Accounting ch7

$ 19,000.

82. Consider the following: Cash in Bank - checking account of $18,500, Cash on hand of $500, Post-dated checks received totaling $3,500, and Certificates of deposit totaling $124,000. How much should be reported as cash in the balance sheet?

cash discounts under the net method.

All of the following are problems associated with the valuation of accounts receivable except

a deduction from sales in the income statement.

If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as

$35,800.

Kaniper Company has the following items at year-end: Cash in bank $30,000 Petty cash 300 Short-term paper with maturity of 2 months 5,500 Postdated checks 1,400 Kaniper should report cash and cash equivalents of

$15,000.

Kennison Company has cash in bank of $15,000, restricted cash in a separate account of $3,000, and a bank overdraft in an account at another bank of $1,000. Kennison should report cash of

Net approach.

Of the approaches to record cash discounts related to accounts receivable, which is more theoretically correct?

11.6%.

On January 1, 2014, Lynn Company borrows $2,000,000 from National Bank at 11% annual interest. In addition, Lynn is required to keep a compensatory balance of $200,000 on deposit at National Bank which will earn interest at 5%. The effective interest that Lynn pays on its $2,000,000 loan is

Cash 9,800 Sales Discount 200 Accounts Receivable 10,000

On July 22, Peter sold $15,500 of inventory items on credit with the terms 2/15, net 30. Payment on $10,000 sales was received on August 1 and the remaining payment was received on August 12. Assuming Peter uses the gross method of accounting for sales discounts, which one of the following entries was made on August 1 to record the cash received?

not the same.

The accounting for cash discounts and trade discounts are

none of these answer choices are correct

The category "trade receivables" includes

all of the above.

Trade discounts are

As assets but separately from other receivables.

What is the preferable presentation of accounts receivable from officers, employees, or affiliated companies on a balance sheet?

offset the overdraft against cash account.

When a company has cash available in another account in the same bank at which an overdraft has occurred, the company will:

cash discount.

When a customer purchases merchandise inventory from a business organization, she may be given a discount which is designed to induce prompt payment. Such a discount is called a(n)

Bad debt expense is an estimate that is based on historical and prospective information.

Which of the following concepts relates to using the allowance method in accounting for accounts receivable?

None of these answer choices are correct.

Which of the following should be recorded in Accounts Receivable?

Receivables are claims held against customers and others for money, goods, or services.

Which of the following statements is correct regarding receivables?

To avoid frequent changes in catalogs and to easily alter prices for different customers.

Why do companies provide trade discounts?

Improved matching of bad debt expense with revenue.

Why is the allowance method preferred over the direct write-off method of accounting for bad debts?