ACCT 2010 Exam 2 Review Questions and Already Passed Solutions Updated.

The journal entry to record the factoring of receivables would include - Answer 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 - Answer inventory A business offers credit terms of 2/15, n/30. These terms indicate that - Answer a discount of 2% can be taken if the bill is paid within 15 days of invoice A fidelity bond is an - Answer insurance policy that reimburses a company for any losses due to employee theft For good internal control - Answer 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 - Answer subsidiary ledger Bleu Company was charged $25 for a check printing fee associated with its checking account. Which journal entry is required? - Answer 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 - Answer allowance for uncollectible and credit account receivable three key duties that must always be separated under a good system of internal control are - Answer asset handling, record keeping, and transaction approval the person who prepares the bank reconciliation - Answer should not have other cash duties Which balance sheet account shows the amount of accounts receivable that the business does not expect to collect - Answer allowance for uncollectible