Which of the following statements is incorrect regarding the classification of accounts and notes
a. Segregation of the different types of receivables is required if they are material.
b. Disclose any loss contingencies that exist on the recei
iGAAP requires an impairment loss for a loan receivable be recognized when
a. its carrying amount is less than its recoverable amount.
b. its recoverable amount is less than its carrying amount.
c. its present value of expected future cash flows is grea
1. iGAAP and U.S. GAAP are very similar in accounting for cash and receivables.
2. iGAAP does not permit the reversal of impairment losses, as does U.S. GAAP.
3. Under iGAAP, there is a specific standard that mandates segregatio
Pr. 7-139Amortization of discount on note.
On December 31, 2010, Green Company finished consultation services and accepted in
exchange a promissory note with a face value of $400,000, a due date of December 31, 2013,
and a stated rate of 5%, with interest
Due from Factor (2% $800,000).
Loss on Sale of Receivables (6% $800,000).
(b) Accounts Receivable.
Due to Dexter.
Due from Factor .
Loss on Sal
*132. In preparing its August 31, 2010 bank reconciliation, Bing Corp. has available the
Balance per bank statement, 8/31/10
Deposit in transit, 8/31/10
Return of customer's check for insufficient funds, 8/30/10
In preparing its bank reconciliation for the month of April 2010, Henke, Inc. has available
the following information.
Balance per bank statement, 4/30/10
NSF check returned with 4/30/10 bank statement
Deposits in transit, 4/30/10
Ex. 7-134Asset classification.
Below is a list of items. Classify each into one of the following balance sheet categories:
c. Short-term Investments
Compensating balances held in long-term borrowing arrangeme
MULTIPLE CHOICECPA Adapted
On the December 31, 2010 balance sheet of Vanoy Co., the current receivables
consisted of the following:
Trade accounts receivable
Allowance for uncollectible accounts
Claim against shipper for goods lost in transit (Novemb
Smithson Corporation had a 1/1/10 balance in the Allowance for Doubtful Accounts of $10,000.
During 2010, it wrote off $7,200 of accounts and collected $2,100 on accounts
previously written off. The balance in Accounts Receivable was $200,000 at 1/1 and
Consider the following: Cash in Bank checking account of $13,500, Cash on hand of
$500, Post-dated checks received totaling $3,500, and Certificates of deposit totaling
$124,000. How much should be reported as cash in the
Which of the following should be recorded in Accounts Receivable?
a. Receivables from officers
b. Receivables from subsidiaries
c. Dividends receivable
d. None of these
What is the preferable presentation of accounts receivable from officers, employees,
1. Savings accounts are usually classified as cash on the balance sheet.
2. Certificates of deposit are usually classified as cash on the balance sheet.
3. Companies include postdated checks and petty cash funds as cash.
4. Cash equiv
1. Are all international companies subject to the same internal control standards? Explain.
1. No, all international companies are not subject to the same internal control standards. All
public companies that list their securi
Pr. 3-138Accrual basis.
Grier & Associates maintains its records on the cash basis. You have been engaged to convert
its cash basis income statement to the accrual basis. The cash basis income statement, along
with additional information, follows:
Pr. 3-139Eight-column work sheet.
The trial balance of Winsor Corporation is reproduced on the following page. The information
below is relevant to the preparation of adjusting entries needed to both properly match revenues
and expenses for the period and
Pr. 3-136Cash to accrual accounting.
The following information is available for Renn Corporation's first year of operations:
Payment for merchandise purchases
Ending merchandise inventory
Accounts payable (balance at end of year)
Ex. 3-128Cash basis vs. accrual basis of accounting.
Contrast the cash basis of accounting with the accrual basis of accounting.
The essential difference between the cash basis and the accrual basis of accounting relates to
the timing of t
*Ex. 3-131Accrual basis.
The records for Kiley Company showed the following for 2010:
Cash collected during the year for revenue, $70,000
Show the computation of the amount of revenue
Ex. 3-126Adjusting entries.
Reed Co. wishes to enter receipts and payments in such a manner that adjustments at the end
of the period will not require reversing entries at the beginning of the next period. Record the
following transactions in the desired
Ex. 3-124Accrued items and deferred (unearned or prepaid) items.
Generally accepted accounting principles require the use of accruals and deferrals in the
determination of income. How is income determined under the accrual basis of accounting?
$40,000 - $21,000 = $19,000.
$50,000 - $32,000 = $18,000.
$13,500 x 4/12 = $4,500.
$18,000 x 7/12 = $10,500.
2/12 x 9% x $20,000 = $300.
$12,500 $700 = $11,800.
The following information is available for Ace Company for 2010:
Disbursements for purchases
Increase in trade accounts payable
Decrease in merchandise inventory
Costs of goods sold for 2010 was
A ledger is where the company initially records transactions and selected other events.
Nominal (temporary) accounts are revenue, expense, and dividend accounts and are
Real (permanent) accounts are revenue, expense, and dividen
The interest revenue on the income statement for 2010 was
*104. The salary expense on the income statement for 2010 was
*105. The Office Supplies accou
When an item of revenue or expense has been earned or incurred but not yet collected or paid,
it is normally called a(n) _ revenue or expense.
d. none of these
When an item of revenue is collected and recorded in ad
Which of the following statements is associated with the accrual basis of accounting?
a. The timing of cash receipts and disbursements is emphasized.
b. A minimum amount of record keeping is required.
c. This method is used less frequently by businesses t