Mini Test 2 Form B - Do NOT open your exam until you are...

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1 Do NOT open your exam until you are told to do so! While you are waiting please do the following: 1) Keep your exam closed but pull out your bubble-sheet 2) Using your pencil, fill in your last name & first initial your net id your UIN your section number TA Section Number Jeff Bubble Sheet Input AD1- 8 am 001 Jeff AD2- 9 am 002 Antoinette AD3- 10 am 003 Antoinette AD4-11 am 004 Jimmy AD5-12 pm 005 Jimmy AD6- 1 pm 006
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2 1. In the sales/collection process, the quantity of merchandise sold to a particular customer should be decided based on: A. The quantity of inventory on hand B. The importance of the customer C. The potential for future sales with this customer D. The customer's credit limit E. None of the above 2. Financial statement fraud is harmful to? A. Capital Markets B. Investors C. Society D. All of the above E. B only 3. Bad debt expense should A. appear on the income statement as a contra- revenue. B. appear on the balance sheet as a contra-asset. C. appear on the income statement as part of selling expenses. D. not appear in the financial statements. E. None of the above is correct. 4. No matter what method is being used to account for bad debt, when a customer's uncollectible account is written off, a credit should be made to A. Bad debt expense. B. Allowance for doubtful accounts. C. Sales revenue. D. Accounts receivable. E. None of the above 5. A company that sells magazines and collects subscription fees prior to the publication and distribution of the magazine. As the cash is received in advance from the customers, the company should record a debit to Cash and a credit to A. Unearned revenue. B. Prepaid expenses. C. Sales revenue. D. Accounts payable. E. None of the above is correct.
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3 6. Which of the following controls found in the cash collection portion of the Sales/Collection cycle could be thought of as preventative but not detective? A. Security Cameras B. Bonding Employees C. Background Checks D. A and B only E. B and C only 7. When goods are shipped FOB Shipping Point with freight prepaid by the buyer A. The seller records the freight reimbursement (once it is made) as a selling expense (transportation out) B. The buyer will incur an inventoriable product cost. C. Title Transfers at the point of delivery. D. The inventory should remain on the sellers books until reimbursement (for shipping) is made to the buyer. E. Choices B and C Only F. None of the above 8. Under the installment method, revenue is recognized when the customer A. orders the merchandise. B. receives the merchandise. C. receives the bill. D. makes a cash payment. E. None of the above is correct.
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This note was uploaded on 02/14/2011 for the course ACCY 202 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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Mini Test 2 Form B - Do NOT open your exam until you are...

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