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Exam 7: Cash and Receivables

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Question 1

Multiple Choice

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On March 1,2014,Archer Inc.lent $3,500 to Ron Wood on a 1-year 6% promissory note.The amount of interest to be accrued on December 31 will be:

A) $210.00.
B) $175.00.
C) $157.50.
D) $140.00.

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Question 2

Multiple Choice

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An 83-day note issued on November 13,2014 will mature on:

A) February 2,2015.
B) February 3,2015.
C) February 4,2015.
D) February 5,2015.

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Question 3

Multiple Choice

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A company has $235,000 in credit sales.The company uses the allowance method to account for uncollectible accounts.The Allowance for Doubtful Accounts now has a $7,250 credit balance.If the company estimates 7% of credit sales will be uncollectible,what will be the amount of the journal entry to record estimated uncollectible accounts?

The process of acquiring merchandise from a supplier begins with the:

The period end adjusting entry for bad debt expense under the direct write-off method is:

Northwest Plumbing's bank statement shows a bank balance of $43,267.The statement shows a bank service charge of $50.Northwest Plumbing's book balance shows outstanding checks of $5,288 and deposits in transit of $9,325.The adjusted balance on the bank side of the reconciliation would be:

The net realizable value of Accounts Receivable is computed by subtracting the allowance for doubtful accounts from the amount in the Accounts Receivable control account.

Which of the following would NOT be considered a 90-day cash equivalent?

Accounts Receivable may be reported net of Allowance for Doubtful Accounts.

Gallego & Co.reported sales of $515,000;beginning net Accounts Receivable of $212,000 and ending net Accounts Receivable of $224,000.Gallego & Co.'s receivable collection period (rounded to the nearest day) is:

Bank reconciliations are an important part of internal control that should be performed daily.

Pirates Party Supply deposited a check for $675,but it was recorded on their books as a check for $576.This error of $99 would be:

Deposits in transit are:

In the last step of the procedure to properly control cash payments received in the mail,the ________ verifies the amount of the deposit and the total amount posted to the cash account.

U) S.Treasury notes must mature within ________ days of the Balance Sheet date in order to be considered cash equivalents.

A company has $317,000 in credit sales.The company uses the allowance method to account for uncollectible accounts.The Allowance for Doubtful Accounts now has an $8,150 debit balance.If the company estimates 6% of credit sales will be uncollectible,what will be the amount of the journal entry to record estimated uncollectible accounts?

Thames,Inc.has given you the following information from its aging of Accounts Receivable.Using this information,determine the amount of the journal entry to record the estimated uncollectible accounts. The current balance in Allowance for Doubtful Accounts is a $152 credit.

Online banking should NOT be used to reconcile the bank account.

The bank recorded a $56 deposit as $65.On a bank reconciliation this error would be corrected by:

On a bank reconciliation,outstanding checks are: