1. A NSF check should appear in which section of the bank reconciliation? (Points : 2) Addition to the balance per books. Deduction from the balance per bank. Addition to the balance per bank. Deduction from the balance per books. |
2. A consequence of separation of duties is that (Points : 2) theft by employees becomes impossible. operations become extremely inefficient because of constant training of employees. more employees will need to be bonded. theft is still possible when several employees are involved. |
3. Which of the following is not included in the cash disbursements section of a cash budget? (Points : 2) Payments for materials. Payments
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Creates a claim against the maker for the amount of principal only. Is one that is not paid in full within 10 days of maturity. |
14. The following information is related to December 31, 2011 balances.
During 2012 sales on account were $145,000 and collections on account were $86,000. Also, during 2012 the company wrote off $8,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $54,000. The change in the cash realizable value from the balance at 12/31/11 to 12/31/12 was (Points : 2) $50,000 increase. $59,000 increase. $42,000 increase. $51,000 increase. |
15. If a company sells its accounts receivables to a factor (Points : 2) the seller pays a commission to the factor. the factor pays a commission to the seller. there is a gain on the sale of the receivables. the seller defers recognition of sales revenue until the account is collected. |
16. The face value of a note refers to the amount (Points : 2) that can be received if sold to a factor. borrowed plus interest received at maturity from the maker. at which the note receivable is recorded. remaining after a service charge has been deducted. |
17. Net credit sales for the month are $900,000. The accounts receivable balance is $180,000. The allowance is calculated as 5% of the receivables balance
The company's management estimates that 2.5% of net credit sales will be uncollectible. Net credit sales are $115,000. What will be the amount of uncollectible accounts expense reported on the income statement?
A line of credit is an informal agreement that permits a company to borrow up to a prearranged limit
1. Indicate which statement you would examine the fine each of the following items: income statement, balance sheet, retained earnings statement, or statement of cash flows
The beginning cash balance for April, is the cash from March 31 in the Asset section of the balance sheet. In the merchandise purchases budget, in April, we need 50% of March purchases (that amount is also given to us 3/31 Accounts payable of $100,000 on page 415). Therefore, Total cash disbursements for April is (50% x $316,000 April purchases) + ($100,000 remaining March purchases to be paid) = $258,000.
a. Is computed by dividing net credit sales for the accounting period by the cash realizable value of accounts receivable on the last day of the accounting period.
It is working efficiently within its resources and does not require any additional funds from outside resources for its operations. Its plan to pay off its debt by applying the company’s profits to repay long term debt is a good plan for the company to lessen incidental expenses that relates to it. The company should regularly review its performance and match it against the industry mark in order to ensure that it is functioning at an optimum and effective level which is beneficial to its
The number of days receivables equals 47 which represents the number of days in receivables. The older an account receivable remains the more difficult it will be to collect.
1. As of December 31, 2011, what amount, if any, of sales due should be recognized in eVade’s financial statements?
The balance sheet is considered a point in time statement because it elaborates on the current position of the organization. Based on the balance sheet, the organization is able to make an educated decision to know if it’s the best time to pursue additional business. The balance sheet is usually reviewed by a creditor when searching for new opportunities. Basically, the creditor determines the company’s position by subtracting the company 's liabilities from the assets. Liabilities are the debts and obligations a facility, regardless of the magnitude of the business. Once the liabilities have been subtracted from the assets, a stakeholder 's equity is determined.
Objective: Prepare journal entries to account for transactions related to accounts receivable and bad debt using both percentage of sales and the percentage of receivables methods.
By using the consolidated income statements, balance sheet and cash flow statement, we can assess the company’s financial position. On the income statement, the company’s operation revenue increased by 4.5% ($393.4 million) from year 2006 while its operating income decreased by $65.1 million in the same period. Without considering the net-cash settlement feature expense recorded in 2007, operating income increased $103.6 million. Even though including the net-cash settlement feature
Accounts receivable, net of allowance for doubtful accounts of $208 and $102 as of December 31, 2011 and 2010, respectively
Compute the amount of gross profit to be recognized from the installment sale in 2006, 2007, 2008, 2009, and 2010 using point of delivery revenue recognition. Ignore interest charges.
Support: The Company’s revenues increased considerably (19%). However, the Accounts receivables also increased significantly (38%). Increase in revenues are generally associated with a proportional increase in the allowance for doubtful debts. By not reporting a significant ‘allowable for bad debt accounts’, the company is able to overstate its profits and could be a cause for concern in the long run, if the receivables turn out to be bad.
The three sections of cash budget are (receipts, disbursements, and financing) and the beginning and ending cash balances.