Intermediate Accounting

9339 Words Sep 30th, 2009 38 Pages
CHAPTER 7
CASH AND RECEIVABLES

TRUE-FALSE—Conceptual
Answer
T F F F F T F F T T T F F T F F T F T F

No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Description
Items considered cash. Items considered cash. Items considered cash. Cash equivalents definition. Bank overdrafts. Cash equivalents. Classification of receivables. Items considered trade receivables. Trade discount uses. Sales discounts. Valuation of receivables. Percentage-of-receivables approach. Percentage-of-sales method. Reporting notes receivable. Stated interest rate vs. effective rate. Classification of notes receivable. Recourse liability. Buying receivables with recourse. Selling receivables with recourse. Computing receivables
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Calculate correct cash balance. Calculate correct cash balance.

MULTIPLE CHOICE—CPA Adapted
Answer
a d d b c d c c b a a

No.
83. 84. 85. 86. 87. 88. 89. 90. 91. *92. *93.

Description
Determine current net receivables. Calculate adjustment for bad debts. Calculate bad debt expense. Calculate adjustment to write off bad debts. Effect of a write-off under the allowance method. Determine balance in the Allowance for Doubtful Accounts. Determine interest revenue of a zero-interest-bearing note. Determine interest receivable at year end. Assignment and factoring of accounts receivable. Calculate correct cash balance. Calculate the cash balance per books.

EXERCISES
Item
E7-94 E7-95 E7-96 E7-97

Description
Asset classification. Allowance for doubtful accounts. Entries for bad debt expense. Accounts receivable assigned.

PROBLEMS
Item
P7-98 P7-99 P7-100 *P7-101 *P7-102

Description
Entries for bad debt expense. Amortization of discount on note. Accounts receivable assigned. Factoring accounts receivable. Bank reconciliation.

7-4

Test Bank for Intermediate Accounting, Twelfth Edition

CHAPTER LEARNING OBJECTIVES
1. 2. 3. 4. 5. 6. 7. 8. 9. *10. Identify items considered as cash. Indicate how to report cash and related items. Define receivables and identify the different types of receivables. Explain accounting issues related to recognition of accounts receivable. Explain accounting issues related to valuation of accounts

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