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Study Resources (Accounting)

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 10-2 1) Depreciation is the allocation of a plant asset's cost to expense over the useful life of the asset. 2) Residual value is also known as depreciable cost. 3) An asset is said to be obsolete when a newer asset can perform the job more efficiently. 4) When a company uses.
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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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  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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Learning Objective 10-4 1) Natural resource is an asset that comes from the earth and is consumed. 2) The process by which businesses spread the allocation of a natural resource's cost over its usage is known as depreciation. 3) The units-of-production method is used to compute the depletion expense. 4) Businesses should not deplete.
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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 8-2 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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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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55) 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 first reconciling item: note collected by bank. 56) Refer to the following.
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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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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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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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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.
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57) 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 third reconciling item: NSF check. 58) Refer to the following bank.
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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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53) The following information is needed to reconcile the cash balance for Fire Steel Inc. •A deposit of $5,800 is in transit. •Outstanding checks total $1,500. •The book balance is $6,800 at February 28, 2013. •The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent. •The bank balance at February.
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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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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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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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Learning Objective 10-3 1) Discarding of plant assets involves disposing of the asset for no cash. 2) When a business sells a plant asset for book value, a gain or loss should be recorded. 3) When a plant asset is discarded that is fully depreciated and has no residual value, the business will.
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11) If a company uses the contra account, Accumulated Amortization, this account will typically be shown on the balance sheet. 12) Which of the following is an intangible asset? A) copyright B) building C) land D) equipment 13) Businesses are allowed to record goodwill: A) when they enjoy an outstanding reputation and loyalty with customers. B) if they.
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18) Equipment was purchased for $24,000. The equipment's estimated useful life was 5 years, and its residual value was $4,000. The straight-line method of depreciation was used. Calculate gain or loss on sale if the equipment is sold for $18,000 at the end of the first year. Give journal entry.
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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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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.
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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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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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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) When an asset is fully depreciated, no further depreciation expense is recorded. 12) Companies are required to use Modified Accelerated Cost Recovery System (MACRS) for tax purposes. 13) Which of the following categories of assets should be depreciated? A) tangible property, plant and equipment, other than land B) intangible property C) land D) natural resources 14).
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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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  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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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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