kimmelsampleexam3

kimmelsampleexam3 - ACCT201 Exam 3 Spring 2007 Name Date 1...

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ACCT201 Exam 3 Spring 2007 Name: __________________________ Date: _____________ 1. The reconciliation of the cash register tape with the cash in the register is an example of A) other controls. B) independent internal verification. C) establishment of responsibility. D) segregation of duties. 2. The following credit sales are budgeted by Sanchez Company: The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of March is A) $185,160. B) $168,000. C) $180,000. D) $176,400. 3. The interest on a $6,000, 6%, 60-day note receivable is A) $30. B) $360 C) $180. D) $60. 4. A company has net credit sales of $900,000 for the year and it estimates that uncollectible accounts will be 2% of sales. If Allowance for Doubtful Accounts has a credit balance of $1,000 prior to adjustment, its balance after adjustment will be a credit of A) $18,000 B) $19,000 C) $17,980 D) $17,000 Page 1 January $102,000 February 150,000 March 210,000 April 180,000
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ACCT201 Exam 3 Spring 2007 5. Under the allowance method, Bad Debt Expense is recorded A) when an individual account is written off. B) when the loss amount is known. C) for an amount that the company estimates it will not collect. D) several times during the accounting period. 6. A plant asset with a cost of $90,000 and accumulated depreciation of $85,500 is sold for $10,500. What is the amount of the gain or loss on disposal of the plant asset? A) $10,500 loss B) $6,000 loss C) $6,000 gain D) $10,500 gain 7. If a company fails to record estimated bad debts expense, A) cash realizable value is understated. B) expenses are understated. C) revenues are understated. D) receivables are understated. 8. A NSF check should appear in which section of the bank reconciliation? A) Addition to the balance per books B) Deduction from the balance per bank C) Addition to the balance per bank D) Deduction from the balance per books 9. Equipment costing $20,000 with a salvage value of $4,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 6 years and no change in the salvage value, the deprecia- tion expense for year 3 would be A) $3,000. B) $2,667. C) $4,000. D) $2,000. Page 2
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ACCT201 Exam 3 Spring 2007 10. The following information was taken from Mounds Company cash budget for the month of April If the company has a policy of maintaining end of the month cash balance of $25,000, the amount the company would have to borrow is A) $29,000. B) $5,000. C) $2,000. D) $0. 11. General Molding is building a new plant that will take three years to construct. The construction will be financed in part by funds borrowed during the construction period. There are significant architect fees, excavation fees, and building permit fees. Which of
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kimmelsampleexam3 - ACCT201 Exam 3 Spring 2007 Name Date 1...

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