1. The Stevens Company provided $45,000 of services on account during 2012, its first year in operation. During 2012, Stevens collected $34,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 2% of its revenues on account. The amount of net realizable value of receivables on the company's 2012 balance sheet was (Points : 2) $14,400. $10,100. $12,350. $1,350. Question 2.2. The bank statement for Link Company contained the following items: a bank service charge of $10; a credit memo for interest earned, $15; and a $50 NSF check from one of Link's customers. Outstanding checks amounted to $100; a deposit in transit was $300. At the end of the month, Grant Entertainment Company showed a $9,300 book balance in its cash account. The following information was gathered by studying the bank statement and the company's cash records: (1) deposits in transit amounted to $3,150 (2) outstanding checks were $6,200 (3) a $550 check had been incorrectly drawn on Grant's account by the bank (4) NSF checks returned by the bank were $750 (5) bank service charge was $29 (6) credit memo for $75 for the collection of one of the company's account receivable Based on the above information the true cash balance would be: (Points : 2) $6,250. $8,596. $6,096. $9,146. Question 3.3. Which of the following reflects the effect of the year-end adjusting entry to record estimated uncollectible accounts expenses? (Points : 2) A B C D Question 4.4. A company's year-end adjusting entry to recognize uncollectible accounts expense will (Points : 2) increase assets and increase equity. increase liabilities and decrease equity. decrease assets and decrease equity. decrease liabilities and increase equity. Question 5.5. The bank statement for Link Company contained the following items: a bank service charge of $10; a credit memo for interest earned, $15; and a $50 NSF check from one of Link's customers. Outstanding checks amounted to $100; a deposit in transit was $300. Assuming that the unadjusted bank balance was $600, determine the unadjusted book balance. (Points : 2) $800. $555. $845. $900. Question 6.6. On June 1, 2012, Siebens Enterprises loaned $20,000 to Tyler Company for one year at 8 percent interest. Under the terms of the promissory note, Tyler will repay the principal and pay one year's interest on May 31, 2013. What would be the total amount of receivables on Siebens' December 31, 2012 balance sheet? (Points : 2) $20,000 $21,600 $20,933 $20,800 Question 7.7. A review of the bank statement and accounting records of Baker Company revealed the following items: While performing its monthly bank reconciliation, the bookkeeper for the Partin Company discovered that a check written for $421 for advertising expense was recorded in the firm's books as $241. Which of the following shows the effect of the correcting entry on the financial statements? (Points : 2) Choice A Choice B Choice C Choice D Question 8.8. Dent Company's unadjusted bank balance at March 31, 2012 is $3,000. The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $300. Based on this information, Dent's true cash balance is: (Points : 2) $3,100. $2,700. $2,800. $2,900. Question 9.9. A review of the bank statement and accounting records of Baker Company revealed the following items: What documentation issued by a bank increases a company's checking account balance at the bank? (Points : 2) an account invoice a debit memo a credit memo a certified check Question 10.10. On June 1, 2012, Siebens Enterprises loaned $20,000 to Tyler Company for one year at 8 percent interest. Under the terms of the promissory note, Tyler will repay the principal and pay one year's interest on May 31, 2013. What total amount of cash will Siebens collect on May 31, 2013? (Points : 2) $20,000 $20,667 $21,600 None of the above Question 11.11. A bank deposit made on June 30 did not appear on the June bank statement. In doing the June bank reconciliation, this deposit in transit should be (Points : 2) subtracted from the unadjusted book balance. added to the unadjusted bank balance. subtracted from the unadjusted bank balance. added to the unadjusted book balance. Question 12.12. How is a business's certified check treated in doing the business's bank reconciliation? (Points : 2) It is added to the bank balance. It is subtracted from the book balance. It is subtracted from the bank balance. It is not included in doing the bank reconciliation. Question 13.13. On January 1, 2012 the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $30,000 and $500, respectively. During the year the company reported $75,000 of credit sales. There were $550 of receivables written-off as uncollectible in 2012. Cash collections of receivables amounted to $74,550. The company estimates that it will be unable to collect one percent (1%) of credit sales. The entry required to recognize the uncollectible accounts expense for 2012 will (Points : 2) increase total assets and retained earnings. decrease total assets and retained earnings. decrease total assets and increase net income. increase total assets and decrease net income. Question 14.14. On January 1, 2012 the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $30,000 and $500, respectively. During the year the company reported $75,000 of credit sales. There were $550 of receivables written-off as uncollectible in 2012. Cash collections of receivables amounted to $74,550. The company estimates that it will be unable to collect one percent (1%) of credit sales. The entry to recognize the write-off of an uncollectible account will (Points : 2) increase total assets and total equity. increase total assets and decrease total equity. decrease total assets and total equity. not affect total assets or total equity. Question 15.15. If prices are rising, which inventory cost flow method will produce the lowest amount for Cost of Goods Sold? (Points : 2) FIFO LIFO Weighted Average Either B or C Question 16.16. Hyperion Company has established internal control policies and procedures in order to achieve the following objectives: (1) Safeguard the company's assets (2) Assure that the accounting records contain reliable information (3) Evaluate management performance effectively (4) Assure that employees comply with company policies Which of these objectives are primarily achieved by accounting controls? (Points : 2) Objectives 1 and 2 Objectives 2 and 3 Objectives 3 and 4 Objectives 1 and 4 Question 17.17. On August 1, 2012, Miles Company accepted from another company a one-year note receivable with a face amount of $4,000 and an interest rate of 8%. What would be the amount of cash flow from operating activities (related to the note receivable) on the 2012 statement of cash flows? (Points : 2) $(4,000) $187 $133 zero Question 18.18. The net realizable value of accounts receivable is calculated, (Points : 2) Accounts Receivable + Uncollectible Accounts Expense Accounts Receivable + Notes Receivable Accounts Receivable - Allowance for Doubtful Accounts 365/Accounts Receivable Question 19.19. Which of the following is not a generally recognized internal control procedure? (Points : 2) Establishment of clear lines of authority. The minimization of labor cost. Requiring regular vacations for employees. Having employees covered by a fidelity bond. Question 20.20. An element that is often present when fraud occurs is (Points : 2) The availability of an opportunity. The existence of some form of pressure. The ability to rationalize. All of these.