McQ

4. An accountant has debited an asset account for $5,000 and credited a revenue account for $10,000. What can be done to complete the recording of the transaction? (a) Nothing further can be done. (b) Credit a shareholders' equity account for $5,000. (c) Debit another asset account for $5,000. (d) Credit another asset account for $5,000. 5. An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is Cost of Goods Sold Net Income. (a) understated understated (b) overstated overstated (c) understated overstated (d) overstated understated 6. An aging of a company's accounts receivable indicates that $4,200 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 debit balance, the adjustment to record bad debts for the period will require a (a) debit to Bad Debts Expense for $4,200. (b) debit to Allowance for Doubtful Accounts for $3.400. (c) debit to Bad Debts Expense for $5,000 (d) credit to Allowance for Doubtful Accounts for $5,000 7. Maximum benefit from review and reconciliation is obtained when (a) It is made on a pre-announced basis. (b) It is done by the employee possessing custody of the asset (c) discrepancies are reported to management, (d) it is done at the time of the external audit