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| 1 | |
Sales returns and allowances are reported on the income statement as: |
| | A) | a contra revenue. |
| | B) | a contra asset. |
| | C) | a selling expense. |
| | D) | a revenue. |
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| 2 | |
You received an invoice that shows credit terms of 2/10, n/60. What does the number 10 in the credit terms refer to? |
| | A) | the number of days in the credit period. |
| | B) | the amount of sales discount available. |
| | C) | the number of days in the discount period. |
| | D) | the amount of the trade discount. |
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| 3 | |
A customer, who is given credit terms of 2/10, n/60, purchased goods with a retail price of $600. The amount charged to the customer's account receivable was: |
| | A) | $612.00. |
| | B) | $600.00. |
| | C) | $588.00. |
| | D) | $601.20. |
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| 4 | |
On July 1, Jakes' Jerky sold 5 pounds of jerky for $50 with the terms 3/10, n/30. On July 8, Jakes' received payment for the jerky. What journal entry did Jake make on July 8? |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025559/1014252/ch06_q4a.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (6.0K)</a>]]>
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| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025559/1014252/ch06_q4b.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (8.0K)</a>]]>
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| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025559/1014252/ch06_q4c.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (12.0K)</a>]]>
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| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025559/1014252/ch06_q4d.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (13.0K)</a>]]>
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| 5 | |
The unadjusted credit balance of the Allowance for Doubtful Accounts account is $650. Uncollectible accounts are estimated to be $15,600, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the adjusted balance of the Allowance for Doubtful Accounts? |
| | A) | $650 |
| | B) | $16,250 |
| | C) | $14,950 |
| | D) | $15,600 |
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| 6 | |
The unadjusted debit balance of the Allowance for Doubtful Accounts account is $350. Uncollectible accounts are estimated to be $15,800, based on the percent of sales method. After recording the appropriate journal entry for the bad debts expense, what will be the balance of the Bad Debt Expense account? |
| | A) | $15,800 |
| | B) | $15,450 |
| | C) | $16,150 |
| | D) | $350 |
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| 7 | |
The unadjusted credit balance of the Allowance for Doubtful Accounts account is $350. Uncollectible accounts are estimated to be $15,800, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the balance of the Bad Debt Expense account? |
| | A) | $15,800 |
| | B) | $15,450 |
| | C) | $16,150 |
| | D) | $350 |
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| 8 | |
When using the indirect method of preparing the "cash flows from operating activities" section of a statement of cash flows, a net increase between the beginning and ending balances of net accounts receivable will |
| | A) | be added to net income. |
| | B) | be deducted from net income. |
| | C) | not be considered. |
| | D) | be shown as deferred revenues. |
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| 9 | |
The proper treatment of outstanding checks on the bank reconciliation requires: |
| | A) | adding them back to the book balance of cash. |
| | B) | adding them back to the bank balance of cash. |
| | C) | deducting them from the book balance of cash. |
| | D) | deducting them from the bank balance of cash. |
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| 10 | |
The proper treatment on the bank reconciliation of NSF checks returned with the statement is to |
| | A) | add them to the book balance of cash. |
| | B) | add them to the bank balance of cash. |
| | C) | deduct them from the book balance of cash. |
| | D) | deduct them from the bank balance of cash. |
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