ACCT 2010 Exam 2 Review Questions
and 100% Correct Answers
The journal entry to record the factoring of receivables would include ✅a debit to cash,
debit to financing expense, and credit to accounts receivable
When computing the quick ratio, the numerator will include all of the following except for
✅inventory
A business offers credit terms of 2/15, n/30. These terms indicate that ✅a discount of
2% can be taken if the bill is paid within 15 days of invoice
A fidelity bond is an ✅insurance policy that reimburses a company for any losses due
to employee theft
For good internal control ✅the purchasing agent should not receive goods or approve
the invoice for payment
With regard to accounts receivable, a separate account for each customer is kept in a
✅subsidiary ledger
Bleu Company was charged $25 for a check printing fee associated with its checking
account. Which journal entry is required? ✅debit miscellaneous expense for $25 and
credit cash for $25
Under the allowance method, when a company determine that a specific customer's
accounts receivable will not be collected, its accounting department will debit
✅allowance for uncollectible and credit account receivable
three key duties that must always be separated under a good system of internal control
are ✅asset handling, record keeping, and transaction approval
the person who prepares the bank reconciliation ✅should not have other cash duties
Which balance sheet account shows the amount of accounts receivable that the
business does not expect to collect> ✅allowance for uncollectible
Two accounts that appear on the financial statements of a merchandising company that
are not needed by a service company are ✅cost of goods sold and inventory
and 100% Correct Answers
The journal entry to record the factoring of receivables would include ✅a debit to cash,
debit to financing expense, and credit to accounts receivable
When computing the quick ratio, the numerator will include all of the following except for
✅inventory
A business offers credit terms of 2/15, n/30. These terms indicate that ✅a discount of
2% can be taken if the bill is paid within 15 days of invoice
A fidelity bond is an ✅insurance policy that reimburses a company for any losses due
to employee theft
For good internal control ✅the purchasing agent should not receive goods or approve
the invoice for payment
With regard to accounts receivable, a separate account for each customer is kept in a
✅subsidiary ledger
Bleu Company was charged $25 for a check printing fee associated with its checking
account. Which journal entry is required? ✅debit miscellaneous expense for $25 and
credit cash for $25
Under the allowance method, when a company determine that a specific customer's
accounts receivable will not be collected, its accounting department will debit
✅allowance for uncollectible and credit account receivable
three key duties that must always be separated under a good system of internal control
are ✅asset handling, record keeping, and transaction approval
the person who prepares the bank reconciliation ✅should not have other cash duties
Which balance sheet account shows the amount of accounts receivable that the
business does not expect to collect> ✅allowance for uncollectible
Two accounts that appear on the financial statements of a merchandising company that
are not needed by a service company are ✅cost of goods sold and inventory
