ACCT 301 Smartbook Chapter 7 Cash and Receivables solutions complete answers

ACCT 301 Smartbook Chapter 7 Cash and Receivables solutions complete answers 

 

Which of the following items are not included in cash?

 

A company's plans to adhere to policies and procedures, promote operational efficiency, minimize errors and theft, and enhance the reliability and accuracy of accounting data are referred to as

 

A critical aspect of a good internal control system is

 

Which of the following is an internal control procedure for cash disbursements?

 

Which of the following is usually reported on the balance sheet as a noncurrent asset?

 

Checks received from customers that have not been deposited yet are included where on a company's balance sheet?

 

When a company has a claim to receive assets in the future, how is this recorded on the balance sheet?

 

Internal control consists of plans to (Select all that apply.)

 

Which of the following is an example of separation of duties in a good system of internal control?

 

An account receivable is normally classified as a

 

Internal control procedures for cash disbursements (other than small disbursements from petty cash) should include that (Select all that apply.)

 

When initially recorded, the typical accounts receivable is valued at the

 

Cash that is restricted and is not available for current use may be reported in the balance sheet as (Select all that apply.)

 

A trade discount is a reduction from the list price, which is to (Select all that apply.)

 

Which of the following items are classified as receivables? (Select all that apply.)

 

When the amount of bad debts is material, GAAP requires the        method be used to reduce the carrying value of accounts receivable to the amount of cash expected to be received. (Enter only one word.)

 

Accounts receivable are almost always considered current assets because

 

A formal credit arrangement between a creditor and debtor is called a(n)

 

At what amount are accounts receivable initially recorded?

 

The formula for calculating interest multiplies which of the following? (Select all that apply.)

 

A(n)        discount is a way to change prices without publishing a new catalog. (Enter only one word.)

 

True or false: An interest-bearing note earns interest, whereas a noninterest-bearing note does not earn interest.

 

A contra-asset account is used to reduce the carrying value of accounts receivable to the amount of cash expected to be received under the _____ method of accounting for bad debts.

 

An application where the interest rate stays the same over time, but interest revenue increases as the rate is multiplied by a receivable balance that increases is referred to as what?

 

Match the accounting standard with the appropriate treatment of receivables.

 

Which of the following give rise to a note receivable? (Select all that apply.)

 

Under which approach to financing with receivables does the borrower act like it borrowed money from the lender, with the receivables remaining on the borrowers balance sheet and serving as collateral?

 

(Face amount x annual rate x fraction of the annual period) is the formula for

 

Assigning or pledging accounts receivable is used in a

 

True or false: Both interest bearing and noninterest bearing notes bear interest.

 

In a(n)        arrangement, the company sells its accounts receivable to a financial institution and the financial institution handles the billing and collections. (Enter only one word.)

 

True or false: With the effective interest method, interest revenue differs between periods.

 

The transfer of a(n) ____ to a financial institution is called discounting.

 

Both IFRS and U.S. GAAP permit the fair value option for accounting for receivables. Which of the following is correct regarding the application of this option?

 

Which of the following conditions must exist for a transfer of receivables to be treated as a sale? (Select all that apply.)

 

The        recognizes a note receivable in a secured borrowing agreement. (Enter only one word.)

 

Which of the following are potential benefits of offering cash discounts to customers? (Select all that apply.)

 

A secured borrowing occurs when accounts receivable are        or        as collateral for a loan. (Enter one word per blank.)

 

When adjusting the bank balance in a bank reconciliation, which item must be added to the bank balance?

 

A financial institution that buys receivables for cash and charges a fee for this service is referred to as a(n)

 

A petty cash account is used for

 

The transfer of a note receivable to a financial institution for an amount less than the face amount of the note is referred to as

 

When a creditor changes the terms of a debt agreement in response to the debtor's financial difficulties, this is referred to as what?

 

Which of the following indicate surrender of control over the assets transferred? (Select all that apply.)

 

Which of the following is a cost of offering a cash discount?

A reduction in the amount of cash collected from customers who take advantage of the discount.

 

Which of the following are adjustments to the book balance in a bank reconciliation? (Select all that apply.)

 

A petty cash fund is an efficient way to handle what type of payments?

 

For a note receivable, if the original terms of the debt are changed due to financial difficulties of the borrower, this is referred to as a               restructuring. (Enter one word per blank.)

 

A company is allowed to account for the transfer of receivables as a sale if what occurs?

 

Which of the following are costs of extending credit terms to customers? (Select all that apply.)

 

The        cash account is used to pay for low cost items so checks do not have to be processed. (Enter only one word.)

 

Which of the following would appropriately be paid with petty cash? (Select all that apply.)

 

 

Accounts receivable are classified as current assets because              

Accounts receivables are normally classified              

Any investment with a maturity date of __________are also categorized as cash equivalents.                

A cash discount representing a reduction in the amount to be paid by a credit customer if the customers pay within a specified period of time is also referred to as a(n) _______________ discount.             

Cash may be easily stolen if proper internal controls are not in place. Internal controls are a system of procedures designed to help safeguard assets. Internal controls are an organization’s plan to                 

Cobalt Corp. uses the allowance method to account for bad debts. If Cobalt writes off an account for $3,000, what is the effect on the balance sheet?                  

Coins, balances in checking accounts, checks received from customers and money orders received are all included in the _______ account on the balance sheet.                 

A company’s claims to the future collection of cash, other assets, or services is called a ________.                 

A company’s policy concerning which short-term, highly liquid investments it classifes as_______should be described in a disclosure note.              

COSO defines internal control as a process, undertaken by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:                

Credit and debit card receivables often are included in ___________.               

_______________ derive from the sale of goods and services to customers.                  

Discounts not taken in the net method are recorded to __________.               

Employees involved in record keeping should not also have              

An example of these discounts is written as 2/10 n30. This is read as “two ten net thirty”:                

The following is a list of items that should be included in the cash account:              

A framework for designing an internal control system is provided by the ____________ of the Treadway Commission.2 Formed in 1985,                   

GAAP and IFRS are similar in accounting for cash and cash equivalents. The only difference is with the accounting of __________.                

GAAP treats bank overdrafts as an _________.             

The gross method records the receivable and sales revenue gross__________. Any discount taken is recorded to ____________, a contra revenue account           

If a company sells the product on account at a higher rate than it would for cash and the discount reduces the price to the cash amount, then they must use the net method. For example, if a company sells items for $1,000 cash or $1,020 on account with a 2/10 n/30, they must use the __________.               

IFRS appropriate treatment of receivables                 

In a(n) ________ bearing note, interest is deducted from the face amount of the loan to determine the cash proceeds available to the borrower at the time of loan.            

______ include money market funds, treasury bills, and commercial paper. To be classifed as cash equivalents, these investments must have a maturity date no longer than three months from the date of purchase.                 

_______includes currency and coins, balances in checking accounts, and items acceptable for deposit in these accounts, such as checks and money orders received from customers. These forms of cash represent amounts readily available to pay off debt or to use in operations, without any legal or contractual restriction.              

Interest on notes is calculated as:                 

Internal control procedures for cash disbursements (other than small disbursements from petty cash) should include that              

Internal control refers to a company’s plan to:           

IRFS treats bank overdrafts as a ________.                  

An _________ _____________ occurs when a customer returns merchandise for a refund             

Pull Corp. sells $15,000 worth of product on account. They offer customers a 2/10 n30 discount, if $10,000 worth of the receivables is received within the 10 days, and the rest is received within 30 days. Gross Method:            

Receivables represent a company’s claims to the future collection of             

__________ Recommends but does not require separate disclosure of receivables. correct toggle button unavailable

Recommends but does not require separate disclosure of receivables.            

_________________ represent amounts owed to a company possibly from its employees, tax refunds, or insurance claims, not from the ordinary course of business.                 

_____________ requires a company to document and assess its internal controls. Auditors express an opinion on management’s assessment.               

Requires more dis-aggregation and disclosure of receivables.             

Restricted cash is usually reported in the balance sheet          

Separation of duties requires that                 

There are two ways to account for sales discounts:               

A trade discount is               

The transfer of a note to a financial institution is referred to as          

A troubled debt restructuring occurs when               

U.S. GAAP appropriate treatment of receivables          

Warner Corp. sells goods on account for $10,000 on April 2. On April 20, the customer returns $3,000 of the merchandise. The customer has not yet paid for any of the goods. What is the entry Warner will make on April 20 when the goods are returned?           

When a customer returns a product for a refund, in which account is the entry recorded?                

When adjusting the bank balance in a bank reconciliation, which item must be subtracted from the bank balance?                   

When adjusting the bank balance in a bank reconciliation, which items are subtracted from the book balance?           

When an accounts receivable is written off, which account is effected?           

When a specific account receivable is determined to be uncollectible, which of the following occur?             

When does the actual write-off of a receivable occur?            

When merchandise is returned for a refund or for credit to be applied to other purchases, the situation is called a(n) __________ __________              

Which method of estimating bad debts is required by GAAP when the amount of bad debt is material?                   

Which of the following are adjustments to the bank balance in a bank reconciliation?            

Which of the following is a discount that is a reduction in the amount to be paid if the customer pays within a specified time period?            

Who houses the financed receivables on their balance sheet in a secured borrowing?           

you record __________ whenever you determine that the debt is uncollectible.             

Your most challenging concepts                   

 

 

The expense associated with the estimate of the amount of accounts receivable that may not be collected during the year is referred to as             

A formal, signed credit agreement between a lender and a borrower is called a(n) _____ by the lender.           

IFRS recommends -               

The most critical element in determining if a company can account for the transfer of receivables as a sale is the surrender of _________.           

True or false: The gross method and the cash method are the two ways to record sales discounts.               

The two methods used for recording sales discounts are the ___________ method and the ___________ method.            

Under the allowance method, when is bad debt expense recognized?            

U.S. GAAP requires -              

What does a sales discount represent?          

When adjusting the book balance in a bank reconciliation, which items must be subtracted from the cash account book balance? (Select all that apply.)             

Which of the following are services performed by a factor? (Select all that apply.)                 

Which of the following items are included in cash? (Select all that apply.)