CHAPTER 7
CASH AND RECEIVABLES
MULTIPLE CHOICE
—Conceptual
Answer
No.
Description
d
1.
Identification of cash items.
b
2.
Identification of cash items.
d
3.
Classification of travel advance.
d
4.
Classification of bank overdraft.
d
5.
Classification of compensating balances.
d
6.
Definition of trade receivables.
d
7.
Identification of trade receivables.
a
8.
Classification of sales discounts.
c
9.
Valuation of shortterm receivables.
d
10.
Bad debt provision and the matching concept.
a
11.
Bad debts as a percentage of sales.
b
12.
Bad debts as a percentage of sales.
a
13.
Bad debts as a percentage of receivables.
d
14.
Financial statement effect of a note recorded incorrectly.
c
15.
Factoring accounts receivable without recourse.
d
16.
Accounts receivable turnover ratio.
c
*17.
Entry to replenish Petty Cash.
c
*18.
Purpose of Cash Over & Short account.
b
*19.
Classification of bank service charges.
c
*20.
Treatment of bank credits on bank reconciliation.
MULTIPLE CHOICE
—Computational
Answer
No.
Description
d
21.
Calculate effective interest on loan with required compensatory balance.
c
22.
Determine effective annual interest rate of sales discount.
b
23.
Calculate balance of accounts receivable.
b
24.
Calculate net realizable value of accounts receivable.
d
25.
Calculate net realizable value of accounts receivable.
c
26.
Calculate bad debt expense using aging of receivables.
b
27.
Calculate bad debt expense using percent of sales.
a
28.
Calculate bad debt expense using percent of receivables.
b
29.
Determine appropriate interest rate for a zerointerestbearing note.
a
30.
Calculate present value of a zerointerestbearing note.
c
31.
Calculate cash proceeds from transfer of receivables.
c
32.
Entry to record collection of assigned receivables.
*This topic is dealt with in an Appendix to the chapter.
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Test Bank for Intermediate Accounting, Eleventh Edition
MULTIPLE CHOICE
—Computational
(cont.)
Answer
No.
Description
b
33.
Factoring receivables without recourse.
b
34.
Factoring receivables with recourse.
d
*35.
Entry to replenish petty cash.
b
*36.
Calculate correct balance in bank account.
b
*37.
Calculate correct cash balance.
c
*38.
Calculate correct cash balance.
b
*39.
Calculate correct cash balance.
c
*40.
Calculate correct cash balance.
MULTIPLE CHOICE
—CPA Adapted
Answer
No.
Description
a
41.
Determine current net receivables.
d
42.
Calculate adjustment for bad debts.
d
43.
Calculate bad debt expense.
b
44.
Calculate adjustment to write off bad debts.
c
45.
Effect of a writeoff under the allowance method.
d
46.
Determine balance in the Allowance for Doubtful Accounts.
c
47.
Determine interest revenue of a zerointerestbearing note.
c
48.
Determine interest receivable at year end.
b
49.
Assignment and factoring of accounts receivable.
a
*50.
Calculate correct cash balance.
a
*51.
Calculate the cash balance per books.
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 Spring '09
 DR.RAMASWAMY
 ........., Doubtful Accounts, MC MC MC MC MC MC MC MC MC MC MC MC MC

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