Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 7, Problem 7.27E
Concepts; terminology
• LO7–1 through LO7–8
Listed below are several terms and phrases associated with cash and receivables. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it.
| List A | List B |
| ________ 1. Internal controla | a. Restriction on cash |
| ________ 2. Trade discount | b. Cash discount not taken is sales revenue |
| ________ 3. Cash equivalents | c. Includes separation of duties |
| ________ 4. Allowance for uncollectibles | d. Bad debt expense a % of credit sales |
| ________ 5. Cash discount | e. Recognizes |
| ________ 6. Balance sheet approach | f. Sale of receivables to a financial institution |
| ________ 7. Income statement approach | g. Include highly liquid investments |
| ________ 8. Net method | h. Estimate of bad debts |
| ________ 9. Compensating balance | i. Reduction in amount paid by credit customer |
| ________ 10. Discounting | j. Reduction below list price |
| ________ 11. Gross method | k. Cash discount not taken is sales discount forfeited |
| ________ 12. Direct write-off method | l. Bad debt expense determined by estimating amount of |
| ________ 13. Factoring | m. Sale of note receivable to a financial institution |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
TP6. LO 9.6 When a customer is delinquent on paying a notes receivable, your company has the option to continue to attempt collection or sell the debt to a collection agency. Research the benefits and challenges with each of these options and in a short essay, answer the following questions.
What are the benefits and challenges of continuing to attempt collection yourself?
What are the benefits and challenges of selling debt to a collection agency?
If you had a dishonored notes receivable, which option would you select and why?
Would you weight certain benefits or challenges differently when making your selection? How?
PA8.
LO 8.6Which of the following transactions will require a journal entry? Indicate if it will be a debit or a credit and to what account the entry will be recorded.
Transaction
No Journal Entry Needed
Journal Entry Needed
Debit
Credit
Outstanding check
Interest income
NFS check
Wire transfer by customer
Deposit in transit
Bank charges
MC 34
Upon examination of the petty cash fund of Maverick Company on January 3, 2021, the following items were found:
(see attached image)
The petty cash fund was established for an amount of P10,000. What is the correct amount of petty cash fund at December 31, 2020?
a. P9,905
b. P8,475
c. P6,975
d. P1,825
Chapter 7 Solutions
Intermediate Accounting, 10 Ed
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Briefly explain the difference between the income...Ch. 7 - Prob. 7.14QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.17QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Prob. 7.20QCh. 7 - Prob. 7.21QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Prob. 7.10BECh. 7 - Prob. 7.11BECh. 7 - Prob. 7.12BECh. 7 - Prob. 7.13BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.16BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.19BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.21BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.24BECh. 7 - Prob. 7.25BECh. 7 - Prob. 7.26BECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.23ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Prob. 7.29ECh. 7 - Prob. 7.36ECh. 7 - Prob. 7.1PCh. 7 - Prob. 7.2PCh. 7 - Prob. 7.3PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.1DMPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.5DMPCh. 7 - Prob. 7.6DMPCh. 7 - Prob. 7.9DMP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- PA7. LO 8.6Identify where each of the following transactions would be found on the bank reconciliation. Transaction Increase to Bank Side Decrease to Bank Side Increase to Book Side Decrease to Book Side Outstanding check Interest income NFS check Wire transfer by customer Deposit in transit Bank chargesarrow_forwardQUESTION 34 Which of the following cash transfers is most likely to result in a misstatement of cash at December 31, 20X7? Bank Transfer Schedule Disbursement Receipt Recordedin books Paid by bank Recordedin books Received by bank A) 12/31/X7 1/4/X8 12/31/X7 12/31/X7 B) 1/4/X8 1/5/X8 12/31/X7 1/4/X8 C) 12/31/X7 1/5/X8 12/31/X7 1/4/X8 D) 1/4/X8 1/11/X8 1/4/X8 1/4/X8 Transfer A. Transfer B. Transfer C. Transfer D.arrow_forward*P7.13 (Bank Reconciliation and Adjusting Entries) The cash account of Aguilar Co. showed a ledger balance of $3,969.85 on June 30, 2020. The bank statement as of that date showed a balance of $4,150. Upon comparing the statement with the cash records, the following facts were determined. 1. There were bank service charges for June of $25. 2. A bank memo stated that Bao Dai’s note for $1,200 and interest of $36 had been collected on June 29, and the bank had made a charge of $5.50 on the collection. (No entry had been made on Aguilar’s books when Bao Dai’s note was sent to the bank for collection.) 3. Receipts for June 30 for $3,390 were not deposited until July 2. 4. Checks outstanding on June 30 totaled $2,136.05. 5. The bank had charged the Aguilar Co.’s account for a customer’s uncollectible check amounting to $253.20 on June 29. 6. A customer’s check for $90 (as payment on the customer’s Accounts Receivable) had been entered as $60 in the cash receipts…arrow_forward
- 7. How much is the cash shortage or overage as of December 31, 2021? Indicate whether shortage or overage. A. no shortage B. shortage of P500 C. overage of P500 D. shoratge of P4,500 8. How much petty cash fund shall be shown as part of the Cash balance as of December 31, 2021? * A. 35,000.00 B. 45,000.00 C. 53,500.00 D. 38,500.00arrow_forwardMC49 The following bank reconciliation is presented for the Pony Co. for the month of November, 2020: Balance per bank statement, 11/30/2020 P180,400 Add: Deposit in transit P41,500 Erroneous bank charge 15,500 56,500 Subtotal P236,900 Less: Outstanding Checks 78,200 Balance per books, 11/30/2020 P158,700 Data for the month of December 2020 follow: Per bank: December deposits/credits — P261,000 December charges/debits — P224,200 Balance, December 31, 2020 — P217,200 All items that were outstanding as of November 30 cleared through the bank in December, including the bank charge. In addition, P25,000 checks were outstanding as of December 31, 2020. What is the amount of cash disbursements per books in December 2020? (WITH SOLUTION) a. P146,000 b. P171,000 c. P249,200 d. P249.200arrow_forwardPA9. LO 8.6 Domingo Company received the following bank statement. Using Problem PA3, prepare the bank reconciliation.arrow_forward
- H6. 31 P XYZ Co. decided to create a petty cash fund. They estimated that $100 would be needed in the fund. Choc entry to create the account from the following. O Petty Cash is debited for $100. O Cash is debited for $100. O Petty Cash is credited for $100. O Miscellaneous Expense is debited for $100.arrow_forwardMC51 The following bank reconciliation is presented for the Pony Co. for the month of November, 2020: Balance per bank statement, 11/30/2020 P180,400 Add: Deposit in transit P41,500 Erroneous bank charge 15,500 56,500 Subtotal P236,900 Less: Outstanding Checks 78,200 Balance per books, 11/30/2020 P158,700 Data for the month of December 2020 follow: Per bank: December deposits/credits — P261,000 December charges/debits — P224,200 Balance, December 31, 2020 — P217,200 All items that were outstanding as of November 30 cleared through the bank in December, including the bank charge. In addition, P25,000 checks were outstanding as of December 31, 2020. What is the amount of cash balance per books in December 2020? (WITH SOLUTION) a. P257,200 b. P242,200 c. P207,200 d. P192,200arrow_forward20 - What is the most risky payment method for the importer company?A) Advance payment B) On-off payment C) Payment against documents D) AllE) Payment with acceptance creditarrow_forward
- 52. A cash shortage of government is most likely recorded as a Debit to receivable account Debit to cash shortage or overage account Credit to miscellaneous income account Credit to cash shortage or overage accountarrow_forward_______________ 5. The interest on a non-interest bearing note is equal to its discount amount._______________ 6. The practice of realizing cash from accounts receivable before its maturity date is widespread. Defalcation is one of them. True or False?arrow_forwardSerial Problem Business Solutions LO P3 Santana Rey receives the March bank statement for Business Solutions on April 11, 2020. The March 31 bank statement shows an ending cash balance of $67,266. The general ledger Cash account, No. 101, shows an ending cash balance per books of $67,781 as of March 31 (prior to any reconciliation). A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following. The bank erroneously cleared a $510 check against the company account in March that S.Rey did not issue. The check was actually issued by Business Systems. On March 25, the bank statement lists a $49 charge for the safety deposit box. Santana has not yet recorded this expense. On March 26, the bank statement lists a $113 charge for printed checks that Business Solutions ordered from the bank. Santana has not yet recorded this expense. On March 31, the bank statement lists $34 interest earned on Business Solutions’s checking account for the month of…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounting Information SystemsFinanceISBN:9781337552127Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan HillPublisher:Cengage Learning
Accounting Information Systems
Finance
ISBN:9781337552127
Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill
Publisher:Cengage Learning
What is Fund Accounting?; Author: Aplos;https://www.youtube.com/watch?v=W5D5Dr0j9j4;License: Standard Youtube License