Accounting test 3 review sheet.docx

Accounting test 3 review sheet.docx - Acct 215 Study Guide...

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Acct 215 Study Guide Test Chapters 7,8,9 The test is multiple choice and a problem dealing with payroll transactions Use the handout with the practice problems (distributed in class) Be able to compute bad debt expense using % of sales and balance sheet methods Write off and recovery of bad debt Characteristics of the Allowance method of estimating bad debt All recording of notes receivable and notes payable Honor, Dishonor of Notes Computation of Interest Depreciation methods including characteristics and computations Depletion Amortization Ordinary repair, extraordinary repair, betterment Disposal of Plant Assets Allocation of costs to various plant assets Cost of Plant assets Define Plant assets- ratio that estimates the productive life of an asset; equals the plant asset cost divided by depreciation expense. Current versus Long term liability Computation of interest and recording of Notes Payable Warranty Computation of payroll expenses (similar to handout) 1. A 90-day note issued on April 21 has a maturity date of a. July 17 b. July 18 c. July 19 d. July 20 e. July 21 2. A promissory note: a. Is the day of the credit sale b. Is the day the note was signed c. Is the day the note is due to be paid d. Is the date of the first payment e. Is the last day of the month 3. A promissory note: a. Is a short-term investment for the maker b. Is a written promise to pay a specified amount of money at a certain date c. Is a liability to the payee d. Is another name for an installment receivable e. Cannot be used in payment of an account receivable 4. The person who signs a note receivable and promises to pay the principal and interest in the: a. Maker
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b. Payee c. Holder d. Receiver e. Owner 5. The amount due on the date of maturity for a $6,000, 60-day, 8%, note receivable is: a. 6,000 b. 6,480 c. 5,520 d. 6,080 e. 5,920 6. A method of estimating bad debts expense that involves a detailed examination of outstanding accounting that at their length of time past due is the: a. Direct write-off method b. Aging of accounts receivable method c. Percent of sales method d. Aging of investments method e. Percent of accounts receivable method 7. Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton company wrote off the $3,00 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Best. On July 10, the entry or entries Newton makes to record the recovery of the bad debt is: A. Cash 3,000 Bad Debt Expense 3,000 8. On December 31 of the current year, a company’s unadjusted trial balance included the following: Accounts Receivable, debit balance of $88,790; Allowance for Doubtful Accounts, credit balance of $1,245. What amount should be debited to Bad Debts Expense, assuming 4% of outstanding accounts receivable at the of the current year are considered uncollectible?
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