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Exam 4: Cash and Receivables

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Question 81

Multiple Choice

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Using the aging-of-accounts-receivable method to estimate uncollectible receivables,CMU Corporation estimates that $3,750 of its accounts receivable will be uncollectible.Prior to adjustment,the Allowance for Uncollectible Accounts has a credit balance of $600.Bad debt expense to be reported on the income statement is:

A) $4,350
B) $3,750
C) $3,150
D) $600

E) C) and D)
F) A) and B)

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Question 82

Multiple Choice

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Under the aging-of-accounts-receivable method:

A) the balance in accounts receivable prior to adjustment must be considered
B) the balance in Allowance for Uncollectible Accounts prior to adjustment is ignored
C) the balance in Allowance for Uncollectible Accounts prior to adjustment must be considered
D) the balance in Bad Debt Expense prior to adjustment must be considered

E) None of the above
F) B) and D)

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Question 83

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Once the bank reconciliation has been completed,journal entries must be made for the book side of the reconciliation.

Which of the following does not require a journal entry for a bank reconciliation?

Which of the following ratios is considered to be a more stringent measure of a company's ability to pay its current liabilities than the current ratio?

When preparing a bank reconciliation,which of the following items would be added to the book balance?

Outstanding cheques are deposits you have recorded but the bank has not.

After a customer's account has been written off under the allowance method,the customer sends the company the amount owed.Before the receipt of cash can be recorded,the company must first:

In a bank reconciliation,a deposit in transit is:

Financing expenses are typically classified as an operating expense.

Under the allowance method for estimating uncollectible accounts,the entry to write off an account:

Using the aging-of-accounts-receivable method,you estimate that total uncollectible accounts are $3,800.The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $1,100.The amount of the adjusting entry should be:

The cost of printing cheques should be deducted from the bank side of a bank reconciliation.

Under a lock-box system,customers' payments are initially received by the company's:

Which of the following are excluded from the numerator in the calculation of the acid-test ratio?