finalexam363-1-19-09

finalexam363-1-19-09 - I have attached below your Final...

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I have attached below your Final Exam. The test is due by midnight Monday, and should be submitted directly to the Assignments newsgroup. The test is an individual effort and should not be discussed with your classmates. Please submit the entire exam with your answers. Good Luck. Financial Accounting II ACC/363 Final Exam (58 points) 49 multiple choice - (1 point each) = 49 points. 3 problems (3 each) – 9 points. 1 Interest is usually associated with a. accounts receivable. b. notes receivable. c. doubtful accounts. d. bad debts. 2. A debit balance in the Allowance for Doubtful Accounts a. is the normal balance for that account. b. indicates that actual bad debt write-offs have exceeded previous provisions for bad debts. c. indicates that actual bad debt write-offs have been less than what was estimated. d. cannot occur if the percentage of sales method of estimating bad debts is used. 3. Two methods of accounting for uncollectible accounts are the a. allowance method and the accrual method. b. allowance method and the net realizable method. c. direct write-off method and the accrual method. d. direct write-off method and the allowance method. 4. If an account is collected after having been previously written off, a. the allowance account should be debited. b. only the control account needs to be credited. c. both income statement and balance sheet accounts will be affected. d. there will be both a debit and a credit to accounts receivable. 5. The direct write-off method of accounting for bad debts a. uses an allowance account. b. uses a contra-asset account. c. does not require estimates of bad debt losses. d. is the preferred method under generally accepted accounting principles.
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6. Winter Furniture factors $400,000 of receivables to Fair Factors, Inc. Fair Factors assesses a 2% service charge on the amount of receivables sold. Winter Furniture factors its receivables regularly with Fair Factors. What journal entry does Winter make when factoring these receivables? a. Cash . ................................................................................ 392,000 Loss on Sale of Receivables . .......................................... 8,000 Accounts Receivable . ............................................. 400,000 b. Cash . ................................................................................ 392,000 Accounts Receivable . ............................................. 392,000 c. Cash . ................................................................................ 400,000 Accounts Receivable . ............................................. 392,000 Gain on Sale of Receivables . ................................. 8,000 d. Cash . ............................................................................... 392,000 Service Charge Expense . .............................................. 8,000 Accounts Receivable . ........................................... 400,000 7. Hardy Clinic purchases land for $90,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The
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finalexam363-1-19-09 - I have attached below your Final...

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