Exam 7: Reporting and Interpreting Cost of Goods Sold and Inventory

School Supplies Company made the following journal entries (1) to write off an account judged to be uncollectible and (2) to record bad debt expense for 20A: As a result of the first entry only, the book value (net realizable value) of trade receivable was (a); as a result of the second entry only, the book value (net realizable value) of trade receivable was (b):

An effective control activity results when at least two individuals are assigned to one cash drawer so that each can serve as check on the other.

The allowance method of accounting for bad debts violates the matching principle.

The records of Topper. Ltd. show the following: 1. In February, deposits per the bank statement totalled $18,850; deposits per books $19,500; and deposits in transit at February 28 were $1,400. 2. In February, cheques issued per books were $17,750; cheques clearing the bank were $18,400; and outstanding cheques at February 28 were $1,250. There were no bank debit or credit memoranda and no errors were made by either the bank or Topper Ltd. Required: (a) Calculate the dollar amount of the deposits in transit at January 31. (b)Calculate the dollar amount of the outstanding cheques at January 31.

Finn Company has just received its June 30 bank statement from City Bank. The bank statement and the cash account, summarized below, are to be reconciled for the month of June. Balance, June 1 $6,800 Required: a. Prepare a bank reconciliation using the following format: b. Give the journal entries that should be made in the accounts of Finn Company as a result of the above bank reconciliation.

An inexperienced accountant made the following entries. In each case, the explanation to the entry is correct. Required: Prepare the correcting entries.

If C Co.'s trade receivables balance was $1,666 million in 2012 and $1,798 million in 2013, what would be the impact on the statement of cash flows?

The reason that we must adjust revenue for the change in trade receivables to convert the figure to cash collected from customers is that trade receivables represent sales revenue not collected from customers at the beginning and end of the accounting year.

For most merchandisers and manufacturers, the required revenue recognition point is the time of shipment or delivery of goods.

Under the aging method of estimating the allowance for doubtful accounts, the balance in the allowance account must be considered prior to adjusting for estimated uncollectible accounts.

Tabor Company had trade receivables of $450,000 and an allowance for doubtful accounts of $15,500 just prior to writing off as worthless a trade receivable from Fox Company of $5,000. What was the net realizable value of trade receivables as shown by the accounting record before and after the write-off?

Many merchants accept credit cards for the sale of goods because it can increase the number of customers.

Outstanding cheques from the prior period which clear the bank in the current period

It is important to record sales returns and allowances in a separate account so that management can determine the volume of returns and allowances in order to measure the quality of their products.

What is the annual interest rate of a sales discount of 2/10, n/30?

Dobson Corporation gathered the following reconciling information in preparing its September bank reconciliation: The adjusted cash balance per bank at September 30 is

Liberty estimates that its annual bad debts approximate 4% of credit sales. What would the net realizable value of the receivables on Liberty's year-end balance sheet be?

Under the completed contract method, revenue is recognized

Allowance for Doubtful Accounts is credited when an account is determined to be uncollectible.

The following information was available to the accountant of Midland Company when preparing the monthly bank reconciliation: What is the corrected cash balance per books following completion of the reconciliation?