11. Important elements of an internal control system for cash disbursements include each of the following except:
a. All disbursements, other than very small disbursements, should be made by check
b. The same person that prepares the check should also prepare the proper journal
c. All expenditures should be authorized before a check is prepared
d. Only authorized personnel should sign checks
12. Purpose of cash internal control:
a. Minimizes errors and theft
b. Enhances the reliability and accuracy of accounting data
c. Encourages adherence to company policies and procedures
d. All are correct
13. In a bank reconciliation, adjustments to the book balance could include adding or subtracting company errors.
a. True
b. False
14. Gershwin Wallcovering Co. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record this reduction by crediting accounts receivable and debiting:
a. Sales returns
b. Sales allowances
c. Sales discounts
d. Sales
15. Which of the following does not change the balance in accounts receivable account?
a. Bad debts expense adjusting entry
b. Write-offs
c. Collections from customers
d. Returns on credit sales
16. Calistoga Produce reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650 respectively, at December 31, 2012. During 2013, Calistoga's credit sales and collections were $315,000 and $319,000, respectively, and $1,720 in accounts receivable were written off. The company estimates the required allowance for uncollectible accounts to be $1,575. Calistoga's accounts receivable at December 31, 2013, are:
a. $465,280
b. $469,280
c. $473,280
d. $467,000
17. The balance in accounts receivable at the beginning of 2013 was $300. During 2013, $1,600 of credit sales were recorded. If the ending balance in accounts receivable was $250 and $100 in accounts receivable were written off during the year, the amount of cash collected from un customers during 2013 was:
a. $1,550
b. $1,900
c. $1,650
d. $1,600
18. Difference between gross method or net method of cash discount while selling
a. Revenues
b. Expenses
c. Cash received
d. Sales discounts
19. Accounts receivable are normally report at the
a. Current value plus accrued interest
b. Current value les expected collection costs
c. Net amount to be received
d. Present value of future cash receipts
20. The allowance for uncollectible accounts is a:
a. Contra asset account
b. Quasi- liability account
c. Deferred charge to expense
d. Deferred revenue account
a. All disbursements, other than very small disbursements, should be made by check
b. The same person that prepares the check should also prepare the proper journal
c. All expenditures should be authorized before a check is prepared
d. Only authorized personnel should sign checks
12. Purpose of cash internal control:
a. Minimizes errors and theft
b. Enhances the reliability and accuracy of accounting data
c. Encourages adherence to company policies and procedures
d. All are correct
13. In a bank reconciliation, adjustments to the book balance could include adding or subtracting company errors.
a. True
b. False
14. Gershwin Wallcovering Co. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record this reduction by crediting accounts receivable and debiting:
a. Sales returns
b. Sales allowances
c. Sales discounts
d. Sales
15. Which of the following does not change the balance in accounts receivable account?
a. Bad debts expense adjusting entry
b. Write-offs
c. Collections from customers
d. Returns on credit sales
16. Calistoga Produce reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650 respectively, at December 31, 2012. During 2013, Calistoga's credit sales and collections were $315,000 and $319,000, respectively, and $1,720 in accounts receivable were written off. The company estimates the required allowance for uncollectible accounts to be $1,575. Calistoga's accounts receivable at December 31, 2013, are:
a. $465,280
b. $469,280
c. $473,280
d. $467,000
17. The balance in accounts receivable at the beginning of 2013 was $300. During 2013, $1,600 of credit sales were recorded. If the ending balance in accounts receivable was $250 and $100 in accounts receivable were written off during the year, the amount of cash collected from un customers during 2013 was:
a. $1,550
b. $1,900
c. $1,650
d. $1,600
18. Difference between gross method or net method of cash discount while selling
a. Revenues
b. Expenses
c. Cash received
d. Sales discounts
19. Accounts receivable are normally report at the
a. Current value plus accrued interest
b. Current value les expected collection costs
c. Net amount to be received
d. Present value of future cash receipts
20. The allowance for uncollectible accounts is a:
a. Contra asset account
b. Quasi- liability account
c. Deferred charge to expense
d. Deferred revenue account
