ACCT 5312 EXAM 2 2026-2027 QUESTIONS AND
ANSWERS (PRACTICE QUESTIONS) WITH
SOLUTIONS LATEST | ALREADY GRADED
A+|NEW!
1. When an uncollectible account receivable is written off against the
allowance for bad debts:
A. total current assets decrease and expenses increase.
B. total current assets are not affected.
C. total current assets decrease and expenses decrease.
D. current assets decrease and expenses are not affected. - ANSWER-
total current assets are not affected.
2. The current assets of most companies are usually made up of:
A. assets that are currently used in the operations of the company.
,B. cash and assets expected to be converted to cash within a year.
C. a very small proportion (less than 10%) of the total assets of the
entity.
D. cash, marketable securities, and accounts and notes receivable. -
ANSWER-cash and assets expected to be converted to cash within a year.
2. Which of the following is the correct balance sheet presentation for
current assets?
A. Cash, inventories, account receivables, prepaid expenses.
B. Cash equivalents, cash, other current assets, accounts receivable.
C. Accounts receivable, inventories, prepaid expenses, other current
assets.
D. Marketable securities, cash, notes receivable, prepaid expenses. -
ANSWER-Accounts receivable, inventories, prepaid expenses, other
current assets.
3. The principal reason for reconciling the cash balance per books with
the balance shown on the bank statement is to:
,A. determine the amount of cash in the account actually available to the
entity.
B. satisfy generally accepted accounting principles.
C. verify the amount of petty cash on hand.
D. determine whether or not the entity has issued an NSF check. -
ANSWER-determine the amount of cash in the account actually available
to the entity.
4. For which of the following reconciling items would an adjusting entry
be necessary on the company's book?
A. A deposit in transit.
B. An error by the bank.
C. Outstanding checks.
D. A bank service charge. - ANSWER-A bank service charge.
, When a manufacturer invests in short-term marketable securities:
A. the return on investment is more important than the risk involved.
B. the securities are likely to have a maturity date more than a year in
the future.
C. the market value of the securities is likely to fluctuate significantly.
D. risk avoidance is of great importance. - ANSWER-risk avoidance is of
great importance.
6. A cash equivalent is a current asset that:
A. will be converted to cash within one year.
B. will be converted to cash within one month.
C. is readily convertible into cash with a minimal risk.
D. is readily convertible into cash with a substantial risk.
ANSWERS (PRACTICE QUESTIONS) WITH
SOLUTIONS LATEST | ALREADY GRADED
A+|NEW!
1. When an uncollectible account receivable is written off against the
allowance for bad debts:
A. total current assets decrease and expenses increase.
B. total current assets are not affected.
C. total current assets decrease and expenses decrease.
D. current assets decrease and expenses are not affected. - ANSWER-
total current assets are not affected.
2. The current assets of most companies are usually made up of:
A. assets that are currently used in the operations of the company.
,B. cash and assets expected to be converted to cash within a year.
C. a very small proportion (less than 10%) of the total assets of the
entity.
D. cash, marketable securities, and accounts and notes receivable. -
ANSWER-cash and assets expected to be converted to cash within a year.
2. Which of the following is the correct balance sheet presentation for
current assets?
A. Cash, inventories, account receivables, prepaid expenses.
B. Cash equivalents, cash, other current assets, accounts receivable.
C. Accounts receivable, inventories, prepaid expenses, other current
assets.
D. Marketable securities, cash, notes receivable, prepaid expenses. -
ANSWER-Accounts receivable, inventories, prepaid expenses, other
current assets.
3. The principal reason for reconciling the cash balance per books with
the balance shown on the bank statement is to:
,A. determine the amount of cash in the account actually available to the
entity.
B. satisfy generally accepted accounting principles.
C. verify the amount of petty cash on hand.
D. determine whether or not the entity has issued an NSF check. -
ANSWER-determine the amount of cash in the account actually available
to the entity.
4. For which of the following reconciling items would an adjusting entry
be necessary on the company's book?
A. A deposit in transit.
B. An error by the bank.
C. Outstanding checks.
D. A bank service charge. - ANSWER-A bank service charge.
, When a manufacturer invests in short-term marketable securities:
A. the return on investment is more important than the risk involved.
B. the securities are likely to have a maturity date more than a year in
the future.
C. the market value of the securities is likely to fluctuate significantly.
D. risk avoidance is of great importance. - ANSWER-risk avoidance is of
great importance.
6. A cash equivalent is a current asset that:
A. will be converted to cash within one year.
B. will be converted to cash within one month.
C. is readily convertible into cash with a minimal risk.
D. is readily convertible into cash with a substantial risk.
