MCQs

1. Right Corp. receives a $5,000, 4-month, 6% note from Wrong Corp. In settlement of a past-due account receivable. What entry will Right Corp. make upon settlement of the note if it is dishonored but payment is expected? (a) Notes Receivable 5,100 Accounts Recelvable. 5,100 (b) Notes Receivable 5,100 Accounts Receivable. 5,000 Interest Income 100 (c) Notes Receivable 5.000 Interest Receivable 100 Accounts Receivable. 5,000 Interest Income 100 (d) Notes Receivable 5,000 Accounts Receivable 5,000 2. The retained earnings on the trial balance prepared Immediately after posting adjusting entries represents the (a) retained earnings at the end of the period. (b) retained earnings at the beginning of the period. (c) net income for the period. (d) total shareholders' equity at the trial balance date. 3. Which of the following statements is false? (a) A basic principle of cash management is to increase the speed of paying liabilities (b) A company should plan the timing of major expenditures in light of its operating cycle (c) A cash budget will help determine if additional financing will be necessary. (d) A key principle of cash management is to increase the speed of collection on receivables 1. DOLL