1. Which of the following titles reports the amount of revenue generated by credit sales that are owed to an organization by its customers?

A. Accounts receivable

B. Prepaid expense

C. Bad debt expense

D. Common stock

2. Harris' customers paid $560 in advance of Harris performing any work. Harris' accountant debited cash and credited revenue when the cash was received. Which of the following statements is true?

A. Harris' net income is understated.

B. Harris' retained earnings are overstated.

C. Harris' cash is understated.

3. Which of the following is a reason that reasonable assurance by an auditor is adequate?

A. Informed decision makers understand that reasonable assurance is all that is provided.

B. A CPA from the auditing firm always sits at the client location.

C. Organizations provide all invoices to auditors to aid them uncover any problem.

4. Which of the following statements is true about financial statements?

A. Assets reported on the balance sheet may or may not have a source.

B. The total of assets is equal to the total of liabilities.

C. There is no T-account for ending retained earnings balance.

5. Wild Cart Inc. made sales of $730,000 during Year Two. Cash of $720,000 was collected and no accounts were written off as uncollectible. The beginning balance of accounts receivable was $20,000. Calculate the age of receivables of Wild Cart Inc. at the end of Year Two.

A. 15 days

B. 36.5 days

C. 12.5 days

6. Which are two accounts netted to derive at the net realizable value of accounts receivable?

A. Accounts receivable and allowance for doubtful accounts

B. Allowance for doubtful accounts and accounts payable

C. Bad debt expense and accounts payable