Question 26 2 pts What is the cost flow assumption being used when the cost flow is in reverse order of the physical flow and ending inventory is made up of the oldest costs? First-in, first-out (FIFO) Method Weighted Average Method Specific Identification Method Last-in. First-out (LIFO) Method Question 27 2 pts What is the term used for the inventory system in which only records the sale when merchandise is sold and requires a physical inventory count at the end of the accounting cycle to determine the cost of goods sold and the amount of inventory on hand? O periodic inventory O sales inventory O perpetual inventory costing inventory Question 28 2 pts The objectives of internal control are to provide reasonable assurance that: Assets are safeguarded and used for business purposes. Business information is accurate. All of the answers. Employees and managers comply with laws and regulations. Question 29 2 pts Which of the five elements of internal control involves separating responsibilities for related operations? Control Environment Risk Assessment Control Procedures O Information & Communication Question 30 2 pts What is the name of the law that Congress passed in response to financial scandals that resulted in investors losing millions and even billions of dollars and it requires companies to maintain strong and effective internal controls over the recording of transactions and preparation of financial statements? Sarbanes-Oxley Act of 2002 Wage and Hour Law Cash Flow Law Financial Responsibility Law Question 31 2 pts Cash funds often used by companies for special needs, such as payroll or travel expenses are called O NSF funds special-purpose funds Opetty cash funds O rainy-day funds Question 32 2 pts Salespersons may make errors in making change for customers or in ringing up cash sales. As a result, the amount of cash on hand may differ from the amount of cash sales. Such differences are recorded in a account. special-purpose fund change fund Opetty cash cash short and over Question 33 2 pts A company may temporarily have excess cash. This excess cash is normally invested in highly "liquid investments in order to earn interest called O cash equivalents O long-term investments O cash O long-term assets Question 34 2 pts The set of procedures for authorizing and recording liabilities and cash payments called for those liabilities is called a special-purpose fund system O petty cash system payment system voucher system Question 35 2 pts Companies that have invested excess cash in cash equivalents usually report cash and cash equivalents as one amount on which financial statement and which section? balance sheet; fixed assets O income statement; operating revenue balance sheet; current assets income statement; other revenue Question 36 2 pts When you use your bank debit card, money is deducted from your bank account. The bank records the decrease through a memo in their records. O credit transaction O debit NSF Question 36 2 pts When you use your bank debit card, money is deducted from your bank account. The bank records the decrease through a memo in their records. O credit O transaction debit ONSF Question 37 2 pts If a customer writes a "bad check" to your company because the customer does not have enough money in their bank account, the bank will indicate this on your bank statement with the following notation O EFT (electronic failure to pay) O ET (electronic tally) NSF (non-sufficient funds) OCR (credit response) Question 38 2 pts Which method of accounting for uncollectible receivables records bad debt expense only when an account is determined to be worthless? EFT method O NSF method O direct write-off method O allowance method Question 39 2 pts In a period of rising prices, which inventory cost flow assumption will provide the best tax advantage (the lowest income taxes based on net income)? OLIFO Specific Identification method Weighted Average method FIFO Question 40 2 pts What accounting term refers to a written promise to pay a sum of money on demand or at a definite time? O accounts payable O voucher 0 notes receivable O promissory note Question 41 2 pts Which method of accounting for uncollectible receivables is required to be used by companies with a large amount of receivables by GAAP? allowance method O accounts receivable method O direct write-off method O guestimate method Question 42 2 pts What accounting term refers to the person making the promise to pay a note receivable who also signs the note? O maker payee drafter O receiver Question 43 2 pts Banks may require depositors to maintain minimum cash balances in their bank accounts. Such a balance is called a and is disclosed in notes to the financial statements. compensating balance cash short and over balance special-purpose fund balance line of credit Question 44 2 pts What is the term used for checks that have still NOT cleared or NOT been processed by the bank? outstanding checks O outstanding deposits reconciled checks checking account checks Question 45 2 pts What is the term that refers to accounts receivable minus allowance for doubtful accounts? book value accrued receivables accumulated depreciation net realizable value of the receivables D Question 46 2 pts Credit sales for the year total $3,500,000. Accounts Receivable has a balance of $800,000 at the end of the year. Bad debt expense is estimated at %% of sales. Calculate the amount of bad debt expense. $175.000 O $17.500 O $1,750 $1,750,000 Question 47 2 pts Accounts Receivable has a balance of $800,000 at the end of the year. If the allowance for doubtful accounts is estimated to be $1,750,000, what is the net realizable value of the accounts receivable on the Balance Sheet? $6,250,000 $7,825,000 O $9,750,000 O $7.998,250 Question 48 2 pts What accounting term refers to the face of the note plus interest due at maturity? O interest value maturity value due date value O principal value Question 49 2 pts The Analysis of Receivables method of accounting for uncollectible account is based on the assumption that the longer an account remains uncollected, the less chance there is of collecting the cash for the accounts receivable. O True False is an analysis of the items and amounts that cause the cash balance reported in the bank statement to differ from the balance of the cash account in the ledger. The adjusted balances should equal. voucher sysem O cash system Opetty cash reconciliation bank reconciliation