16) Petty cash payments are recorded in the accounting systemwhen:
the petty cash fund needs to be replenished
a payment is made out of petty cash
a bank reconciliation is prepared for the petty cash fund
cash is received from returns of merchandise
21)
In a perpetual system, when inventory is sold on account:
Sales Revenue is increased and Accounts Receivable isdecreased.
Sales Revenue, Cost of Goods Sold, and Accounts Receivable areincreased while Inventory is decreased.
Sales Revenue and Accounts Receivable are increased, and Cost ofGoods Sold and Inventory are decreased.
Sales Revenue is increased and Inventory is decreased.
22 )
Multistep income statements:
are required for merchandise companies.
contain more detail than just listing revenues and expenses.
are required when the perpetual inventory method is used.
classify Cost of Goods Sold as a selling expense.
16) Petty cash payments are recorded in the accounting systemwhen:
the petty cash fund needs to be replenished
a payment is made out of petty cash
a bank reconciliation is prepared for the petty cash fund
cash is received from returns of merchandise
21)
In a perpetual system, when inventory is sold on account:
Sales Revenue is increased and Accounts Receivable isdecreased.
Sales Revenue, Cost of Goods Sold, and Accounts Receivable areincreased while Inventory is decreased.
Sales Revenue and Accounts Receivable are increased, and Cost ofGoods Sold and Inventory are decreased.
Sales Revenue is increased and Inventory is decreased.
22 )
Multistep income statements:
are required for merchandise companies.
contain more detail than just listing revenues and expenses.
are required when the perpetual inventory method is used.
classify Cost of Goods Sold as a selling expense.
Related questions
The Marchetti Soup Company entered into the following transactionsduring the month of June: (a) purchased inventory on account for$185,000 (assume Marchetti uses a perpetual inventory system); (b)paid $48,000 in salaries to employees for work performed during themonth; (c) sold merchandise that cost $136,000 to credit customersfor $240,000; (d) collected $220,000 in cash from credit customers;and (e) paid suppliers of inventory $165,000. |
Post the above transactions in the T-accounts given below. Assumethat the opening balances in each of the accounts is zero exceptfor cash, accounts receivable, and accounts payable that hadopening balances of $69,000, $51,000, and $30,000,respectively. |
cash, inventory, sales revenue, salaries expense, accountsrecievable, accounts payable, and costs of goods sold
Question 14 pts
The five components to a system of internal controls include all of the following except:
| control procedure |
| risk assessment |
| safeguarding assets |
| monitoring controls |
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Question 24 pts
An automobile company testing brakes on new vehicles is part of:
| control procedure |
| risk assessment |
| information systems |
| monitoring controls |
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Question 34 pts
Which account would we debit to open a new petty cash fund?
| cash |
| petty cash |
| miscellaneous expense |
| petty cash expense |
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Question 44 pts
Our company established a petty cash fund with a balance of $200. We have petty cash receipts for travel expenses that total $125. We have counted petty cash and found that we were $2 short. Which of the following would be included in the entry to replenish the fund?
| a credit to petty cash for $127 |
| a debit to travel expenses for $125 |
| a credit to cash over and short for $2 |
| a credit to cash for $125 |
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Question 54 pts
On a bank reconciliation, which of the following will not appear as a deduction on a bank statement?
| deposit |
| NSF check (non-sufficient funds) |
| service charge |
| Payments made by EFT (electronic fund transfer) |
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Question 64 pts
Our company received a bank statement with a balance of $10,000. The reconciling items include outstanding checks that totaled $2,000 and a deposit in transit of $1,000. What is the adjusted bank balance after we complete the bank reconciliation?
| $7,000 |
| $9,000 |
| $11,000 |
| $13,000 |
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Question 74 pts
Our company has decided to write off an uncollectible account of $3,000. What account would we credit to record bad debt expense if our company uses the direct write-off method for bad debts?
| bad debt expense |
| accounts receivable |
| allowance for doubtful accounts |
| cash |
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Question 84 pts
Where does allowance for doubtful accounts appear on our financial statements?
| on balance sheet as a current liability |
| on income statement as part of cost of goods sold |
| on balance sheet as a contra asset related to accounts receivable |
| on the statement of retained earnings as a deduction from net income |
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Question 94 pts
At the end of 2018, we have a credit balance of $10,000 in allowance for doubtful accounts before the adjusting entry for bad debts expense. The company uses the percentage of sales method to estimate bad debt expense. The company estimates that 3% of net credit sales will be uncollectible for the year. Net credit sales for the year amounted to $1,000,000. What account and amount would we debit to record the adjusting entry for bad debt expense?
| bad debt expense, $30,000 |
| allowance for doubtful accounts, $30,000 |
| bad debt expense, $20,000 |
| accounts receivable, $20,000 |
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Question 104 pts
On July 1, 2017, our company accepts a 9-month 5% note for $12,000. What account and amount would we debit when we record the year-end adjusting entry on December 31, 2017?
| interest revenue, $300 |
| interest revenue, $350 |
| interest receivable, $300 |
| interest receivable, $350 |
