a)means Efficient Funds Transfer
b)can process certain cash transactions at less cost than by using the mail
c)makes it easier to document purchase and sale transactions
d)means Effective Funds Transfer
2. Entries are made to the Petty Cash account when
a) making payments out of the fund.
b) recording shortages in the fund.
c) replenishing the petty cash fund.
d) establishing the fund.
3. A $140 petty cash fund has cash of $18 and receipts of $120. The journal entry to replenish the account would include a credit to
a) Cash for $120.
b) Cash Over and Short for $2.
c) Petty Cash for $122.
d) Cash for $122.
4. Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited
a) at the end of each accounting period.
b) when a credit sale is past due.
c) whenever a pre-determined amount of credit sales have been made.
d) when an account is determined to be worthless.
5. A 90-day, 12% note for $20,000, dated April 10, is received from a customer on account. If the note is discounted at 15% on May 20, the days in the discount period are
6. A building with an appraisal value of $147,000 is made available at an offer price of $152,000. The purchaser acquires the property for $35,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $65,000. The cost basis recorded in the buyer's accounting records to recognize this purchase is
7. An asset was purchased for $120,000 and originally estimated to have a useful life of 10 years with a residual value of $10,000. After two years of straight line depreciation, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Calculate this years depreciation using the revised amounts and straight line method.
8. The accumulated depletion account is
a) an expense account
b) an intangible asset account
c) reported on the income statement as other expense
d) reported on the balance sheet as a deduction from the cost of the mineral deposit
9. On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. What is the due date of the note?
a) October 8
b) October 7
c) October 6
d) October 5
10. The interest charged by the bank, at the rate of 9%, on a 90-day, discounted note payable for $100,000 is
11.On January 5, 2009, Garrett Company, a calendar-year company, issued $500,000 of notes payable, of which $100,000 is due on January 1 for each of the next five years. The proper balance sheet presentation on December 31, 2009, is
a) Current Liabilities, $500,000.
b) Current Liabilities, $100,000; Long-term Debt, $400,000.
c) Long-term Debt, $500,000
d) Current Liabilities, $400,000; Long-term Debt, $100,000.