63 Generally Accepted Accounting Principles states that the loss from a past due account receivable from goods sold on terms of 2 10, n 30 should a Be expensed immediately upon expiration of the 30 day credit period b Never be recognized, as there is always a possibility that the amount due will be collected c Be expensed in the year when the company receives factual evidence that the past due account will not be collected d Be expensed in the year of the sale that generated the uncollectible receivable, through an estimating procedure 62 How much interest would be charged on a $136,000 face value, 90 day (or 3 month), 5 annual interest bearing note a $ 6,800 b $ 1,700 c $ 3,400 d $ 6,120 60 On Nov 1, 2019 Mill Corp loaned $80,000 accepting a 6 month promissory note bearing 6 annual interest Mill Corp adjusts and closes its books annually on December 31 The journal entry to record the collection of the amount due on the loan on the due date, May 1, 2020 will include a a Credit to Notes Receivable for $82,400 b Debit to Cash for $80,000 c Credit to Interest Revenue for $2,400 d Credit to Interest Receivable for $800 59 Canyon Company loaned $50,000 to Beartrap Company, requiring Beartrap Company to sign a 30 day, 6 annual interest promissory note Canyon Company will record the transaction with a a Debit to Notes Receivable and a credit to Interest Revenue b Debit to Interest Receivable and a credit to Cash c Debit to Cash and a credit to Interest Receivable d Debit to Notes Receivable and a credit to Cash 58 The adjusting entry to record accrued, uncollected interest that would be made on the books of the lender would be a Debit Interest Receivable and credit Notes Receivable b Debit Interest Expense and credit Interest Revenue c Debit Interest Receivable and credit Interest Payable d Debit Interest Receivable and credit Interest Revenue 57 Generally accepted accounting principles state that interest on a simple promissory note with a loan term beginning in 2017 and ending in 2018 should be recognized as revenue by the lender a Totally in 2017, the year the loan originated b Totally in 2018, the year the loan and the interest are collected in full c Partly in 2017 and partly in 2018, since the loan term runs through both years 56 A merchant accepts a bank issued credit card such as VISA for a sale of $10,000 The credit card company charges the merchant a 4 fee Which of the following is true a The merchant will receive $6,000 as soon as the cardholder pays that much to the credit card company b The merchant will receive 96 of each monthly payment made by the credit card holder to the credit card company until $9,600 is received by the merchant c The merchant will receive $9,600 when it deposits the credit card receipt into its bank account d The merchant will receive $6,000 from the credit card company 30 days after depositing the credit card receipt 55 Company A lends $50,000 to Company B To record the transaction, Company A will a Debit Notes Payable b Credit Notes Payable c Debit Notes Receivable d Credit Notes Receivable 54 Which of the following reconciling items does not require an adjustment to the books of the company a Outstanding checks b NSF checks c Bank service charges d All the above require adjustments to the books of the company 53 Which of the following is not an example of a good internal control procedure a Separating the handling of cash from the maintenance of the accounting records b Depositing cash receipts once a month on the same day each month c Making all payments, other than petty cash disbursements, by check d Reconciling bank statements with accounting records in a timely manner 52 Upon discovery of a $1,000 debit card charge against your checking account for a computer that you neither purchased nor received, you should a Do nothing, assuming the bank will discover this obvious error and correct your account b Immediately advise the bank that you did not authorize the purchase and then close or put a hold on your account until the matter is resolved c Recognize the theft loss and reduce your checking account balance by the $1,000 d Record the cash purchase of a computer and depreciate it over 5 years even though you neither ordered nor received the computer 51 On December 31, before completing a bank reconciliation, Box Companys Cash account balance in its ledger was $4,000 However, according to its bank statement, the companys checking account balance was $5,000 When a bank reconciliation was completed, the reconciled balance per books and per bank statement totaled $$3,000 On the companys December 31 balance sheet, cash should be reported at a $3,000 b $4,000 c $5,000 50 Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check At the close of business on May 31, its Cash account shows a debit balance of $17,025 Clayborn's May bank statement shows $15,800 on deposit in the bank Comparison of the company books to the May bank statement indicates a $5,200 deposit in transit, outstanding checks totaling $4,600, a bank service charge of $25 not on the companys books, and a check from a custormer of Clayborn Co for $600 marked NSF by the bank After a reconciliation, the adjusted cash balance should be a $16,400 b $11,200 c $21,000 d $16,425 e $17,000

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63. Generally Accepted Accounting Principles states that the loss from a past-due account receivable from goods sold on terms of 2/10, n/30 should a. Be

63.

Generally Accepted Accounting Principles states that the loss from a past-due account receivable from goods sold on terms of 2/10, n/30 should

		a. Be expensed immediately upon expiration of the 30-day credit period.
		b. Never be recognized, as there is always a possibility that the amount due will be collected.
		c. Be expensed in the year when the company receives factual evidence that the past-due account will not be collected.
		d. Be expensed in the year of the sale that generated the uncollectible receivable, through an estimating procedure.

62.

How much interest would be charged on a $136,000 face value, 90 day (or 3 month), 5% annual interest-bearing note?

		a. $ 6,800
		b. $ 1,700
		c. $ 3,400
		d. $ 6,120

60.

On Nov 1, 2019 Mill Corp. loaned $80,000 accepting a 6-month promissory note bearing 6% annual interest. Mill Corp. adjusts and closes its books annually on December 31. The journal entry to record the collection of the amount due on the loan on the due date, May 1, 2020 will include a:

		a. Credit to Notes Receivable for $82,400.
		b. Debit to Cash for $80,000.
		c. Credit to Interest Revenue for $2,400.
		d. Credit to Interest Receivable for $800.

59.

Canyon Company loaned $50,000 to Beartrap Company, requiring Beartrap Company to sign a 30-day, 6% annual interest promissory note. Canyon Company will record the transaction with a:

		a. Debit to Notes Receivable and a credit to Interest Revenue
		b. Debit to Interest Receivable and a credit to Cash
		c. Debit to Cash and a credit to Interest Receivable
		d. Debit to Notes Receivable and a credit to Cash

58.

The adjusting entry to record accrued, uncollected interest that would be made on the books of the lender would be:

		a. Debit Interest Receivable and credit Notes Receivable
		b. Debit Interest Expense and credit Interest Revenue
		c. Debit Interest Receivable and credit Interest Payable
		d. Debit Interest Receivable and credit Interest Revenue

57.

Generally accepted accounting principles state that interest on a simple promissory note with a loan term beginning in 2017 and ending in 2018 should be recognized as revenue by the lender

		a. Totally in 2017, the year the loan originated.
		b. Totally in 2018, the year the loan and the interest are collected in full.
		c. Partly in 2017 and partly in 2018, since the loan term runs through both years.

56.

A merchant accepts a bank-issued credit card such as VISA for a sale of $10,000. The credit card company charges the merchant a 4% fee. Which of the following is true?

		a. The merchant will receive $6,000 as soon as the cardholder pays that much to the credit card company.
		b. The merchant will receive 96% of each monthly payment made by the credit card holder to the credit card company until $9,600 is received by the merchant.
		c. The merchant will receive $9,600 when it deposits the credit card receipt into its bank account.
		d. The merchant will receive $6,000 from the credit card company 30 days after depositing the credit card receipt.

55.

Company A lends $50,000 to Company B. To record the transaction, Company A will

	a.	Debit Notes Payable
	b.	Credit Notes Payable
	c.	Debit Notes Receivable
	d.	Credit Notes Receivable

54.

Which of the following reconciling items does not require an adjustment to the books of the company?

		a. Outstanding checks
		b. NSF checks
		c. Bank service charges
		d. All the above require adjustments to the books of the company.

53.

Which of the following is not an example of a good internal control procedure?

		a. Separating the handling of cash from the maintenance of the accounting records.
		b. Depositing cash receipts once a month on the same day each month.
		c. Making all payments, other than petty cash disbursements, by check.
		d. Reconciling bank statements with accounting records in a timely manner.

52.

Upon discovery of a $1,000 debit card charge against your checking account for a computer that you neither purchased nor received, you should

		a. Do nothing, assuming the bank will discover this obvious error and correct your account.
		b. Immediately advise the bank that you did not authorize the purchase and then close or put a hold on your account until the matter is resolved.
		c. Recognize the theft loss and reduce your checking account balance by the $1,000.
		d. Record the cash purchase of a computer and depreciate it over 5 years even though you neither ordered nor received the computer.

51.

On December 31, before completing a bank reconciliation, Box Companys Cash account balance in its ledger was $4,000. However, according to its bank statement, the companys checking account balance was $5,000. When a bank reconciliation was completed, the reconciled balance per books and per bank statement totaled $$3,000. On the companys December 31 balance sheet, cash should be reported at:

		a. $3,000
		b. $4,000
		c. $5,000

50.

Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $17,025. Clayborn's May bank statement shows $15,800 on deposit in the bank. Comparison of the company books to the May bank statement indicates a $5,200 deposit in transit, outstanding checks totaling $4,600, a bank service charge of $25 not on the companys books, and a check from a custormer of Clayborn Co. for $600 marked NSF by the bank. After a reconciliation, the adjusted cash balance should be: