CH7R - 21. Which of the following is not considered cash...

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21. Which of the following is not considered cash for financial reporting purposes? d. Postdated checks and I.O.U.'s 22. Which of the following is considered cash? b. Money market checking accounts 23. Travel advances should be reported as d. none of these. P 24. Which of the following items should not be included in the Cash caption on the balance sheet? d. Postage stamps on hand S 25. A cash equivalent is a short-term, highly liquid investment that is readily convertible into known amounts of cash and d. is so near its maturity that it presents insignificant risk of changes in interest rates. 26.Bank overdrafts, if material, should be d. reported as a current liability. 27. Deposits held as compensating balances d. none of these. 28.The category "trade receivables" includes d. none of these. 29. Which of the following should be recorded in Accounts Receivable? d. None of these S 30. What is the preferable presentation of accounts receivable from officers, employees, or affiliated companies on a balance sheet? c. As assets but separately from other receivables. S 31. When a customer purchases merchandise inventory from a business organization, she may be given a discount which is designed to induce prompt payment. Such a discount is called a(n) d. cash discount. P 32. Trade discounts are d. all of the above. 33. If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as a. a deduction from sales in the income statement. 34. Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does not make the balance sheet misleading because
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c. the amount of the discount is not material. 35.Which of the following methods of determining bad debt expense does not properly match expense and revenue? d. Charging bad debts as accounts are written off as uncollectible. 36. Which of the following methods of determining annual bad debt expense best achieves the matching concept? a. Percentage of sales 37. Which of the following is a generally accepted method of determining the amount of the adjustment to bad debt expense? b. A percentage of sales not adjusted for the balance in the allowance 38. The advantage of relating a company's bad debt expense to its outstanding accounts receivable is that this approach a. gives a reasonably correct statement of receivables in the balance sheet. 39. At the beginning of 2006, Finney Company received a three-year zero-interest-bearing $1,000 trade note. The market rate for equivalent notes was 8% at that time. Finney reported this note as a $1,000 trade note receivable on its 2006 year-end statement of financial position and $1,000 as sales revenue for 2006. What effect did this accounting for the note have on Finney's net earnings for 2006, 2007, 2008, and its retained earnings at the end of 2008, respectively? d.
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This note was uploaded on 09/29/2011 for the course ACCOUNTING 3321 taught by Professor Sanchez during the Spring '11 term at Texas Pan American.

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CH7R - 21. Which of the following is not considered cash...

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