QUESTION 1

Compensating balance agreements that legally restrict cash should

		only be described in the footnotes to the financial statements
		be separately reported in the current assets portion of the balance sheet if they are against short-term borrowings
		be separately classified as noncurrent assets on the balance sheet if they are against short-term borrowings
		not be shown on the balance sheet

QUESTION 2

In the case of a non-interest-bearing note,

		the amount borrowed is listed as the face value
		the amount to be collected is listed as the face value
		the present value is listed as the face value
		the present value is listed as the face value

QUESTION 3

Items classified as "cash" on the balance sheet

		are limited to coins, currency, or bank drafts
		must be available to pay current obligations
		may be subject to contractual restrictions
		do not include negotiable checks or bank drafts

QUESTION 4

On October 1, Robins's Online Sales sold goods for $50,000 and accepted a six-month noninterest-bearing note. Current interest rates were 10%. The December 31 adjusting entry should be

		Interest Receivable 2,500 Interest Revenue 2,500
		Discount on Notes Receivable 1,250 Interest Revenue 1,250
		Discount on Notes Receivable 2,500 Interest Receivable 2,500
		Interest Revenue 1,250 Discount on Notes Receivable 1,250

QUESTION 5

When pledging accounts receivable

		title to the receivables reverts to the lender
		the pledges are usually done with recourse
		the pledge arrangements become the new valuation methodology entered in the accounting records
		collection responsibility reverts to the lender