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Unformatted text preview: Achievement Test 4: Chapters 7 and 8 Name _________________________ Financial Accounting Instructor ______________________ Kimmel, Weygandt, & Kieso Section # _______ Date _________ Part I II III IV V VI Total Points 30 12 20 10 16 12 100 Score PART I MULTIPLE CHOICE (30 points) Instructions Designate the best answer for each of the following questions. ____ 1. The three primary accounting issues associated with accounts receivable are a. valuation, disposing, and statement presentation. b. recognition, valuation, and statement presentation. c. revenue recognition, matching, and statement presentation. d. recognition, valuation, and disposing. ____ 2. Allowance for Doubtful Accounts is presented as a(n) a. addition to Accounts Receivable on the balance sheet. b. operating expense on the income statement. c. deduction from Sales on the income statement. d. contra asset on the balance sheet. ____ 3. Which of the following is not a limitation of internal control? a. Cost of establishing control procedures should not exceed their benefit b. The human element c. Collusion d. The size of the company ____ 4. Which of the following methods and bases of accounting for uncollectible accounts receivable is inconsistent with the proper application of matching? a. Direct write-off method b. Aging of receivables allowance method c. Percentage of receivables basis d. None of the above ____ 5. Companies that fail to maintain an adequate system of internal control a. may be subject to charges of fraud. b. will be automatically dissolved. c. may be subject to fines and officer imprisonment. d. may be forced to sell their assets. Test Bank for Financial Accounting: Tools for Business Decision Making, Fourth Edition AT4-2 ____ 6. The objectives of internal control are to a. prevent unintentional errors and irregularities. b. safeguard assets and enhance the accuracy and reliability of the accounting records. c. enhance the accuracy and reliability of financial statements. d. safeguard assets and prevent thefts. ____ 7. Which one of the following sections would not appear on a cash budget? a. Investing b. Financing needed c. Cash receipts c. Cash disbursements ____ 8. Lack of agreement between the cash balance per bank and the cash balance per books is due to a. errors and poor internal control. b. errors and bank memoranda. c. time lags. d. time lags and errors. ____ 9. The bank statement that a depositor receives from the bank includes a. notification of amounts deducted by the bank to cover such things as the cost of a supply of new checks ordered by the depositor. b. a designation of which checks are still outstanding at the end of the month. c. a designation of which deposits are in transit at the end of the month....
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- Fall '08
- Financial Accounting