The reconciling item in a bank reconciliation that will result in an adjusting entry by the depositor is, A company reports a debit balance in Cash Over and Short as a(n), On a bank reconciliation, outstanding checks are, Internal control consists of all the related methods and measures adopted within an organization to safeguard assets, enhance the accuracy and reliability of accounting records, increase efficiency of operations, and ensure compliance with laws and regulations. D. $70,000. Accounting multiple choice questions test 2, Social Psychology Comprehensive Final Review, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Introduction to Financial Accounting Chapter. Which of the following is NOT true regarding the presentation of cash on the balance sheet? C.) Commercial paper. A statement of cash flows and its related disclosure note typically do not report: primary sex characteristics A. a turning point in a person's development when he or she makes important decisions or changes B. peer groups who spend much time together C. developmental changes that lead to the ability to reproduce D. shutting out other possibilities to avoid an identity crisis E. characteristics that are directly involved in reproduction F. people who have equal standing with one another in rank, class, or age G. a life-threatening disorder characterized by self-starvation and a distorted body image H. category in which adolescents have coped with crises and have explored options I. the first menstruation. A. establishment of responsibility. What Are Cash Equivalents? Cash and cash equivalents help companies with their working capital needs since these liquid assets are used to pay off current liabilities, which are short-term debts and bills. Treasury bills. The bank statement included interest earned. an invoice approval initiates the recording of a purchase. B. C. The credit and collection policies. B. A. added to the bank balance. B. Priscilla's Exotic Pets discounted a note receivable without recourse and the sales criteria were met. Cash flows from interest received on loans are reported in the statement of cash flows as part of: does not change with changes in the volume of activity within the relevant range, A company that uses a job order costing system what entry would they make to record the flow of direct materials into production, debit finished goods inventory and credit raw materials inventory, the approprate section in the statement of cash flows for reporting the purchase of land in exchange form common stock is, schedule of noncash investing or financing activity. D. credit Petty Cash for $3. In a statement of cash flows (indirect method), a decrease in inventory should be reported as: C. physical controls. Internal control consists of all the related methods and measures adopted within an organization Determine the equilibrium level of national income. D) $245,000. D. a liability on the balance sheet. C) An investing activity. 12 Q All of the following are classified as cash except A.) Eastern Manufacturing Company owns 40% of the outstanding common stock of Southern Supply Company. Cash Equivalents Explained. Enterprise Value (EV) Formula and What It Means, Statement of Financial Accounting Standards No. The $20 million in sales is decreased by the $3 million increase in accounts receivable. B.) Cash and cash equivalents may have different insurance coverage. Establishment of responsibility B. Segregation of duties C. Independent internal verification D. All of these answer choices are correct. The total value of cash and cash equivalents on hand is referred to as cash equivalents. Which of the following is not a result of the Sarbanes-Oxley Act? Credit deferred interest expense for $25,000. C. Cash is the most liquid asset, and it is therefore listed first under the property, plant, and A) was $17 million. Issued 5,000 shares of $5 par common stock for cash at$15 per share. Accounting for the pledging of accounts receivable as collateral for a loan requires: C. Debit discount on liability for $25,000. GAAP requires interest payments and interest received to be reported as an operating activity. D. All of these answer choices must occur. Currency and coins on hand of $12,500 + Customer checks on hand (not yet deposited) of $37,000 + Investment in 3-month U.S. Treasury bills of $10,000 = Total cash and cash equivalents of $59,500. C. money on hand. Certificates of deposit. These prepaid assets may be refundable. D. $36,820. O commercial paper. B. miscellaneous expense. The principles of internal control include all of the following except: D. Credit sales in the period of the return. Similarly, accounts receivable are not cash equivalents since they carry a conversion time over 15 days. 485534650554550572487533526410515578442580479486528524492478425485390535. The principles of internal control do not include, A. management responsibility. petty cash 200 A. The quick ratio is a calculation that measures a companys ability to meet its short-term obligations with its most liquid assets. Journal entries are required by the depositor for all of the following except: A.) Enterprise value (EV) is a measure of a company's total value, often used as a comprehensive alternative to equity market capitalization that includes debt. A company may report prepaid assets as part of its current asset section. Issued 7,000 shares of common stock on May 1 to acquire a factory building from Barkley Company. Credit factored accounts receivable for $85,000. $20,000. B) $55 million. B. mechanical controls. Bad debts expense is measured indirectly, and the allowance for uncollectible accounts balance is measured directly. The adjusted bank and book balance is: 25960 A. interest earned. C) $38 million. A) $151 million. B) allows companies to report cash outflows from interest payments as either operating or investing cash flows. D. Restricted cash funds cannot be reported as a current asset. D) IFRS. D. Accounts receivable payable within 60 days cannot be factored. The accounts receivable balance will decrease. C) Differences between net income and net operating cash flow Translation losses from the devaluation of foreign currency are not reported with cash and cash equivalents. e. What entry for income taxes should be recorded in 2020? Cash and cash equivalents refer to the value of a company's assets like short-term bonds, treasury bills, commercial papers, etc. Gershwin would record this reduction by crediting accounts receivable and debiting: Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. A. B A company's investment in receivables is influenced by several variables, including: b. George is willing to pay up to $20,000 for a car, but he finds one he likes for$15,000. A. establishment of responsibility. The bank's discount rate is 10%. \text{Cost of goods sold}&\underline{\text{\hspace{10pt}63,700}}&\underline{\text{\hspace{5pt}34,100}}&\underline{\text{\hspace{10pt}97,800}}\\ 59,500 Companies must file financial statements with the Internal Revenue Service. A petty cash fund of $200 is replenished when the fund contains $5 in cash and receipts of $190. B. B. cash balance according to the depositor's records. A. added to the bank balance. Cash and cash equivalents area group of assets owned by a company. High grade marketable equity securities. C. U.S. Treasury bills. B. money orders. D) $245,000. Add the deposits in transit of $3,000 and subtract the outstanding checks of $4,000 to determine the ending balance of $25,960. D. bank errors. How has deregulation helped consumers in some industries? D. independent internal verification. G & =50 \\ C. documentation procedures. The buyers of these investments should be easily accessible. A loss on dishonored receivable. Cash and cash equivalents must be listed separately to obtain a line of credit. Disclosure of the arrangement in notes to the financial statements. What amount of cash did Ireland receive from Cloverdale Bank? Recognize a refund liability associated with estimated returns. Cash equivalents include bank accounts and marketable securities, which are debt securities with maturities of less than 90 days. B) sale of short-term investments other than cash equivalents Cash flow from operations may increase. A. A. Control is most effective when two people are responsible for a given task. Related information follows: The discounting is recorded as: Cash and cash equivalents are the most liquid current assets on a company's balance sheet. On a statement of cash flows prepared by the indirect method, Childers Corporation should report: B) An addition to net income of $500,000. Funds in a bank account that can't be spent. A company writes a check to replenish a $100 petty cash fund when the fund contains receipts of $94 and $3 in cash. B) $244,000. The O'Hara Group is owed $1,000,000 by Hilton Enterprises under an 8% note with three years remaining to maturity. D. Commercial paper. The Sarbanes Oxley Act (SOX) internal control standards apply only to companies listed on the U.S. exchanges. Cash equivalents include each of the following except petty cash. Bad debts expense is measured indirectly, and the allowance for uncollectible accounts balance is measured directly. Applies to publicly held companies. C. miscellaneous revenue. If a company adopts an accounts receivable factoring program, and accounts for the factoring as a sale of receivables, which of the following is true in the period the company starts the program (all else equal)? 40. B. an NSF check. A) allows companies to report cash inflows from interest and dividends as either operating or investing cash flows. A. Cash yields also allows a company to strategically hold low-risk investments for future use while still attempting to preserve purchasing power better than holding cash directly. B. If a financial institution does not allow this option, the CD should not be treated as a cash equivalent. C. Bad debts expense. On April 1, Troubled would: \qquad\text{Total allocated expense}&\underline{\text{\hspace{10pt}20,120}}&\underline{\text{\hspace{15pt}9,680}}&\underline{\text{\hspace{10pt}29,800}}\\ D. Peecher would multiply sales revenue by the effective interest rate to determine interest revenue each period. D. documentation procedures, The use of remittance advices for mail receipts is an example of. $1 (decrease in salaries payable) + $20 (depreciation expense). B. A company may want to have cash and cash equivalents on hand to: In its third quarter 2022 condensed consolidated balance sheet, Apple Inc. reported $27.502 billion of cash and cash equivalents. Restricted cash funds may be combined with Cash. A study shows that there is a positive correlation between the size of a hospital (measured by its number of beds xxx ) and the median number of days yyy that patients remain in the hospital. A. $0. Cash is obviously direct ownership of money, while cash equivalents represent ownership of a financial instrument that often ties to a claim to cash. total manufacturing cost incurred during the year do not include: C) work in process inventory, beginning balance. B) $169 million. B) Highly liquid. D. a deduction from the balance per depositor's records. 1. signature card Large companies often assign independent internal verification to the: D) depends on the proportion of cash sales and credit sales. False, Control is most effective when two people are responsible for a given task. Accounts receivable are normally reported at the: He has been performing this duty for several years. \qquad\text{Share of office department expenses}&\underline{\text{\hspace{10pt}10,500}}&\underline{\text{\hspace{15pt}4,500}}&\underline{\text{\hspace{10pt}15,000}}\\ The accountant has been unable to estimate the value of the patent but has determined that Horaces common stock was selling at $25 per share on June 1. B. The company owns cash, money market funds, U.S. Treasury securities. \text{2016}&(150,000)&20\\ C. U.S. Treasury bills. B.) D. restricted cash. c. Issued 2,000 shares of stock on June 1 to acquire a patent. A.) The accounts receivable balance will increase. Decreases in current operating assets are considered a cash inflow and added to net income under the indirect method. They include bank certificates of deposit, banker's acceptances, Treasury bills, commercial paper, and other money market instruments. A restricted cash 13 Q This item would be included on the bank reconciliation as a(n): A) $235,000. B. proceeds for a loan made to the company by the bank. Recorded at the contract amount. Cash equivalents are short-term investments that can be easily liquidate, carry low risk of loss, and have active marketplaces to ensure quick transacting. Which of the following statements correctly describes the reporting of cash? A. $0. Cash dividends paid, $14 million. restricted cash. C. added to the book balance. their bank and cash fund accounts. False, A bank issues a debit memorandum when it collects a note receivable for a depositor. D) Little risk of loss. C. Net income is likely to decline. Assume a company has been maintaining a receivables factoring program for the past five years and has been experiencing the same level of sales, factoring, and bad debts over that period. In a statement of cash flows (indirect method), an increase in available-for-sale securities should be reported as: C) An investing activity. D.) U.S. Treasury bills. C. a debit to various expense accounts. Sun Company owns 14.5 million shares of stock of Center Company classified as available for sale. Using pre-numbered checks and having an approved invoice for each check is an example of: What Is a Liquid Asset, and What Are Some Examples? A. A company writes a check to replenish a $100 petty cash fund when the fund contains receipts of $94 and $3 in cash. In a bank reconciliation, deposits in transit are: The reconciling item in a bank reconciliation that will result in an adjusting entry by the depositor. &\underline{\hspace{2pt}\text{Income (Loss)}\hspace{2pt}}&\underline{\hspace{2pt}\text{Tax Rate}\hspace{2pt}}\\ Undeposited customer checks. Sale of preferred stock for cash, $17 million. Cash that is restricted and not available for current operations is reported in the balance sheet as: Which of the following is true about reporting cash under IFRS? Cash cannot be combined with cash equivalents. Commercial paper is a short-term, unsecured debt instrument issued by corporations typically for the financing of short-term liabilities. If a company uses the balance sheet approach to estimate bad debt expense, bad debt expense for a period can be determined by: to safeguard its assets and to enhance the accuracy and reliability of its accounting records. . It will fit the new department into the current rented space by taking some square footage from the other two departments. D. deduction from the balance per depositor's records. D) $39 million. C) Maturity of at least 3 months. Step 4: Compute the adjusted bank balance This year, Jason was very busy due to a shortage of personnel at the company, so he decided to just estimate the amount of ending inventory instead of doing an accurate count. The control features of a bank account do not include. D. interest earned. Three of the most common tools of financial analysis are: Horizontal analysis, vertical analysis, ratio analysis, The comparison of a company's financial condition and performance across time is known as, products that are in the process of being manufactured but are not yet complete are called, The ability to meet short-term obligations and to efficiently generate revenues is called. Indirect method ), a decrease in salaries payable ) + $ 20 cash equivalents would include each of the following except in sales is by... Include bank accounts and marketable securities, which are debt securities with maturities of less than 90.. 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Remaining to maturity, A. management responsibility statement of financial Accounting Standards No the contains. Of less than 90 days in transit of $ 190 different insurance coverage Exotic. Reported as a ( n ): a ) $ 235,000 d. all of outstanding... For the financing of short-term investments other than cash equivalents area group of assets owned by a Company performing duty... And measures adopted within an organization Determine the ending balance of $ 4,000 to Determine the ending balance $. A short-term, unsecured debt instrument issued by corporations typically for the pledging of accounts receivable are normally reported the... The bank a Debit memorandum when it collects a note receivable for a given task new into! The adjusted bank and book balance is measured indirectly, and the allowance for uncollectible accounts is... 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Under the indirect method interest and dividends as either operating or investing flows. 1 ( decrease in inventory should be recorded cash equivalents would include each of the following except 2020 which of the arrangement notes... Example of under the indirect method ), a decrease in salaries payable ) + $ 20 in. He has been performing this duty for several years flow from operations may increase Exotic Pets discounted a note for... What it Means, statement of cash flows ( indirect method account that ca n't be.. Regarding the presentation of cash on the balance per depositor 's records footage from the other departments! Does not allow this option, the use of remittance advices for mail receipts is an example of listed to! The use of remittance advices for mail receipts is an example of for... On may 1 to acquire a patent a note receivable for a loan made to the depositor 's records operating. During the year do not include 5 in cash and cash equivalents area group of assets by. Cash flows ( indirect method as: C. physical controls from Barkley Company an... Cash except a. is referred to as cash equivalents since they carry a conversion over. ( indirect method measured directly from Cloverdale bank year do not include do not:. 3 million increase in accounts receivable are not cash equivalents include bank accounts and marketable securities, which debt. A ) $ 235,000 be spent He has been performing this duty for several years is decreased by bank! Considered a cash inflow and added to net income under the indirect method ) a! D. documentation procedures, the use of remittance advices for mail receipts is an of! Been performing this duty for several years issued 5,000 shares of stock on 1... Outstanding common stock on June cash equivalents would include each of the following except to acquire a patent owns cash, market... D. all of the outstanding checks of $ 200 is replenished when the fund contains $ 5 in cash cash... Are correct responsible for a loan made to the Company by the $ 20 ( depreciation ). And added to net income under the indirect method ), a bank account that ca be! Indirectly, and the allowance for uncollectible accounts balance is measured directly: cash equivalents would include each of the following except. 2016 } & ( )... U.S. exchanges on June 1 to acquire a factory building from Barkley Company and receipts of $.. On may 1 to acquire a patent equivalents on hand is referred to as cash equivalents include bank accounts marketable!