Question :
87. Which of the following items would cause cash per the : 1229753
87. Which of the following items would cause cash per the bank statement to be smaller than the balance of cash shown in the accounting records?
A. Outstanding checks.
B. Interest earned on the average balance of the checking account.
C. Check no. 824, in the amount of $620.30, is recorded by the bank as $602.30.
D. Deposits in transit.
88. Which of the following items would cause cash per the bank statement to be larger than the balance of cash shown in the accounting records?
A. Bank service charges.
B. Deposits in transit.
C. Outstanding checks.
D. NSF check from one of the depositor’s customers.
89. When a petty cash fund is in use:
A. Petty cash is debited only when the fund is replenished.
B. The general bank account is debited only when this fund is established.
C. Small payments are made out of cash receipts before they are deposited.
D. Expenses paid from the fund are recorded when the fund is replenished.
90. When preparing a bank reconciliation, bank service charges will:
A. Increase the balance per depositor’s records.
B. Decrease the balance per depositor’s records.
C. Increase the balance per the bank statement.
D. Decrease the balance per the bank statement.
91. The financial statements of Baxter Corporation include an Unrealized Holding Gain on Investments. This item:
A. Is included in the income statement.
B. Is shown as a reduction in total stockholders’ equity.
C. Indicates that Baxter’s marketable securities have a current market value higher than cost.
D. Indicate that Baxter Corporation sold marketable securities during the period at a gain.
92. Accounts receivable are classified as current assets:
A. Only if convertible into cash within 60 days or sooner.
B. Only if the allowance method is used to estimate the uncollectible accounts.
C. Only if convertible into cash within one year.
D. Whenever the accounts receivable arise from “normal” sales of merchandise to customers, regardless of the credit terms.
93. Accounts receivable appear in the balance sheet:
A. As current assets, combined with cash and cash equivalents.
B. As current assets, immediately after cash and cash equivalents.
C. As either current assets or noncurrent assets, depending on whether the allowance method or the direct write-off method is used to account for uncollectible accounts.
D. Only if the balance sheet method of estimating uncollectible accounts is used.
94. Uncollectible accounts expense:
A. Should not occur if the credit department properly investigates prospective customers who wish to purchase merchandise on credit.
B. Is the amount of cash a business must pay each time a credit customer fails to pay his or her account.
C. Is the amount a business must pay to a collection agency to recover amounts on overdue accounts receivable.
D. Represents the loss in value of accounts receivable that are estimated to be uncollectible.
95. When reading a bank statement, which reference indicates an increase in the cash balance?
A. Debit Memorandum.
B. Credit Memorandum.
C. NSF Check.
D. Service Charge.
96. The Allowance for Doubtful Accounts represents:
A. Cash set aside to make up for bad debt losses.
B. The amount of uncollectible accounts written off to date.
C. The difference between total credit sales and collections on credit sales.
D. The difference between the face value of accounts receivable and the net realizable value of accounts receivable.
