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Account Test III Revised
Terms in this set (39)
A retailer has 3% credit/debit card service fees deducted from the proceeds from each sale. The retailer has $1,700 in sales for the day. The journal entry to record these sales would be to:
When companies extend credit to customers it is called?
Which of the following situations would cause Acme Company to have an NSF check amount on its bank reconciliation?
-A Bad check
After the mailroom employee opens the cash receipts, the checks then go to the?
Controller who then sends it to the Accounting Department.
The _____verifies the amount of the deposit and the total amount posted to the cash account.
Before signing a check to pay for a purchase, the ____ should examine the documents supporting the purchase.
- Authorize check signer
To prevent a second payment for an invoice, the check signer should ___ the documents relating to the transaction.
A bank statement shows the:
-Cash held by the business with the bank
It lists the deposits, withdrawals, and balance of the business's bank account over a stated time period of usually one month.
Deposits in transit are:
-Money that has been received by a company and sent to the bank, but has not been processed and posted to the account yet.
The bank recorded a $56 deposit as a $65.
- This would be corrected by adding or subtracting $9 to or from the bank balance.
Outstanding checks are added or subtracted from the bank balance.
subtracted from the bank balance.
A $450 collection on a note from a customer was reflected on Columbia Electrics bank statement. When doing the bank reconciliation, Columbia should:
Add $450 to their book balance.
Cascade Motors deposited $1,000 into their bank, but the bank statement does not show the deposit. This $1,000 is an example of an
-Deposit in Transit
Are NSF check amounts added or subtracted from the book balance?
-Subtracted from the book balance
Nelson Music deposited a check for $675, but it was recorded on their books as a check from $576. This error of $99 would be.
-Added to Nelsons Book Balance
Lopez motor's bank statement shows a bank balance of $43,267. The statement shows a bank service charge of $50 and a note collection of $760 on Lopez Motors behalf. Lopez Motors book balance should be adjusted by a total of.
Cash equivalents are:
The most liquid assets found within the asset portion of a companys balance sheet.
Exp. Money Market Holdings, Short term government bonds.
U.S Treasury notes must mature within ____ days of the balance sheet in order to be considered cash equivalents.
Which of the following would indicate poor internal control over accounts receivable?
-The same person handling cash receipts also records the accounts receivable transactions.
When a customer fails to pay on their account, it creates an ______.
Patents, goodwill, and trademarks are ____ assets.
Buildings, vehicles, and desks are ____.
Coal, oil, and timber are ___.
Assets the CANNOT be seen, touched, or held are called _____ assets.
Which of the following would not be considered part of the cost of the land?
The total cost allocated to each item in a basket purchase is based upon?
-Relative Fair Values
Henderson Roofing made a basket purchase of three items. Item A was appraised at $35,000: Item B was appraised at $55,000 and item C was appraised at $60,000. The purchase price was $125,000. The amount at which item B should be recorded is:
In accounting, what is the meaning of capitalized?
To record the amount o fan item in a balance sheet account.
Which is NOT a benefit to extending credit to customers?
- bad-debt expenses
What type of account is Allowance for Doubtful Accounts?
-Contra Asset Account
Once an Account Receivable is written off, can a business ever collect that money?
The period end adjusting entry for bad debt expense under the direct write-off method is?
- Allowance for Doubtful Accounts
The journal entry to write off a customers account under the direct write-off method is?
Debit: Allowance for Doubtful Accounts
Credit: Accounts Recievable
Under the direct write-off method, to record the receipt of cash after an account has previously been written off, you would first:
-Remove the amount from Accounts Receivable
A company has $235,000 in credit sales. The company uses the allowance method to account for uncollected accounts. The allowance for Doubtful Accounts now has 7,250 credit balance. If the company estimates 7% of credit sales will be uncollected, what will the amount of the journal entry to record estimated uncollected accounts be?
Credit:Accounts Receivable $218,550
Debit Allowance for Doubtful Accounts 16,450
James is a customer of Tucker, Inc. his current balance due is $1,560. It has been determined that he defaulted on his account. If the company uses the direct write-off method, what entry is necessary to write off the $1,560.
-Allowance for Doubtful Accounts
Ashley is a customer of Smoky & Co. which uses their allowance method to account for uncollectible accounts. The company wrote off her account of $1,200 on August 15. On October 12, she sent in a payment of $560. What will Smokey & Co. record first to reinstate her account?
Debit: Accounts Receivable
Credit: Allowance for Doubt Accounts
Bestway, Inc. had credit sales for the period of $142,000. The balance in Allowance for Doubtful Accountants is a debit of $643. If Bestway estimates that 2% of credit sales will be collectible, what is the required journal entry to record estimated uncollectible accounts.
Debit:Allowance for bad debts: 2,840
Credit:Accounts Receivable: 139.160
A building was purchased on August 1. It has a salvage value and a useful life years. To the nearest dollar, how much will the depreciation expense for the builidng be for the first year ended in December 31, using the method.
-Straight Line Depriciation
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