Exam 5: Accounting for and Presentation of Current Assets

The following are data available for Richards Co. for the month of May: Calculate cost of goods sold and ending inventory under the following cost flow assumptions: (1.) Weighted average (2.) FIFO (3.) LIFO

Which of the following is the correct balance sheet presentation for current assets?

One of the most important reasons for having a system of internal control is to:

When an uncollectible account receivable is written off against the allowance for bad debts:

The effect of an error resulting in an understatement of ending inventory is to:

a. Use the horizontal model or write the journal entry to record the payment of a one-year insurance premium of $18,000 on October 1, 2016.b. Use the horizontal model or write the adjusting entry that will be made at the end of every month to show the amount of insurance premium "used" that month.c. Calculate the amount of prepaid insurance that should be reported on the December 31, 2016 balance sheet with respect to this policy.

On January 1, 2017, the balance in Great Lakes Co.'s Allowance for Bad Debts account was $15,600. During the year, a total of $10,500 of delinquent accounts receivable were written off as bad debts. The balance in the Allowance for Bad Debts account at December 31, 2017, was $21,900.(a.) What was the total amount of bad debts expense recognized during the year? (b.) As a result of a comprehensive analysis, it is determined that the December 31, 2017, balance of Allowance for Bad Debts should be $18,900. Show, in general journal format the adjustment required.

The accounting concept or principle applied when the cost of short-term marketable securities is adjusted to market value is:

For which of the following reconciling items would an adjusting entry be necessary on the company's book?

An organization's system of internal control is designed primarily to:

Which of the following is true regarding notes receivables?

When a manufacturer invests in short-term marketable securities:

The allowance for uncollectible accounts is a(n):

The Allowance for Bad Debts account had a balance of $20,400 at the beginning of the year and $24,500 at the end of the year. During the year (including the year-end adjustment), bad debts expense of $33,600 was recognized.Required: Calculate the total amount of past-due accounts receivable that were written off as uncollectible during the year. (Hint: Make a T-account for the Allowance for Bad Debts account, plug in the amounts that you know, and solve for the missing amount.)

The valuation of short-term marketable securities on the balance sheet is likely to be for an amount that is approximately equal to the cost of these investments because:

The principal reason for reconciling the cash balance per books with the balance shown on the bank statement is to:

An accounts receivable results from the sale of:

The balance sheet presentation of accounts receivable net of the allowance for doubtful accounts has the effect of stating accounts receivable at:

Prepaid expenses classified as current assets represent:

The balance sheet valuation of inventories is: