reported? a. Current assets b. Non-current assets c. Current liabilities d. Stoc
ID: 2559654 • Letter: R
Question
reported? a. Current assets b. Non-current assets c. Current liabilities d. Stockholders' equity 15. A cash equivalent is a short-term, highly liquid investment that is readily convertible into known amounts of cash and a. is acceptable as a means to pay current liabilities b. has a current market value that is greater than its original cost c. bears an interest rate that is at least equal to the prime rate of interest at the date of liquidation d. is so near its maturity that it presents insignificant risk of changes in interest rates Bank overdrafts, if material, should be a. reported as a deduction from the current asset section. b. reported as a deduction from cash c. netted against cash and a net cash amount reported. d.) reported as a current liability 16. Which of the following statements is correct regarding receivables? a. Receivables are written promises of the purchaser to pay for goods or services b. Receivables are claims held against customers and others for money, goods, or 17. services c. Receivables are non-financial assets. d. Receivables that are expected to be collected within a year are classified as noncurrent 18. If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as a. a deduction from sales in the income statement. b. an item of "other expense" in the income statement. c. a deduction from accounts receivable in determining the net realizable value of accounts receivable. d. sales discounts forfeited in the cost of goods sold section of the income statement. Why is the allowance method preferred over the direct write-off method of accounting for bad debts? a. Allowance method is used for tax purposes. b. Estimates are used c. Determining worthless accounts under direct write-off method is difficult to do. 19. d) Improved matching of bad debt expense with revenue. 20. What is the normal journal entry when writing-off an account as uncollectible under the allowance method? a. Debit Allowance for Doubtful Accounts, credit Accounts Receivable b. Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. c, Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. d. Debit Accounts Receivable, credit Allowance for Doubtful Accounts. 21. A Cash Over and Short account a. is not generally accepted. b. is debited when the petty cash fund proves out over. c is debited when the petty cash fund proves out short. d. is a contra account to Cash/Explanation / Answer
15) option d) is so near maturity that is presents insignificant risk of changes in interest rates 16) option d reported as current liability 17) option b) Receivables are claims held against customers and others for money,goods or services 18) option a) a deduction from sales in the income statement19) 19) option d) improved matching of bad debts expense with revenue (since it recognises expense in the same year as of sale) 20) option a debit allowance for Doubtful accounts ,credit account receivable 21) option c is debited when the petty cash fund proves out short
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.