Find AAB ct 22 Replace Heading 2 Heading 3 Heading 4 Heading 5 Heading 6 Heading 7 Create and Share Reques Select- Adobe PDF Signatur Styles Editing Adobe Acrobat 27 Deposits in transit a. have been recorded on the company's books but not yet by the bank. b. have been recorded by the bank but not yet by the company. c. have not been recorded by the bank or the company. d. are checks from customers which have not yet been received by the company. 28. If a check correctly written and paid by the bank for $724 is incorrectly recorded on the company's books for $742, the appropriate treatment on the bank reconciliation would be to a. add $18 to the bank balance. b. add $18 to the book balance. c. deduct $724 from the bank balance. d. deduct $724 from the book balance. 29. Claims for which formal instruments of credit are issued as proof of the debt are a. accounts receivable. b. interest receivable. c.notes receivable. d. other receivables. 30. 31 Interest is usually associated with a. accounts receivable. b. notes receivable. c. doubtful accounts. d. bad debts. A customer charges a treadmill at Sports Equipment Shop. The price is $5,000 and the financing charge is 6% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 days and a finance charge is added to the customer's account. What is the amount of the finance charge? a. $9 b. $25 C. $90 d. $300 31. An aging of a company's accounts receivable indicates that $13,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a a. debit to Bad Debt Expense for $13,000. b. debit to Allowance for Doubtful Accounts for $11,800. c. debit to Bad Debt Expense for $11,800. d. credit to Allowance for Doubtful Accounts for $13,000 Bad Debt Expense is considered a. an avoidable cost of doing business on a credit basis. b. an internal control weakness c. a necessary risk of doing business on a credit basis. d. avoidable unless there is a recession 32 ENG