Answered step by step
Verified Expert Solution
Question
1 Approved Answer
TRUE OF FALSE A signature card shows the signature of only the person who authorizes others in the company to sign checks. The payor is
TRUE OF FALSE
- A signature card shows the signature of only the person who authorizes others in the company to sign checks.
- The payor is the party to whom payment is made.
- Bank customers are considered creditors of the bank so the bank can shows their accounts with credit balances on the banks records.
- Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over checks.
- In preparing bank reconciliation, the amount of deposits in transit is deducted from the balance per bank statement.
- In preparing bank reconciliation, the amount of outstanding checks is added to the balance per bank statement.
- In preparing bank reconciliation, the amount indicated by a debit memorandum for bank service charges is added to the balance per depositors records.
- In preparing bank reconciliation, the amount of a check omitted from the journal is added to the balance per depositors records.
- A check for $456 was erroneously charged by the bank as $654. In order for the bank reconciliation to balance, you add $198 to the bank statement balance
PROBLEM II
Answer T or F
- Notes receivables can also be called trade receivables.
- Receivable from company owners and officers should be disclosed separately on the balance sheet.
- Receivables not currently collectible are reported in the investments section of the balance sheet.
- Since those responsible for receivables record keeping and credit approval do not handle cash, these duties do nor need to be separated to maintain food internal control.
- Maintaining the Accounts Receivable control account and the Accounts Receivable Subsidiary Ledger should be assigned to the same employee for good internal control.
- When companies sell their receivables to other companies, the transaction is called factoring.
- Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables.
- The difference between Accounts receivable and its contra asset account is called net realizable value.
- The estimate based on sales method violates the matching principle.
- When the estimate based on analysis of receivables is used, income is reduced when a specific receivable is written off.
- When an account receivable that has been written off is subsequently collected, the account receivable is reinstated.
- Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before adjusting entries are recorded at the end of the accounting period.
- At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a credit balance of $250, and net sales on account for the period total $500,000. If uncollectible accounts expense is estimated at 1% of net sales on account, the current provision to be made for uncollectible accounts expense is $4,750.
At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a credit balance of $500, and net sales on account for the period total
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started