Question : 71. The cash records and the bank statement of Frankel Company : 1228524

71. The cash records and the bank statement of Frankel Company showed the following at the end of February 2010: Outstanding checks as of the beginning of February 2010, $8,000; checks written by Frankel Company according to their books during February 2010, $50,000; and checks cleared by the bank during February 2010, $54,000. How much were the outstanding checks at the end of February 2010? 
A. $2,000
B. $4,000
C. $6,000
D. $8,000

72. The cash account and the December bank statement of Gomez Company showed the following: deposits made by Gomez Company during December $90,000; deposits reflected on the December bank statement, $88,000; and deposits in transit on December 1, $5,000. How much were the deposits in transit at the end of December? 
A. $10,000
B. $7,000
C. $5,000
D. $2,000

73. When preparing the monthly bank reconciliation, the accountant for Farris Corporation discovered that a check correctly written to one of Farris’ suppliers for $159 had been incorrectly recorded in the books as $195. Which of the following statements is correct with respect to the bank reconciliation process? 
A. The cash balance per the books will be decreased.
B. The cash balance per the bank statement will be increased.
C. The cash balance per the bank statement will be decreased.
D. The cash balance per the books will be increased.

74. When preparing a bank reconciliation, which of the following would be deducted from the company’s cash balance? 
A. Interest income paid by the bank.
B. The dollar amount of deposits in transit.
C. The dollar amount of outstanding checks.
D. The bank service charges included on the bank statement.

75. Merchandise was sold on credit for $10,000, terms 2/10, n/30. Which of the following journal entry descriptions correctly describes the cash collection? 
A. Cash is debited for $10,000 and accounts receivable is credited for $10,000 if the collection is within the discount period.
B. Cash is debited for $10,000, accounts receivable is credited for $9,800 and sales discounts is credited for $200 if the collection is within the discount period.
C. Cash is debited for $10,000, accounts receivable is credited for $9,800, and sales discounts is credited for $200 if the collection is after the discount period.
D. Cash is debited for $10,000, accounts receivable is credited for $10,000 if the collection is after the discount period.

76. Merchandise was sold on credit for $30,000, terms 3/15, n/30. Which of the following journal entry descriptions correctly describes the cash collection? 
A. Cash is debited for $29,100 and accounts receivable is credited for $29,100 if the collection is within the discount period.
B. Cash is debited for $29,100, sales discounts is debited for $900, and accounts receivable is credited for $30,000 if the collection is within the discount period.
C. Cash is debited for $30,000, accounts receivable is credited for $29,100, and sales discounts is credited for $900 if the collection is within the discount period.
D. Cash is debited for $29,100 and accounts receivable is credited for $29,100 if the collection is after the discount period.

77. Which of the following does not correctly describe the following journal entry?
   
A. Current assets increase.
B. Gross profit decreases.
C. Net sales decreases.
D. Operating income is not affected.

78. Which of the following correctly describes the following journal entry?
   
A. The gross profit percentage remains the same.
B. Operating income decreases.
C. Current assets increase.
D. Net sales increases.

79. Which of the following does not correctly describe the following journal entry?
   
A. Current assets decrease.
B. Gross profit decreases.
C. Net sales decreases.
D. Operating expenses increase.

80. The Ward Company has provided the following information:
? Net sales totaled $750,000.
? Beginning net accounts receivable was $65,000.
? Ending net accounts receivable was $85,000.
What was Ward’s receivable turnover ratio? 
A. 10.0
B. 8.8
C. 11.54
D. 5.0