ACC 422 Week 5 Final Exam
1) Which of the following is NOT considered cash for financial reporting purposes?
A. Postdated checks and I.O.U.’s
B. Money orders, certified checks, and personal checks
C. Petty cash funds and change funds
D. Coin, currency, and available funds
2) What is the preferable presentation of accounts receivable from officers, employees, or affiliated companies on a balance sheet?
A. As assets but separately from other receivables.
B. As offsets to capital.
C. As trade notes and accounts receivable if they otherwise qualify as current assets.
D. By means of footnotes only.
3) Which of the following items should NOT be included in the Cash caption on the balance sheet?
A. Amounts on deposit in checking account at the bank
B. Coins and currency in the cash register
C. Postage stamps on hand
D. Checks from other parties presently in the cash register
4) The advantage of relating a company’s bad debt expense to its outstanding accounts receivable is that this approach
A. is the only generally accepted method for valuing accounts receivable.
B. gives a reasonably correct statement of receivables in the balance sheet.
C. makes estimates of uncollectible accounts unnecessary.
D. best relates bad debt expense to the period of sale.
5) Which of the following is a generally accepted method of determining the amount of the adjustment to bad debt expense?
A. A percentage of accounts receivable NOT adjusted for the balance in the allowance
B. A percentage of sales adjusted for the balance in the allowance
C. An amount derived from aging accounts receivable and NOT adjusted for the balance in the allowance
D. A percentage of sales NOT adjusted for the balance in the allowance
6) Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does...