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Study Resources (Accounting)

  Learning Objective 9-1 1) The receivables of an organization can be categorized into accounts receivable, notes receivable, and other receivables. 2) A company will have receivables whenever it sells goods or services on credit. 3) The two major types of receivables are interest receivable and taxes receivable. 4) A receivable can be described as.
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Learning Objective 7-3 1) Cash purchases are recorded in the purchases journal. 2) The purchases journal is a special journal used to record all purchases of merchandise inventory, office supplies, and other assets on account. 3) When recording in a purchases journal with a periodic inventory system, the Merchandise Inventory DR column would.
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11) A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as: A) Real Time Gross Settlement. B) Electronic Data Interchange. C) Electronic Fund Transfer. D) Evaluated Receipts Settlement. 12) Which of the following statements describes a.
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21) A company's accountant capitalized a payment that should be recorded as a revenue expenditure. How will this error affect the financial statements of the company? A) Net income will be overstated. B) Revenues will be understated. C) Assets will be understated. D) Liabilities will be understated. 22) Nobells Corp. has acquired land and paid.
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21) Which of the following transactions is recorded in the "Receive Payments" function of QuickBooks? A) Paying electricity bill B) Sold merchandise inventory on account to a customer C) Sold a product to a customer for cash D) Coupon payments to the bondholders 22) Which of the following transactions is recorded in the "Enter Bills".
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Learning Objective 8-2 1) A point-of-sale terminal provides control over cash receipts over the counter. 2) As a part of the internal control over cash receipts by mail, the mailroom sends both the customer checks and the remittance advices to the accounting department. 3) Regarding controls over cash receipts by mail, the bank.
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11) Which of the following are two methods of estimating uncollectible receivables? A) allowance method and amortization method B) aging-of-accounts-receivable method and percent-of-sales method C) gross-up method and direct write-off method D) direct write-off method and percent-of-completion method 12) The entry to write off an account receivable under the allowance method will: A) reduce net income. B).
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Learning Objective 9-3 1) The allowance method violates the matching principle. 2) A method of accounting for uncollectible receivables in which the company estimates bad debts expense instead of waiting to see which customers the company will not collect from is known as the allowance method. 3) Under both the allowance method and.
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21) The following information is from the 2015 records of Armand Camera Shop: Accounts Receivable, December 31, 2015 $40,000 (debit) Allowance for Bad Debts, December 31, 2015 prior to adjustment 1,500 (debit) Net credit sales for 2015 175,000 Accounts written off as uncollectible during 2015 15,000 Cash sales during 2015 27,000 Bad debts expense is estimated by the percent-of-sales method. The management.
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31) Which of the following describes the internal control component "monitoring of controls?" A) Internal auditors monitor company controls to safeguard assets, and external auditors evaluate the controls to ensure that the accounting records are accurate. B) Monitoring of controls is the "tone at the top" of the business. C) Monitoring of controls.
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11) The purchases journal is a special journal used to record: A) cash receipts, interest rate payments, and purchases. B) credit sales of assets that occur infrequently such as buildings, property, and equipment. C) credit sales. D) merchandise inventory, office supplies, and other assets purchased on account. 12) Which of the following is a column.
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11) One of the advantages of a computerized accounting information system, as compared to a manual one, is that it does not cost to ensure that the firm's data and information are secure. 12) In an accounting information system, outputs are the reports used for decision making, including the financial statements. 13).
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11) Charles and Charms, a merchandiser, has an account receivable for $125 which they now decided to be uncollectible. The merchandiser uses the direct write-off method. Which of the following entries is required to record the write-off? A) Bad Debts Expense 125 Accounts Receivable 125 B) Cash 125 Accounts Receivable 125 C) Allowance for Bad Debts 125 Accounts Receivable 125 D) Accounts Receivable 125 Bad Debts Expense 125 12) On January.
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11) If a bank reconciliation includes interest revenue, a journal entry is required which credits Cash and debits Interest Revenue. 12) In a bank reconciliation, a book error will be shown on the bank side of the reconciliation. 13) In a bank reconciliation, outstanding checks will be shown on the bank side.
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11) In order to exercise effective internal control over receivables the credit department must have access cash. 12) Businesses must maintain a single account receivable account for all customers. 13) Individual customer accounts of accounts receivable are known as subsidiary accounts. 14) Sales through credit cards and debit cards are journalized in the.
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21) A company has four vendors and the accounts payable subsidiary ledger shows the following balances. Alpha $275,821 Beta 143,474 Gamma 78,943 Delta 34,187 Calculate the accounts payable balance in the general ledger. A) $419,295 B) $532,425 C) $275,821 D) $256,604 22) Which of the following is true of a sales journal? A) It is a special journal used to record all the cash sales. B).
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1) An accounting information system (AIS) collects, records, stores, and processes accounting data to produce information that is useful for decision makers. 2) The collection of time records is an Accounting Information System activity that is classified as a business transaction that involves the sale of merchandise inventory. 3) An effective accounting.
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  Learning Objective 10-1 1) Plant assets are long-lived, tangible assets used in the operation of a business. 2) The process of allocating the cost of a plant asset over its useful life is known as cost reduction. 3) The cost principle requires a business to record the assets acquired or services received at.
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11) Which of the following is an example of hardware? A) monitor B) Microsoft Office C) ERP D) QuickBooks 12) Which of the following is an entry-level accounting software package? A) Microsoft Word B) QuickBooks C) Minitab D) router 13) An enterprise resource planning (ERP) system is a: A) hardware system that controls the access of employees to different levels of.
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41) In the following situation, which internal control procedure needs strengthening? At Syria Services, the accounting clerk fills out unnumbered purchase order forms for purchases of supplies. An operations engineer completes the form with a detailed description of the supplies being ordered, and the operations manager approves the purchase and passes.
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56) Refer to the following bank reconciliation: Bank          Book Balance, June 30, 2014$11,240.00Balance, June 30, 2014$10,200.00 Add:Add: Deposit in transit3,110.00Note collected by bank2,100.00 Interest revenue55.00 Less:Less: Outstanding checks #5061,200.00NSF check85.00 Outstanding checks #510900.00Bank service charge20.00 _________________ Adjusted balance, June 30, 2014$12,250.00Adjusted balance, June 30, 2014$12,250.00 Journalize the adjusting entry for the second reconciling item: interest revenue. 57) Refer to the following bank reconciliation: Bank         Book Balance,.
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11) External auditors evaluate company controls to ensure the financial statements are presented fairly in accordance with Generally Accepted Accounting Principles. 12) The Sarbanes-Oxley Act was passed by the Public Company Accounting Oversight Board. 13) Burglar alarms, fire alarms, and security cameras improve internal control. 14) Separating the custody of assets from accounting.
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Learning Objective 8-3 1) Before signing a check, the controller or the treasurer should examine the purchase order, the invoice, and the receiving report to determine that the company received the goods and that the company is paying only for the goods received. 2) A receiving report should be matched with the.
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11) The accounts receivable turnover ratio of a merchandiser is 9.8 times. Calculate the days' sales in receivables for the merchandiser. (Round to the nearest day.) A) 33 days B) 37 days C) 28 days D) 40 days 12) Which of the following is true of the proper balance sheet treatment of the Allowance for.
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51) Which of the following items are reconciling items on the bank side of the reconciliation? A) outstanding checks and correction of book error B) deposit in transit and NSF check C) deposit in transit and outstanding checks D) bank service charge and correction of book error 52) Which of the following items are reconciling.
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21) Which of the following is an example of exercise of internal control over receivables? A) separate cash collection and credit allowance duties B) extend credit only to customers who are most likely to pay C) pursue collection from customers to maximize cash flow D) ensure quick recovery of accounts receivable 22) Which of the.
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Learning Objective 9-5 1) The acid-test ratio is also known as the quick ratio. 2) The higher the quick ratio, the lower the business's ability to pay its current liabilities. 3) The amount of Accounts Receivable is generally reported at its gross amount on the balance sheet. 4) The acid-test ratio is a more.
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11) Adams Consultancy has the following account balances at the end of the current accounting period. Beginning inventory $ 75,000 Net purchases 415,000 Net sales revenue 500,000 The normal gross profit percent is 40%. What is the estimated ending inventory as determined by the gross profit method? A) $190,000 B) $415,000 C) $196,000 D) $490,000 12) The following data is available: Net sales $13,000 Normal.
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Learning Objective 9-2 1) The direct write-off method of accounting for uncollectible receivables is primarily used by small, non-public companies. 2) The expense associated with the cost of uncollectible accounts receivable is known as bad debts expense. 3) Companies that follow GAAP are required to use the direct write-off method for uncollectible accounts.
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Learning Objective 7-2 1) A general ledger is an accounting journal designed to record one specific type of transaction. 2) Sales on account are recorded in a cash receipts journal. 3) A subsidiary ledger is a record of accounts that provides supporting details on individual balances, the total of which appears in a.
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    Learning Objective 8-1 1) Internal control is an organizational plan that ensures that the financial statements are prepared and submitted in time. 2) Sarbanes-Oxley Act requires all the private companies in the U.S. to maintain an internal control system. 3) The Public Company Accounting Oversight Board oversees the work of auditors of public.
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31) A check for which a maker's bank account has inadequate money to pay the check is known as: A) a nonsufficient funds check. B) an outstanding check. C) a restrictive check. D) a canceled check. 32) The following information is available for Jack's Unlimited Company for the current month. Book balance end of the month $6,875 Outstanding.
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21) An accounting information system is said to be relevant if it: A) works smoothly with the business's employees and organizational structure. B) safeguards a business's assets and reduces the likelihood of fraud and errors. C) provides information that will improve decision making and reduce uncertainty. D) can accommodate changes in the business over.
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31) Which of the following is an example of a storage device in an accounting information system? A) monitor B) network C) printer D) server 32) Which of the following is an input device in an accounting information system? A) keyboard B) internet protocol C) printer D) router 33) Which of the following is an output device in an accounting.
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21) Which of the following is a requirement of the Sarbanes-Oxley Act? A) An outside auditor must issue an internal control report for each public company. B) The Public Company Oversight Board must conduct audits of public companies. C) The accounting firm that audits a public client must also provide consulting services for.
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Learning Objective 7-4 1) Hardware is electronic equipment that includes computers, monitors, printers, and the network that connects them. 2) Enterprise resource planning (ERP) systems are software systems that can integrate all of a company's functions, departments, and data into a single system. 3) One of the main disadvantages of a typical ERP.
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Learning Objective 8-6 1) When calculating the cash ratio, the numerator includes cash equivalents. 2) A cash equivalent is a highly liquid investment that can be converted into cash in three years or less. 3) Having a cash ratio below 1 is a good thing. 4) Cash is a highly liquid asset, but cash.
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