FAC 1502 MOCK EXAM REVIEW SOLVED QUESTIONS COMPLETE ANSWERS GRADED A
PLUS
Question:
RECONCILIATION OF THE BANK STATEMENT.
Answer:
The process of verifying that the bank statement and the checkbook balances are in agreement. As
you reconcile the bank statement with your accounts, be aware of outstanding checks, outstanding
deposits, and any service fees the bank may have charged.
Question:
SETTLEMENT DISCOUNT GRANTED.
Answer:
Discount is often offered to debtors in order to encourage a quick settlement of their debts within the
stated credit term.
Question:
ALLOWANCE FOR SETTLEMENT DISCOUNT GRANTED.
Answer:
The allowance for settlement discount granted will reduce the sales amount that will be recorded.
Question:
CREDIT LOSSES: WRITITNG OFF OF CREDIT LOSSES.
Answer:
The amount of the credit losses will be debited (Dr) to the credit losses account and credited (Cr) to
the personal account and the trade receivables control account.
, Question:
CREDIT LOSSES: ALLOWANCES.
Answer:
Deducted from trade receivables. Closed off to the profit and loss account.
Question:
CREDIT LOSSES: INCREASING THE CREDIT LOSS.
Answer:
The allowance for credit losses must be deducted from the trade receivables control to determine the
amount at which debtors must take into account.
Question:
CREDIT LOSSES: DECREASING THE CREDIT LOSS.
Answer:
Debit (Dr) the allowance for credit losses account and credit (Cr) the credit losses account.
Question:
WRITING OFF CREDIT LOSSES WHEN AN ALLOWANCE FOR CREDIT LOSSES.
Answer:
1. Credit Losses can be written off against the allowance account Dr - Allowance Account; Cr -
Debtor's Personal Account; Cr - Trade Receivables 2. Credit losses that occur during the year are
written off against the credit losses account
Question:
CREDIT LOSSES: RECOVERY WRITTEN OFF.
Answer:
PLUS
Question:
RECONCILIATION OF THE BANK STATEMENT.
Answer:
The process of verifying that the bank statement and the checkbook balances are in agreement. As
you reconcile the bank statement with your accounts, be aware of outstanding checks, outstanding
deposits, and any service fees the bank may have charged.
Question:
SETTLEMENT DISCOUNT GRANTED.
Answer:
Discount is often offered to debtors in order to encourage a quick settlement of their debts within the
stated credit term.
Question:
ALLOWANCE FOR SETTLEMENT DISCOUNT GRANTED.
Answer:
The allowance for settlement discount granted will reduce the sales amount that will be recorded.
Question:
CREDIT LOSSES: WRITITNG OFF OF CREDIT LOSSES.
Answer:
The amount of the credit losses will be debited (Dr) to the credit losses account and credited (Cr) to
the personal account and the trade receivables control account.
, Question:
CREDIT LOSSES: ALLOWANCES.
Answer:
Deducted from trade receivables. Closed off to the profit and loss account.
Question:
CREDIT LOSSES: INCREASING THE CREDIT LOSS.
Answer:
The allowance for credit losses must be deducted from the trade receivables control to determine the
amount at which debtors must take into account.
Question:
CREDIT LOSSES: DECREASING THE CREDIT LOSS.
Answer:
Debit (Dr) the allowance for credit losses account and credit (Cr) the credit losses account.
Question:
WRITING OFF CREDIT LOSSES WHEN AN ALLOWANCE FOR CREDIT LOSSES.
Answer:
1. Credit Losses can be written off against the allowance account Dr - Allowance Account; Cr -
Debtor's Personal Account; Cr - Trade Receivables 2. Credit losses that occur during the year are
written off against the credit losses account
Question:
CREDIT LOSSES: RECOVERY WRITTEN OFF.
Answer:
