QUESTION 1

On a bank reconciliation, customers' checks that are returned for lack of funds would be

		deducted from the balance per company records
		deducted from the balance per bank statement
		added to the balance per bank statement
		added to the balance per company records

QUESTION 2

After the company completes the bank reconciliation, it makes journal entries for adjustments

		it made to the bank statement balance
		it made to its records
		it made to both the bank statement and its records
		made on the statement of cash flows

QUESTION 3

Which statement is not true?

		Notes receivable initially should be recorded at the present value of the future cash receipts on the date of issue.
		All notes implicitly carry interest.
		Discount on Notes Receivable is a contra account frequently found with interest-bearing notes.
		The account Notes Receivable Dishonored is an asset account.

QUESTION 4

Which item is not considered cash and cash equivalents on the balance sheet?

		unrestricted funds on deposit with the bank
		money market funds
		post dated checks
		bank drafts

QUESTION 5

The estimate of bad debt expense may be based on the historical relationships between actual bad debts incurred and

	Accounts
	Receivable	Sales
I.	Yes	No
II.	No	No
III.	No	Yes
IV.	Yes	Yes

		I
		II
		III
		IV