ACCT 2000 Exam 4 Study Guide Questions with verified answers

ACCT 2000 Exam 4 Study Guide Questions with ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




verified answers ||\\|//||




What are the limitations of internal controls?
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Collusion, human error, and cost-benefit considerations ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




What items adjust the book balance in a bank reconciliation?
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Bank fees, NSF checks, book errors, EFT payments/receipts
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What items adjust the bank balance in a bank reconciliation?
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Deposits in transit, outstanding checks, bank errors ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




What is meant by maintaining an appropriate cash balance?
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Companies must ensure they have enough cash to pay obligations and invest idle cash to ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




earn interest. ||\\|//||




What are the types of receivables? ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Accounts receivable, notes receivable, other receivables ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




Why is the allowance for doubtful accounts important?
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It prevents overstatement of assets by estimating future uncollectible amounts.
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How do you adjust Allowance for Doubtful Accounts if there is an existing DEBIT balance?
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Add the debit balance to the required ending balance to find the adjustment amount.
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How do you adjust Allowance for Doubtful Accounts if there is an existing CREDIT
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balance?

Subtract the credit balance from the required ending balance to find the adjustment
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amount.

How do you calculate accrued interest on notes receivable?
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Interest = Principal × Rate × Time (Time is fraction of year)||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||




What is the purpose of the aging schedule for bad debts?
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