Chapter 33 Practice Quiz

Operating information is needed on a week-to-week basis for a company to conduct business
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This ratio is calculated by diving the total payments for a specific period of time by the total charges, with the write-offs deducted from the total charges.Net Collection RatioWhat is true about the basic accounting formula?Liabilities are the debts or accounts payable; Assets are the money and items of value in a business; Assets-Liabilities=Net Worth. All of these answersThe turnaround time, or A/R ratio, has a goal of six months or less.true/FALSE The turn around or A/R ratio, has a goal of two months or less.Write-offs are charges that are deemed uncollectable by any business.TRUE/falseVerifying an invoice means checking that it is accurate and complete.TRUE/falseUsing the Cost Ratio, what would the ratio be for the month with $200,000 in radiology expenses with 500 procedures?400Using the Gross Collection Ratio what would be the Ratio with total payments of $400,000 and total charges of $800,000?.5What term describes an incoming bill?Purchase InvoiceWhen the supplier sends ordered goods to a business, what else is also sent to the business to show the amount owed for the goods?InvoiceIf you add cash in any petty cash box to the totals of the vouchers, the answer should be equal to what?The amount at which the fund was set up.What summary report lists the total petty cash payments for each type of expense?Petty Cash SummaryPutting an amount of cash in the petty cash fund to bring it back up to its original amount is known as:ReplenishingIf an invoice is dated September 10 and the terms are 3/10 EOM, n/60, what is the latest date on which the discount may be taken?October 10In the invoice terms n/30, what is the credit period?30 daysThe Income Statement:demonstrates the profit and expenses for a given month and includes year-to-date information for a given year.Balance Sheet is also known as...statement of financial position It reveals a companies assets, liabilities, and owner's equity.Collection ratios should be reviewed monthly.TRUE/false Collection Ratios should be reviewed quarterly or annuallyA petty cash summary is a report that lists the total petty cash payments for each type of expense.TRUE/falseAccounting is:more than bookkeepingA petty cash fund:requires a voucher for payments; is for small payments; when it's nearly depleted, another check is written for the difference between the established original fund amount and the remaining amount.To the supplier, a purchase invoice is an outgoing bill sent to a customer.true/FALSE To the supplier, a sales invoice is an outgoing bill sent to a customer.With a Gross Collection Ratio, the higher the ratio the better because this shows the percentage of money flow back into the office.TRUE/falseThe Gross Collection Ratio is also known as the adjusted collection ratio.true/FALSEUsing the Net Collection Ratio, what would be the ratio with total payments of $400,000, total charges of $850,000 and write offs of$50,000?.5If the invoice terms are 2/20, n/30, what percentage discount may be taken if the invoice is paid within the discount period?2%Operating information provides the basis for managerial accounting.TRUE/falseAnother term for net worth is:owner's equityAll of the following is information contained on an invoice, except:invoice details company details PACKING SLIP feesAn invoice...includes itemization of goods and purchasesThis type of accounting is the study and analysis of financial data as it applies to operational issues within a company.managerial accountingUsing the Accounts Receivable Ratio or A/R ratio formula, what would the A/R Ratio with a current A/R balance of $90,000 and an average monthly gross production of $30,000?3.0Write-offs may be any of the following:professional courtesy discounts; bad debt; contractual discounts All of the aboveWhat term describes an outgoing bill?sales invoiceWhat form is used to record information about a petty case expense?petty cash voucherIf the invoice terms are 2/10, n/30, what is the discount period?10 days