value would be inconsistent with the conservatism principle

The company sold merchandise to a customer on December 1, 2018 for $100,000. the customer paid with a promissory note that has a term of 6 months and an annual interest rate of 9%. The company's accounting period end of December 31. What amount should the company recognize as interest income on December 31, 2018? a. $750 b $0 c. $9,000 d. $4,500

a. $750

which of the following items would be added to the company's cash balance on a bank reconciliation? a. deposits of transit b. outstanding checks c. interest earned on the bank account b. bank service charges

a. deposits of transit

If goods in transit are shipped FOB shipping point after shipment the goods should be included in the inventory count of: a. the buyer b. the shipping company c. both the seller and the buyer d. the seller

a. the buyer

Assuming inventory is purchased by customers, the amount (expense) recognized on the balance sheet a inventory will ultimately be recognized on the income statement as: a. administrative expense b. cost of goods sold c. research and development expense d. operating expenses

b. cost of goods sold

When inventories are written down due to the application of the lower of cost or market (LCM) rule, which of the following is usually increased? a. cost of gods sold b. operating expenses c. inventories d. accumulated depreciation-inventory

b. operating expenses

Which internal control activity if violated when the cashier at a cash register in a retail store also deposits the cash in the bank? a. independent checks on recorded amounts b. segregation of duties c. safeguards over assets and records d. adequate documents and record

b. segregation of duties

On December 15, 2018, the accounts receivable balance was $50,000 ad the balance in the allowance for doubtful accounts was $5,000. That morning, a $1,000 uncollected account was written-off (actual write off). Net A/R immediately after the write-off is: a. $44,000 b. $46,000 c. $45,000 d. $49,000

c. $45,000

ABC Inc. reported net credit sales of $1,250,000 and cost of goods sold of $900,000 for 2018. Its beginning balance of Accounts Receivable was $175,000. Accounts receivable decreased by $25,000 during 2018. Rounded to two decimals places, what is the company's accounts receivable turnover rate for 2018? a. 11.03 b. 8.33 c. 7.69 d. 7.14

c. 7.69

A debit memo appeared on the May bank statement. How should this amount be treated on the May bank reconciliation? a. Add it to the company's balance b. Deduct it from the bank balance c. Deduct it from the company's balance d. Add it to the bank balance

c. Deduct it from the company's balance

Which inventory method results in the highest inventory balance during a period of rising purchase prices? a, weighted average cost b. both FIFO and LIFO result in the same inventory balance c. FIFO d. LIFO

c. FIFO

Which of the assets listed below is considered the most liquid? a. Inventory b. prepaid insurance c. accounts receivable d. cash

cash

Beginning accounts receivable were $200,000 and ending accounts receivable were $300,000. Assuming cash collections totaled $1,100,000, what were credit sales? Also assume there were no credit defaults. a. $1,500.000 b. $1,100.000 c. $1,300.000 d. $1,200.000

d. $1,200.000

All Star Auto has an accounts receivable balance after posting net collections from customers for 2013 of $180,000. Management aged the accounts receivable and estimate for uncollected account percentages as follows: $90,000 Current at 2% $50,000 1-30 days past due at 5% $30,000 31-60 days past due at 10% $10,000 60+ days past due at 25% Net A/R is: a. $173,200 b. $9,800 c. $155,200 d. $170,200

d. $170,200

Bilbo company has a beginning balance in its inventory account of $2,250 and the ending balance is $1,500. Cost of goods sold is $9,750. According to the cost of goods sold model, what was the amount of inventory purchased during the year? a. $10,500 b. $750 c. $11,250 d. $9,000

d. $9,000

The amount of cash in the cash register from sales total $534. The amount for sales recorded on the cash register tape was $530. Which journal entry is required? a. Debit Cash $534; Credit Sales $534 b. Debit Cash %530; Credit Sales $530 c. Debit Cash $530; Debit Cash Over & Short $4; Credit Sales $534 d. Debit Cash $534; Credit Sales $530; Credit Cash Over & Short $4

d. Debit Cash $534; Credit Sales $530; Credit Cash Over & Short $4

Which inventory cost flow method assigns the cost of the most recants items purchased of COGS? a. weighted average cost b. specific identification c. FIFO d. LIFO

d. LIFO

Which of the following accounts would most likely appear on the income statement of a manufacturing company, but not on the income statement of a service company? a. income tax expense b. revenue c. selling, general, and administrative expenses b. cost of goods sold

d. cost of goods sold

A spa accepted a check from a customer as payment for services. Unfortunately, the customers check bounced. The journal entry required on the company's books as a result of this bank reconciliation item will: a. decrease both total assets and stockholders' equity b. decrease total assets c. decrease stockholders equity b. have no net impact on total assets

d. have no net impact on total assets

Which internal control activity is followed when inventory storage areas are secured with limited access a. clearly defined authority and responsibility b. segregation of duties c. checks on recorded amounts d. safeguarding of assets and records

d. safeguarding of assets and records

If a company uses the direct write-off method of accounting for bad debts:

it will record bad debt expense only when an account is determined to be uncollected

If a company incorrectly records a $50 check received from a customer, at $500 in its records ($50 is the correct amount), which of the following must occur when reconciling its bank statement? a. the company must increase the balance per its records by $450 b. the company must increase the balance per its records by $500 c. the company must decrease the balance per its records by $500 d. the company must decrease the balance per its records by $450

d. the company must decrease the balance per its records by $450