ABC Company has two bank accounts in the Green National Bank a corporate checking account and a corporate payroll account. The payroll account has a balance of $17,000 at the end of January, 2023, but the company has inadvertently overdrawn its checking account by $1,400 by month end. How should these accounts be carried on the balance sheet at the end of January? a. Both accounts should be classified as current assets, with the checking account shown as a negative amount (that is, a contra-asset account). b. Both accounts should be classified as current assets, with the checking account shown as an offset against the payroll account (that is, a single balance that is a combination of the two balances). c. The payroll account should be classified as a current asset and the checking account should be classified as a current liability. d. Both accounts should be classified as restricted cash and reported as such in Notes to the Financial Statements.

Several conditions must be met before an account receivable can be considered to be factored (that is, sold) either with or without recourse. Which of the following conditions must be met? a. The account receivable is put beyond the reach of the seller and its creditors. b. The seller does not have the right to repurchase the account receivable from the buyer or to redeem them prior to maturity. c. Both (a) and (b) are correct answers. d. Neither (a) nor (b) are correct answers.

The Korn Corporation has a T account called Allowance for Doubtful Accounts (allowance) that has an unadjusted debit balance of $600 at year end. Korns accounts receivable balance at year end is $240,000. If Korn expects to have 3% of its end-of-year accounts receivable not collectible (i.e., bad debt), what will Korns adjusting journal entry at year end be? a. Debit accounts receivable $600, credit allowance $600 b. Debit bad debts expense $7,800, credit allowance $7,800 c. Debit bad debts expense $7,200, credit allowance $7,200 d. Debit accounts receivable $7,800, credit allowance $7,800