1. Which of the following information is found in the summary of significant accounting policies?

a. composition of cash and cash equivalents b. composition of inventory c. methods of revenue recognition d. maturity dates of long-term debt

2. OnJanuary1,2017,Elmo Co.exchanged equipment for a $400,000 zero-interest-bearing note due on January 1,2020.The market rate of interest for a note of this type was 10%.The present value of $1at 10% for three periods is 0.75131.The future value of $1 for three periods is 1.33100 Elmo Co. uses the effective interest rate method. What amount of interest revenue should be included in Elmo's Dec. 31st, 2019 annual income statement?

$0 $36,364 $33,059 $30,053

3.Inc. made a $100,000 sale on account with terms of 2/15,n/30. lf the company uses the gross method, which of the following will be included in the journal entry to record the payment received 10 days after the sale was made?

a. CREDIT: Sales Discount $2,000 b. CREDIT:Accounts Receivable $98,000 c. CREDIT:Accounts Receivable $100000 d. DEBIT: Sales Discount Forfeited $2,000

4. At the end of 2018Inc.found that the 2017 vear-end balance of the allowance for doubtful had underestimated uncollectible accounts for 2018 by $4,200. CFO concluded that the increase in uncollectible accounts occurred as a result of an unexpected recession in 2018. What is the necessary journal entry to retrospectively correct the 2017 accounting numbers? lgnore taxes. a. Retained Earnings 4,200 Allowance for D/A 4.200 b. No entry necessary c.Bad debt expense 4,200 Retained earnings 4,200 d. Allowance for D/A 4,200 Retained Earnings 4,200

5.

Which of the following statement(s)is (are) TRUE regarding fnancial accounting?

a. Fair Value may be more useful for decision making than historical cost for certain types of assets and liabilities. b. All of these answers are TRUE c. A change in accounting estimate should be accounted for as an adjustment to beginning Retained Earnings. d. Accumulated Other Comprehensive Income is a component of Retained Earnings.

6.Inc. made a $100,000 sale on account with terms of 2/15, n/30. lf the company uses the net method, which of the following will be included in the journal entry to record the payment received 20 days after the sale was made?

ODEBIT: Sales Discount $2,000 CREDIT: Accounts Receivable $100,000 CREDIT: Sales Discount Forfeited $2,000 DEBIT: Accounts Receivable $98,000

7. Company provided services to their clients throughout the month of December, but failed to accrue the revenue associated with those services. Which of the following statements accurately describes the fnancial statement impact of not accruing revenue?

Assets are understated, revenue is understated and retained earnings is understated. Liabilities are overstated, revenue is understated and equity is understated. Assets are overstated, revenue is understated and equity is understated Liabilities are understated and revenue is understated

8.All of the following are problems associated with the valuation of accounts receivable except

cash discounts under the net method. uncollectible accounts. returns. allowances granted

9.What is interest?

Loan. Payment for the use of money. An equity investment. Return on capital.