Question :
41.A company that maintains a cash balance of more than : 1241858
41.A company that maintains a cash balance of more than is necessary for its day-to-day needs
a.is likely to have cash flow problems.
b.is not using working capital to its ideal advantage.
c.is likely to have a very low solvency.
d.has a problem with physical controls.
42.Accounts used to cover day-to-day office expenses are referred to as
a.petty cash.
b.bad debts.
c.cash restrictions.
d.compensating balances.
43.A cash discount differs from a trade discount in that the cash discount is
a.a reduction in the per unit price of an item if a certain quantity is purchased.
b.received in currency instead of by a check from the customer.
c.typically associated with consumers and a trade discount associated with commercial vendors or suppliers.
d.the same as a mark down.
44.The gross method refers to
a.a method of accounting for uncollectible accounts.
b.the expectation that the customer will not take advantage of a cash discount.
c.a method of reporting cash on the balance sheet.
d.the restriction placed on the company’s bank account by the bank.
45.An exchange rate
a.is the cash amount received from a customer who takes advantage of a cash discount.
b.is the value of one currency in terms of another currency.
c.seldom varies from one accounting period to the next.
d.is ignored by multinational companies.
46.Hedging is used to
a.reduce risks associated with holding receivables denominated in foreign currencies.
b.calculate the current ratio for multinational companies.
c.translate foreign currency into U.S. dollars.
d.‘window dress’ uncollectible accounts.
47.Tyson Corp. uses the aging method to estimate bad debts. The bookkeeper provided the following schedule as of March 30th, 2015:
Account Age
Balance
Noncollection Probability
Current
$50,000
3%
1 — 30 days past due
40,000
4%
31 — 60 days past due
10,000
8%
Over 60 days past due
5,000
15%
What is the amount of receivables deemed uncollectible?
a.$1,650
b.$4,650
c.$3,400
d.$105,000
48.At the beginning of 2015, Cyrus Corp.’s allowance for doubtful accounts is $12,500.
During 2015, $4,250 was written off as uncollectible. At December 31, the company used an aging schedule of accounts receivable and determined that $10,530 of the accounts receivable would probably be uncollectible. What would be the bad debts expense that should be reported on Cyrus’s 2015 income statement?
a. $5,720
b. $26,780
c. $2,280
d.$18,280
49.Before adjusting entries, Kilby Corp’s accounts receivable and allowance for doubtful accounts are $745,000 and $7,000 (credit balance), respectively. Using an aging schedule of accounts receivable, it is determined that $60,000 of the accounts receivable would probably be uncollectible. Calculate the net realizable value of Truman’s receivables at year end.
a. $681,000
b. $695,000
c. $809,000
d. $685,000
50.The following information concerning the current assets and current liabilities of
Mason Company at December 31, 2015, is presented below.
Current Assets
Cash
$6,700
Accounts Receivable
$7,900
Less Allowance
(70)
7,830
Inventory
2,270
Prepaid expenses
500
Total
$17,300
Current Liabilities
Accounts payable
$9,000
Wages payable
500
Taxes payable
200
Rent payable
1,600
Notes payable
2,000
Total
$13,300
Based on this information, how would the current ratio be affected if Masoncollects the accounts receivable and then uses some of the cash to pay off the accounts payable?
a. The current ratio would increase from 1.30 to 1.93.
b. The current ratio would increase from 0.74 to 4.02.
c. The current ratio would decrease from 1.30 to 0.62.
d. The current ratio would increase from 1.09 to 1.61.
