Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. What is the maturity value of a note? A. The principal amount minus interest due B. The principal amount plus interest due C. The

1. What is the maturity value of a note? A. The principal amount minus interest due B. The principal amount plus interest due C. The face amount of the note D. The principal amount times the interest rate

2.

A creditor is a person or business who:

A.

has a payable to another party.

B.

purchases goods on account

C.

invests money in the stock of a company.

D.

has a receivable from another party.

3.

A company has significant uncollectible receivables. Why is the direct write-off method unacceptable?

A.

Assets will be understated on the balance sheet.

B.

It violates the matching principle.

C.

Direct write-offs would be immaterial.

D.

It is not allowed for tax reasons.

4.

The following information is needed to reconcile the cash balance for Woods Paper Products. A deposit of $5,794.62 is in transit . Outstanding checks total $1,533.25. The book balance is $5,695.62 . The bookkeeper recorded a $1,524.00 check as $15,240 in payment of the current month's rent . The bank balance at February 28, 2008 was $16,500.25 . A deposit of $300 was credited by the bank for $3,000. A customer's check for $1,280 was returned for nonsufficient funds . The bank service charge is $70. Which of the following journal entries is needed to adjust for the NSF check?

A.

Accounts receivable 1,280 Cash 1,280

B.

Cash 1,280 Sales revenue 1,280

C.

NSF check 1,280 Cash 1,280

D.

Accounts payable 1,280 Cash 1,280

5.

Zorro Company has significant amounts of accounts receivable, and experiences uncollectible accounts from time to time. Zorro uses the direct write-off method. When Zorro Company writes off an uncollectible receivable, what is the effect of that single transaction?

A.

It will reduce net income.

B.

It will have no effect on net income.

C.

It will increase total assets of the company.

D.

It will generate positive cash flow.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Changing Academics Quality Audit And Its Perceived Impact

Authors: Ming Cheng

1st Edition

3639134273, 978-3639134278

More Books

Students also viewed these Accounting questions

Question

Describe the appropriate use of supplementary parts of a letter.

Answered: 1 week ago