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Study Resources (Accounting)

Ex. 204 The following information was used to prepare the March 2016, bank reconciliation for Sam's Store. Identify the items that require adjustment to the cash balance per books and prepare the appropriate adjusting entries.               1.Included with the bank statement materials was a check from Stan Kenton for $50 stamped "NSF."              .
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88.An aging of a company's accounts receivable indicates that $6,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record bad debts for the period will require a a.debit to Bad Debt Expense for $6,000. b.debit to Allowance for Doubtful Accounts for $5,200. c.debit.
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21.A factor purchases receivables from businesses for a fee and collects the remittances directly from customers. 22.A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services. 23.Receivables may be sold because they may be the only.
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SHORT-ANSWER ESSAY QUESTIONS S-A E  224 Fraud experts often say that there are three primary factors that contribute to employee fraud. Identify the three factors and explain what is meant by each. S-A E  225 Important objectives of a system of internal controls are to safeguard assets and to enhance the accuracy and reliability.
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MATCHING 223.Match the items below by entering the appropriate code letter in the space provided. A.Prenumbered documentsG.Bank signature card B.Custody of an asset should be kept H.Payee separate from the record-keeping I.Maker for that assetJ.Canceled checks C.Cash registers, garment sensors K.NSF checks and burglar alarms are examplesL.Outstanding checks D.Bonding employeesM.Petty cash receipt E.CollusionN.Cash equivalents F.CashO.Voucher system _____              1.Segregation of duties. _____              2.One.
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168.The accounts receivable turnover is computed by dividing a.total sales by average net accounts receivable. b.net credit sales by average net accounts receivable. c.total sales by ending net accounts receivable. d.net credit sales by ending net accounts receivable. 169.Which receivables accounting and reporting issue is not essentially the same for IFRS and GAAP? a.The use of.
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98.In 2016, Winslow Company had net credit sales of $1,250,000. On January 1, 2016, Allowance for Doubtful Accounts had a credit balance of $25,000. During 2016, $32,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of.
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118.Kirk Furniture factors $800,000 of receivables to Sulu Factors, Inc. Sulu Factors assesses a 4% service charge on the amount of receivables sold. Kirk Furniture factors its receivables regularly with Sulu Factors. What journal entry does Kirk make when factoring these receivables? a.Cash768,000 b.Cash768,000 c.Cash800,000 d.Cash768,000 119.When customers make purchases with a national credit card,.
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EXERCISES Ex. 180 Match each of the following principles of internal control with the appropriate description below. A.Establishment of responsibilityD.Physical controls B.Segregation of dutiesE.Independent internal verification C.Documentation proceduresF.Human resource controls _____ 1.Involves the review, comparison, and reconciliation of data prepared by other employees. _____ 2.Provide evidence that transactions and events have occurred. _____ 3.Includes the.
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119.Deposits in transit a.have been recorded on the company's books but not yet by the bank. b.have been recorded by the bank but not yet by the company. c.have not been recorded by the bank or the company. d.are checks from customers which have not yet been received by the company. 120.In preparing a bank.
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BE 184 Twain Company has the following accounts in its general ledger at July 31: Accounts Receivable $40,000 and Allowance for Doubtful Accounts $2,500. During August, the following transactions occurred. Oct.15Sold $16,000 of accounts receivable to Nelson Factors, Inc. who assesses a 4% finance charge. 25Made sales of $900 on VISA credit cards..
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Ex. 186 The petty cash fund of $200 for George Company appeared as follows on December 31, 2016: Cash$59.40 Petty cash vouchers Freight in$27.60 Postage40.00 Balloons for a special occasion68.00 Instructions 1.Briefly describe when the petty cash fund should be replenished. Because there is cash on hand, is there a need to replenish the fund at year end.
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BRIEF EXERCISES BE 168 Match the principle of internal control to each of the following cases. a)Establishment of responsibility b)Segregation of duties c)Accountability for assets d)Documentation procedures e)Physical controls _____1.Cash is locked in a safe overnight. _____2.Employees who receive shipments of goods do not have access to the accounting records for merchandise. _____3.Shipping documents are prenumbered. _____4.The bookkeeper does not have.
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89.A petty cash fund should be replenished a.every day. b.at the end of every accounting period. c.once a year. d.as soon as an expense is paid from the fund. 90.A petty cash fund should not be used for a.postage due. b.loans to the petty cash custodian. c.taxi fares. d.customer lunches. 91.The size of the petty cash fund is dependent on a.the.
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78.Allowance for Doubtful Accounts on the balance sheet a.is offset against total current assets. b.increases the cash realizable value of accounts receivable. c.appears under the heading "Other Assets." d.is offset against accounts receivable. 79.When an account is written off using the allowance method, the a.cash realizable value of total accounts receivable will increase. b.cash realizable value of.
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COMPLETION STATEMENTS               206.Internal control consists of the related methods and measures adopted to ____________ its assets and enhance the ______________ and ______________ of its accounting records.               207.The three main factors that contribute to fraudulent activity are depicted by the _______________.               208.The principle of internal control that prevents one individual from.
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159.Sarbanes Oxley applies to a.U.S companies but not international companies. b.international companies but not U.S. companies. c.U.S. and Canadian companies but not other international companies. d.companies listed on U.S. exchanges. 160.The fraud triangle applies to a.U.S companies but not international companies. b.international companies but not U.S. companies. c.U.S. and Canadian companies but not other international companies. d.U.S and international.
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149.Having different individuals receive cash, record cash receipts, and hold the cash is an example of a.establishment of responsibility. b.segregation of duties. c.documentation procedures. d.independent internal verification. 150.Storing cash in a company safe is an application of which internal control principle? a.Segregation of duties b.Documentation procedures c.Physical controls d.Establishment of responsibility 151.Using prenumbered checks and having an approved invoice for.
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11.Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible. 12.Allowance for Doubtful Accounts is a contra asset account. 13.Cash realizable value is determined by subtracting Allowance for Doubtful Accounts from Net Sales. 14.Generally accepted accounting principles require that the direct write-off method be.
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S-A E 226 Your friend, Carlos, has opened a movie theater. Carlos states that he does not have time to develop and implement a system of internal controls. a.Provide Carlos with the objectives of a system of internal controls. b.Explain to Carlos why he should develop a system of internal controls. S-A E  227 (a)Identify.
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158.Writing off an uncollectible account under the allowance method requires a debit to a.Accounts Receivable. b.Allowance for Doubtful Accounts. c.Bad Debt Expense. d.Uncollectible Accounts Expense. 159.When the allowance method of recognizing bad debts expense is used, the entry to recognize that expense a.increases net income. b.decreases current assets. c.has no effect on current assets. d.has no effect on net.
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48.Which of the following would require a compound journal entry? a.To record merchandise returned that was previously purchased on account. b.To record sales on account. c.To record purchases of inventory when a discount is offered for prompt payment. d.To record collection of accounts receivable when a cash discount is taken. 49.Which of the following would.
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Ex. 194 White Water Kayak Company's bank statement for the month of September showed a balance per bank of $6,900. The company's Cash account in the general ledger had a balance of $5,573 at September 30. Other information is as follows: (1)Cash receipts for September 30 recorded on the company's books were.
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128.The two key parties to a promissory note are the a.maker and a bank. b.debtor and the payee. c.maker and the payee. d.sender and the receiver. 129.When calculating interest on a promissory note with the maturity date stated in terms of days, the a.maker pays more interest if 365 days are used instead of 360. b.maker pays.
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129.Hot Sox Company had checks outstanding totaling $18,200 on its May bank reconciliation. In June, Hot Sox Company issued checks totaling $78,900. The July bank statement shows that $71,400 in checks cleared the bank in July. A check from one of Hot Sox Company's customers in the amount of $2,200.
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Ex. 198 The cash balance per books for Potter Company on September 30, 2015 is $10,740.93. The following checks and receipts were recorded for the month of October, 2015:            Checks                 Receipts      No. Amount No. Amount   Amount Date 27$372.9632$   578.84$843.8610/  5 28$770.6233$1,786.50$941.5410/21 29$257.0034$   921.30$880.5810/27 30$578.5035$   246.03$976.0010/30 31$234.15 In addition, the bank statement for the month of October is presented below: Balance.
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BE 174 Identify whether each of the following items would be (a) added to the book balance, (b) deducted from the book balance in a bank reconciliation, (c) added to the bank balance, or (d) deducted from the bank balance. 1.Deposits in transit 2.Bank service charge 3.Collection of note and interest by bank on.
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Ex. 195 Bell Food Store developed the following information in recording its bank statement for the month of March. Balance per books March 31$  3,664 Balance per bank statement March 31$10,900 ——————————————————————————————————————————— (1)Checks written in March but still outstanding $7,000. (2)Checks written in February but still outstanding $3,100. (3)Deposits of March 30 and 31 not yet recorded.
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68.A reasonable amount of uncollectible accounts is evidence a.that the credit policy is too strict. b.that the credit policy is too lenient. c.of a sound credit policy. d.of poor judgments on the part of the credit manager. 69.Bad Debt Expense is considered a.an avoidable cost in doing business on a credit basis. b.an internal control weakness. c.a necessary.
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79.Allowing only the treasurer to sign checks is an example of a.documentation procedures. b.segregation of duties. c.other controls. d.establishment of responsibility. 80.Blank checks a.should be safeguarded. b.should be pre-signed. c.do not need to be safeguarded since they must be signed to be valid. d.should not be prenumbered. 81.An employee authorized to sign checks should not record a.owner cash contributions. b.mail receipts. c.cash disbursement.
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138.Notes receivable are recognized in the accounts at a.cash (net) realizable value. b.face value. c.gross realizable value. d.maturity value. 139.A note receivable is a negotiable instrument which a.eliminates the need for a bad debts allowance. b.can be transferred to another party by endorsement. c.takes the place of checks in a business firm. d.can only be collected by a bank. 140.A.
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MULTIPLE CHOICE QUESTIONS 38.Claims for which formal instruments of credit are issued as proof of the debt are a.accounts receivable. b.interest receivable. c.notes receivable. d.other receivables. 39.Interest is usually associated with a.accounts receivable. b.notes receivable. c.doubtful accounts. d.bad debts. 40.The receivable that is usually evidenced by a formal instrument of credit is a(n) a.trade receivable. b.note receivable. c.accounts receivable. d.income tax receivable. 41.Which of the following.
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109.If the month-end bank statement shows a balance of $58,000, outstanding checks are $15,000, a deposit of $7,000 was in transit at month end, and a check for $600 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is a.$49,400. b.$50,000. c.$50,600. d.$65,400. 110.In preparing.
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69.Which one of the following items would not be considered cash? a.Coins b.Money orders c.Currency d.All of these choices are considered cash. 70.Checks received through the mail should a.immediately be endorsed "For Deposit Only." b.be sent to the accounts receivable subsidiary ledger clerk for immediate posting to the customer's account. c.be cashed at the bank as soon as.
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BRIEF EXERCISES BE 180 Record the following transactions for Cyrus Company. 1.On August 4, Cyrus sold merchandise on account to Swift Company for $700, terms 2/10, n/30. 2.On August 7, Cyrus granted Swift a sales allowance and reduced the cost of the merchandise by $50 because some of the goods were slightly damaged. 3.On August.
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139.Smothers Company assembled the following information in completing its March bank reconciliation: balance per bank $7,640; outstanding checks $1,700; deposits in transit $2,600; NSF check $130; bank service charge $40; cash balance per books $8,800. As a result of this reconciliation, Smothers will a.reduce its cash account by $40. b.reduce its cash.
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Ex. 191 On April 30, the bank reconciliation of Baxter Company shows three outstanding checks: no. 354, $650, no. 355, $820, and no. 357, $615. The May bank statement and the May cash payments journal show the following. Bank Statement Cash Payments Journal                    Checks Paid                                  Checks Issued               Date Check No. Amount Date Check No. Amount 5/4 354 650 5/2 358 159 5/2 355 820 5/5 359 275 5/17 358 159 5/10 360 890 5/12 359 275 5/15 361 850 5/20 360 890 5/22 362 750 5/29 363 480 5/24 363 480 5/30 362 750 5/29 364 870 Ex. 191(Cont.) Instructions Using step.
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58.Cosmos Company on July 15 sells merchandise on account to Cajon Co. for $6,000, terms 2/10, n/30. On July 20 Cajon Co. returns merchandise worth $1,000 to Cosmos Company. On July 24 payment is received from Cajon Co. for the balance due. What is the amount of cash received? a.$4,800 b.$4,900 c.$5,000 d.$6,000 59.The existing.
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S-A E 230(Communication) Legalaid is a legal office management franchise. There are currently twenty-five legal offices managed by a Legalaid franchisee. One of the services provided to franchisees is assistance in training various staff members. Legalaid is preparing a manual for the front office staff to use as a reference guide. It.
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99.All of the following are parties to a check except the a.bank. b.Federal Reserve. c.maker. d.payee. 100.When opening a bank checking account, a signature card a.indicates to whom money is to be paid. b.indicates each person authorized to sign checks on the account. c.is attached to all pre-printed checks. d.is required only when dealing with an out-of-state bank. 101.Which one.
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148.When a note receivable is honored, Cash is debited for the note's a.net realizable value. b.maturity value. c.gross realizable value. d.face value. 149.Xenox Company had net credit sales during the year of $1,300,000 and cost of goods sold of $800,000. The balance in accounts receivable at the beginning of the year was $185,000, and the.
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Ex. 202 The cash records of George Company show the following: 1.In September, deposits per the bank statement totaled $36,800; deposits per books $38,000; and deposits in transit at September 30 were $4,900. 2.In September, cash disbursements per books were $35,600; checks clearing the bank were $38,900; and outstanding checks at September 30.
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TRUE-FALSE STATEMENTS 1.Trade receivables occur when two companies trade or exchange notes receivables. 2.Other receivables include nontrade receivables such as loans to company officers. 3.Both accounts receivable and notes receivable represent claims that are expected to be collected in cash. 4.Receivables are valued and reported in the balance sheet at their gross amount less.
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S-A E  228 The preparation of a bank reconciliation is an important cash control procedure. If a company deposits cash receipts daily and makes all cash disbursements by check, explain why the cash balance per books might not agree with the cash balance shown on the bank statement. Identify specific examples.
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