Chapter 7 Answers and Excersizes

Chapter 7 Answers and Excersizes -...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Multiple Choice, Question 22
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Correct.     Which of the following is considered cash? Certificates of deposit (CDs) Postdated checks Money market checking accounts Money market savings certificates Multiple Choice, Question 30 Correct.     A cash equivalent is a short-term, highly liquid investment that is readily convertible into known amounts of cash and is acceptable as a means to pay current liabilities. has a current market value that is greater than its original cost. bears an interest rate that is at least equal to the prime rate of interest at the date of liquidation. is so near its maturity that it presents insignificant risk of changes in interest rates.
Background image of page 2
Multiple Choice, Question 44 Which of the following concepts relates to using the allowance method in accounting for accounts receivable? Bad debt expense is an estimate that is based on historical and prospective information. Bad debt expense is an estimate that is based only on an analysis of the receivables aging. Bad debt expense is based on the actual amounts determined to be uncollectible. Bad debt expense is management's determination of which accounts will be sent to the attorney for collection. Answer What is the normal journal entry when writing-off an account as uncollectible under the allowance method? Debit Accounts Receivable, credit Allowance for Doubtful Accounts.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. Debit Allowance for Doubtful Accounts, credit Accounts Receivable. Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. Multiple Choice, Question 50 Correct.     Which of the following methods of determining bad debt expense does not properly match expense and revenue? Charging bad debts with a percentage of sales under the allowance method. Charging bad debts with an amount derived from a percentage of accounts receivable under the allowance method. Charging bad debts as accounts are written off as uncollectible. Charging bad debts with an amount derived from aging accounts receivable under the allowance method. Answer
Background image of page 4
What is imputed interest? Interest based on the stated interest rate. Interest based on the implicit interest rate. Interest based on the coupon rate. Interest based on the average interest rate. Multiple Choice, Question 59 Correct.     Which of the following is true when accounts receivable are factored without recourse? The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/27/2011 for the course ACCT 303 taught by Professor N/a during the Spring '10 term at Strayer.

Page1 / 38

Chapter 7 Answers and Excersizes -...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online