Question 1 (1 point)

Cash equivalents are investments with a maturity of three months or less that are readily convertible to cash and whose value is unlikely to change.

Question 1 options:

	True
	False

Question 2 (1 point)

The journal entry to record a company's estimate of future bad debts (i.e., Dr. Bad Debt Expense and Cr. Allowance for Doubtful Accounts) has the following effect on the financial statements:

Question 2 options:

	Total Assets will decrease.
	Total Liabilities will decrease.
	Total Stockholders' Equity will increase.
	Total Assets will increase.

Question 3 (1 point)

How does a company know to record the journal entries for a bad debt recovery?

Question 3 options:

	The company records a recovery when they receive a cash payment from a customer related to an account that had been previously written off.
	The company records a recovery as an adjusting entry at the end of the accounting period.
	The company records a recovery because they have a policy that says recoveries are recorded after a certain number of days outstanding.
	The company records a recovery once they identify a specific account that is uncollectible.

Question 4 (1 point)

The journal entry to record a bad debt write-off is:

Question 4 options:

	Dr. Accounts Receivable and Cr. Allowance for Doubtful Accounts
	Dr. Bad Debt Expense and Cr. Allowance for Doubtful Accounts
	Dr. Allowance for Doubtful Accounts and Cr. Accounts Receivable
	Dr. Bad Debt Expense and Cr. Accounts Receivable

Question 5 (1 point)

A bad debt recovery occurs when a company collects an account receivable that was previously written off.

Question 5 options:

	True
	False

Question 6 (1 point)

On its 12/31/20 Balance Sheet, Miller Company reports 'Accounts Receivable, net' of $460,000. In the footnotes, Miller reports that its Allowance for Doubtful Accounts is $20,000 as of 12/31/20. What is the balance in Miller's 'Accounts Receivable' t-account as of 12/31/20?

Question 6 options:

	$420,000
	$480,000
	$460,000
	$440,000

Question 7 (1 point)

Before making its end-of-period adjusting journal entry to record the bad debt expense estimate, Frito Company has a credit balance in its Allowance for Doubtful Accounts of $5,000. An aging analysis suggests that the estimated amount of uncollectible accounts receivable at the end of the period is $30,000. Frito should make the following adjusting entry:

Question 7 options:

	Dr. Bad Debt Expense 25,000 and Cr. Allowance for Doubtful Accounts 25,0000
	Dr. Bad Debt Expense 35,000 and Cr. Allowance for Doubtful Accounts 35,000
	Dr. Bad Debt Expense 30,000 and Cr. Allowance for Doubtful Accounts 30,000

Question 8 (1 point)

If Best Buy reports 'Days Receivable' of 10.5 in 2020 and 9.5 in 2019, this implies that the company collected its accounts receivable faster in 2020 than in 2019.

Question 8 options:

	True
	False

Question 9 (1 point)

The journal entry made in the period of sale to account for future bad debts is:

Question 9 options:

	Dr. Accounts Receivable and Cr. Allowance for Doubtful Accounts
	Dr. Cash and Cr. Accounts Receivable
	Dr. Bad Debt Expense and Cr. Allowance for Doubtful Accounts
	Dr. Allowance for Doubtful Accounts and Cr. Accounts Receivable

Question 10 (1 point)

Including a sign on a convenience store's cash register that says "If you don't receive a receipt, your purchase is free" is an internal control for Cash.

Question 10 options:

	True
	False

Question 11 (1 point)

Approximately __% of accounting frauds involve improper revenue recognition.

Question 11 options:

	61%
	50%
	32%
	76%

Question 12 (1 point)

Before making its end-of-period adjusting journal entry to record the bad debt expense estimate, Frito Company has a debit balance in its Allowance for Doubtful Accounts of $5,000. An aging analysis suggests that the estimated amount of uncollectible accounts receivable at the end of the period is $30,000. Frito should make the following adjusting entry:

Question 12 options:

	Dr. Bad Debt Expense 25,000 and Cr. Allowance for Doubtful Accounts 25,000
	Dr. Bad Debt Expense 35,000 and Cr. Allowance for Doubtful Accounts 35,000
	Dr. Bad Debt Expense 30,000 and Cr. Allowance for Doubtful Accounts 30,000