SURVEY OF ACCOUNTING TEST BANK
UPDATED SOLVED QUESTIONS AND
CORRECT ANSWERS FULL REVIEW GUIDE
●● Frosty Drive In recorded credit card sales of $14,000 for the month.
The credit card fee associated with the transactions totaled 2%.
What amount of cash did Frosty receive for these credit card sales?
Answer: 13,720
●● With regard to Accounts Receivable, a separate account for each
customer is kept in a(n)
Answer: subsidiary ledger.
●● The current credit balance in Allowance for Uncollectible Accounts
before adjustment is $450. A percent-of-sales reveals $2,800 of
uncollectible accounts.
What is the ending balance in the Allowance for Uncollectible
Accounts?
Answer: 3,250
, ●● What is the effect on the financial statements of writing off an
uncollectible account under the direct write-off method?
Answer: Decreases net income and decreases assets
●● Estimating uncollectible accounts by analyzing receivables from
specific customers according to how long each has been outstanding is
known as the
Answer: aging-of-receivables method
●● Basic Design had net credit sales of $400,000 during the year and an
average accounts receivable balance of $40,000.
On average, how many days did it take Basic Design to collect Accounts
Receivable (round to two decimal places)?
Answer: 400,000/40,000=10
365/10=36.50
36.50 Days
●● The quick ratio is calculated as
Answer: Cash & Cash Equivalents + Short-term Investments + Net
Current Receivables) / Current Liabilities
●● Cash & Cash Equivalents
$32,000
UPDATED SOLVED QUESTIONS AND
CORRECT ANSWERS FULL REVIEW GUIDE
●● Frosty Drive In recorded credit card sales of $14,000 for the month.
The credit card fee associated with the transactions totaled 2%.
What amount of cash did Frosty receive for these credit card sales?
Answer: 13,720
●● With regard to Accounts Receivable, a separate account for each
customer is kept in a(n)
Answer: subsidiary ledger.
●● The current credit balance in Allowance for Uncollectible Accounts
before adjustment is $450. A percent-of-sales reveals $2,800 of
uncollectible accounts.
What is the ending balance in the Allowance for Uncollectible
Accounts?
Answer: 3,250
, ●● What is the effect on the financial statements of writing off an
uncollectible account under the direct write-off method?
Answer: Decreases net income and decreases assets
●● Estimating uncollectible accounts by analyzing receivables from
specific customers according to how long each has been outstanding is
known as the
Answer: aging-of-receivables method
●● Basic Design had net credit sales of $400,000 during the year and an
average accounts receivable balance of $40,000.
On average, how many days did it take Basic Design to collect Accounts
Receivable (round to two decimal places)?
Answer: 400,000/40,000=10
365/10=36.50
36.50 Days
●● The quick ratio is calculated as
Answer: Cash & Cash Equivalents + Short-term Investments + Net
Current Receivables) / Current Liabilities
●● Cash & Cash Equivalents
$32,000
