2006WinterTest1 - Winter2006 Term Test #1 Part A (10 marks)...

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Winter2006 Term Test #1 Part A (10 marks) 1. On December 1, 2003, Blue Mountain Snow Removal Service Ltd. receives $1,800 in advance for an agreement to remove snow from a client’s parking lot during the months of December, January, and February. As of December 31, 2003, Blue Mountain Snow Removal Service Ltd: a. would have a $1,200 liability to its client under accrual accounting, and would have a $1,800 liability to its client under cash-basis accounting b. would have recognized $600 revenue under accrual accounting, and would have recognized $1,800 revenue under cash-basis accounting c. would have a $0 liability to its client under accrual accounting, and would have a $1,200 liability to its client under cash-basis accounting d. would have recognized $600 cash under accrual accounting, and would have recognized 1,800 cash under cash-basis accounting 2. If a bookkeeper mistakenly recorded a disbursement of $48 instead of the correct amount of $84, the error would be shown on the bank reconciliation as a: a. $36 deduction to the books b. $36 addition from the books c. $48 addition to the books d. $48 deduction from the books 3. On October 25, 2003, Jefferson & Cole Corp. prints a cheque for November’s rent payment. Jefferson & Cole Corp. mails the cheque on October 27 to the landlord. The landlord receives the cheque October 31 and cashes the cheque on November 2. When should Jefferson & Cole Corp. record the rent expense associated with this transaction? a. October 25, 2003 b. October 27, 2003 c. November 30, 2003 d. November 2, 2003 4. Mitchell & Frank Incorporated use the percentage-of-sales method to estimate uncollectible receivables. Net credit sales for the current year amount to $1,000,000 and management estimates 3% will be uncollectible. Allowance for
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This note was uploaded on 01/16/2011 for the course MGT 120 taught by Professor Zuliani during the Winter '08 term at University of Toronto- Toronto.

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2006WinterTest1 - Winter2006 Term Test #1 Part A (10 marks)...

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