CH7
Daily Double - bank reconciliation problem
Interest receivable and loans to company officers are included in:
a. Non-trade receivables.
b. Trade receivables.
c. Notes receivable.
d. Accounts receivable.
A. Non-trade receivables
A company sold for $2,000 a plant asset that had a cost of $10,000 and accumulated depreciation of $7,500. The company had a:
A. loss of 500
The value of all favorable attributes that relate to a company that are not attributable to any other specific asset.
Goodwill
A 120-day promissory note is issued on April 4. Its maturity date is:
B. August 2nd
When a company replenishes its petty cash fund, if the debits do not equal the credits in the journal entry, the account __________________________ is used to balance the journal entry.
cash over and short
The Allowance for Doubtful Accounts has a $400 debit balance. An aging schedule shows that total estimated bad debts is $3,600. The adjusting entry will require a debit and a credit for:
A. 4000
Massey Corporation purchased a piece of land for $50,000. It paid attorney’s fees of $5,000 and brokers’ commissions of $4,000. An old building on the land was torn down at a cost of $2,000, and proceeds from the scrap were $500. The total to be debited to the Land account is:
B. 60,500
Law that requires publicly traded companies to maintain adequate systems of internal control.
Sarbanes-Oxley
A company holds a 90-day, 12%, $18,000 note which it received on December 1. The adjusting entry for this note on December 31 includes a:
C. credit to interest revenue for 180
______________________, ____________ and ______________________ are examples of cash equivalents.
treasury bills, money market funds, commercial paper
If a company uses the allowance method for uncollectible accounts, then the entry to record the write-off of an uncollectible account is:
Accounts Receivable
Accounts Receivable
Allowance for Doubtful Accounts
Allowance for Doubtful Account
B. Allowance for Doubtful Accounts
Accounts Receivable
At the beginning of the year Powers Company purchased a piece of machinery for $50,000. It has a salvage value of $5,000, an estimated useful life of 9 years, and estimated units of output of 90,000 units. Actual units produced during the first year were 11,000.
Assume that Powers Company purchased the equipment on October 1st. Using the straight-line method, what will the company record for depreciation expense on December 31?
D. 1250
The threat of nonpayment from a single large customer or class of customers that could adversely affect the financial health of the company.
Concentration of credit risk
What principle does this describe?
Different individuals should be responsible for related activities.
The responsibility for record-keeping for an asset should be separate from the physical custody of that asset.
Segregation of Duties
Which of the following is not considered cash?
C Short - term investment in stock
Morrison Corporation uses the allowance method for estimation uncollectible accounts. Please record journal entries for the following items (all are SO3):
will be shared in session
Quick Corporation retired a piece of equipment that had cost $8,000 and had accumulated depreciation of $7,000. The journal entry to record the retirement will include a:
D. Debit to loss on disposal for 1000
A finance company or bank that buys receivables from businesses for a fee and then collects the payments directly from the customers.
Factor
What principle does this describe?
Control is most effective when only one person is responsible for a given task.
Establishing responsibility often requires limiting access only to authorized personnel, and then identifying those personnel.
Establishment of responsibility
Give the format for a cash budget
Cash
+Cash Receipts
Total Cash
-Disbursements
=Excess(deficiency) of cash
Financing
+Borrowings
-Repayments
-Interest
Ending Cash
A company holds a 90-day, 12%, $18,000 note which it received on December 1. The adjusting entry for this note on December 31 includes a:
C. credit to interest revenue for 180
Townsend Corporation owns a piece of machinery it had purchased 3 years ago for $40,000. The machinery has an estimated salvage value of $5,000 and an estimated useful life of 10 years. At the end of 2009, the Accumulated Depreciation account had a balance of $10,500. On April 1, 2011, the corporation sold the machinery for $27,000. Townsend uses straight-line depreciation for its machinery.
REQUIRED: Please record the following in “T” Accounts.
a.
Depreciation expense 3500
Accumulated Depreciation 3500
b.
Cash 27000
Accumulated Depreciation 14875
Equipment 40000
Gain on Sale of Equipment 1875
Define Each:
1. A word, phrase, jingle, or symbol that distinguishes or identifies a particular enterprise or product.
2. An exclusive right issued by the U.S. Patent Office that enables the recipient to manufacture, sell, or otherwise control an invention for a period of 20 years from the date of the grant.
3. An exclusive right granted by the federal government allowing the owner to reproduce and sell an artistic or published work.
1. Trademark
2. Patent
3. Copyright
A company’s average total assets are $200,000, depreciation expense is $10,000, and accumulated depreciation is $60,000. Net sales total $250,000. The asset turnover ratio is:
.8 times.
1.25 times.
3.33 times.
4.17 times.
1.25 times