1. You sold merchandise on account. One customer returned merchandise before paying for it. Assuming a periodic inventory system, what account should be debited when the merchandise is returned? Accounts Payable Merchandise Inventory Accounts Receivable d. Sales Returns it b. c. 2. Warren Company had $50,000 of Rent Expense this year and reported the following balance sheet accounts: January 1 December 31 Prepaid Rent $4,000 $7,000 Uneamed Rent $2,000 $1,000 In the DIRECT method for a cash flow statement, "Payments for Rent" would be: $53,000 b. $50,000 $49,000 d. $47.000 a. C. 3. Payments for which of the following items should be reported at the bottom of the cash flow statement prepared using the indirect method? Wages Interest Yes Yes b. Yes No No Yes d. No No a. o 4. a. In the entry to write off an overdue account on November 4, which of the following is true? Bad Debts Expense will be debited b. Accounts Receivable will be credited Allowance for Doubtful Accounts will be credited d. Bad Debts Expense will be credited c. 5. White Company sold merchandise on account for $4,000, terms 2/10, n/30. Assuming White is using the gross method, which accounts will be CREDITED when White collects the amounts on the 9th day after the sale? Accounts Receivable only b. Sales Discount and Interest Revenue Cash and Sales Discounts d. Accounts Receivable and Sales Discounts a. C. 6. Your company just spent 58 out of the petty cash to buy some stamps. What account should be credited? Miscellaneous Expense Petty Cash Cash d. No Entry should be made when spending petty cash a. b. c. 7. a When preparing the balance sheet, the account called "Cash" should NOT include: Petty cash b. Master card receipts The savings account d. Money in the cash registers c. 8. During 2018, Boyer Company had sales of $480,000, of which $100,000 were made for cash. On December 31, 2018, Boyer had a balance of $120.000 in accounts receivable and an $800 credit balance in the Allowance for Doubtful Accounts before making the adjusting entries. If Boyer estimates their bad debts as 3% of sales on account, how much Bad Debt Expense should they record in 2018? $11,400 b. $10,600 $3,600 d. $2,800 a C. 9. With annuities, payments can be made at the beginning of each period or at the end of each period. In the following situations, which type of payments would be to your benefit? If borrowing money If investing money Payments at the end of the period Payments at the end of the period b. Payments at the end of the period Payments at the beginning of the period Payments at the beginning of the period Payments at the end of the period d. Payments at the beginning of the period Payments at the beginning of the period a. C. 10. Green Company sold merchandise and received a 6 month non-interest bearing note on November 1. Similar notes charge 9% interest. Assuming the GROSS method, what adjusting entry should Green make on December 31 because of this note? Debit Discount on Notes Receivable, Credit Interest Income b. Debit Interest Receivable, Credit Interest Income C. Debit Discount on Notes Receivable, Credit Notes Receivable d. Debit Interest Income, Credit Discount on Notes Receivable a
