Accounting

Topics: Balance sheet, Accounts receivable, Generally Accepted Accounting Principles Pages: 15 (2799 words) Published: February 9, 2014

—Conceptual
21.Which of the following is not considered cash for financial reporting purposes? a.Petty cash funds and change funds
b.Money orders, certified checks, and personal checks
c.Coin, currency, and available funds
d.Postdated checks and I.O.U.'s

22.Which of the following is considered cash?
a.Certificates of deposit (CDs)
b.Money market checking accounts
c.Money market savings certificates
d.Postdated checks

23.Travel advances should be reported as
a.supplies.
b.cash because they represent the equivalent of money.
c.investments.
d.none of these.

24.Which of the following items should not be included in the Cash caption on the balance sheet? a.Coins and currency in the cash register 
b.Checks from other parties presently in the cash register  c.Amounts on deposit in checking account at the bank
d.Postage stamps on hand

25A cash equivalent is a short-term, highly liquid investment that is readily convertible into known amounts of cash and
a.is acceptable as a means to pay current liabilities.
b.has a current market value that is greater than its original cost c.bears an interest rate that is at least equal to the prime rate of interest at the date of liquidation. d.is so near its maturity that it presents insignificant risk of changes in interest rates.

26.Bank overdrafts, if material, should be
a.reported as a deduction from the current asset section.
b.reported as a deduction from cash.
c.netted against cash and a net cash amount reported.
d.reported as a current liability.

27.Deposits held as compensating balances
a.usually do not earn interest.
b.if legally restricted and held against short-term credit may be included as cash. c.if legally restricted and held against long-term credit may be included among current assets. d.none of these.

28.The category "trade receivables" includes
a.advances to officers and employees.
b.income tax refunds receivable.
c.claims against insurance companies for casualties sustained. d.none of these.

29.Which of the following should be recorded in Accounts Receivable? a.Receivables from officers
b.Receivables from subsidiaries
c.Dividends receivable
d.None of these

30.What is the preferable presentation of accounts receivable from officers, employees, or affiliated companies on a balance sheet? a.As offsets to capital.
b.By means of footnotes only.
c.As assets but separately from other receivables.
d.As trade notes and accounts receivable if they otherwise qualify as current assets.

31.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) a.trade discount.

b.nominal discount.
c.enhancement discount.
d.cash discount.

32.Trade discounts are
a.not recorded in the accounts; rather they are a means of computing a price. b.used to avoid frequent changes in catalogues.
c.used to quote different prices for different quantities purchased. d.all of the above.

33.If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as
a. a deduction from sales in the income statement.
b.an item of "other expense" in the income statement.
c. a deduction from accounts receivable in determining the net realizable value of  accounts receivable.
d.sales discounts forfeited in the cost of goods sold section of the income statement.

34.Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does not make the balance sheet misleading because

a.most short-term receivables are not interest-bearing.
b.the allowance for uncollectible accounts includes a discount element. c.the amount of the discount is not material.
d.most receivables can be sold to a bank or factor.

35.Which of the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Principles of Accounting 1 chapter 9 notes
  • Accounting Essay
  • Accounting In The Society Essay
  • Accounting Essay
  • Intermediate Accounting Essay
  • Essay about accounting
  • Accounting Project Essay
  • Financial Accounting Midterm Essay

Become a StudyMode Member

Sign Up - It's Free