Accounting Study Guide Test 4 PDF

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Detailed step by step notes and formulas for accounting principles exam 4...

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A bank reconciliation should be prepared periodically because Any differences between the company’s records and the banks records should be determined and any errors made by either party should be discovered and corrected The maturity value of a $40,000; 9%; 40-day note receivable dated July 3 is $40,400 Which of the following items that appeared on the bank reconciliation did not require an adjusting entry? Deposits in transit Which of the following would be subtracted from the balance per bank on a bank reconciliation? Outstanding checks Interest on a note can be calculated without knowledge of the Notes maturity date If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer’s account as uncollectible? Accounts Receivable If the direct write off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer’s account as uncollectible? Bad Debts Expense The objectives of internal control are to Provide reasonable assurance that operations are managed to achieve goals, financial reports are accurate, and laws and regulations are complied with Under the direct write off method of accounting for uncollectible accounts, Bad Debts Expense is When an account is determined to be worthless The amount of the promissory note plus the interest earned on the due date is called the Maturity value What is the type of account and normal balance of Allowance for Doubtful Accounts? Contra Asset, Credit The amount of deposits in transit is included on the bank reconciliation as an Addition to the balance per bank statement

Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation the item is A deduction from the balance per company’s records Journal entries based on the bank reconciliation are required in the company’s accounts for Book errors Receipts from cash sales of $7,500 were recorded incorrectly in the cash receipts journal as $5,700. This item would be included on the bank reconciliation as an Addition to the balance per company’s records The two methods of accounting for uncollectible receivables are the allowance method and the Direct write off method...