Mod 12 Wrong Answers

Question 0

An NSF check should not be included in cash until it has…2

Answer 0

1 been redeposited
And
2 has cleared the bank

Question 1

A postdated check is not acceptable for deposit and is therefore…

Answer 1

Not considered cash

Question 2

In a reconciliation, in which an entry was made for a check that has not been mailed until after the end of the year should…

Answer 2

Be added back in to the checking balance

Question 3

How do you calculate under the aging method, the allowance for uncollectible accounts at year end?

Answer 3

Ending balance of allowance account =

Aging amount of A/R x estimated % uncollectible

Question 4

When an A/R that was previously written off is collected, what 2 entries must be made?

Answer 4

1 A/R. Xxx
Allowance for uncollectible accounts Xxx

2 cash. Xxx
Accounts receivable. Xxx

Question 5

When a company uses the allowance method to recognize uncollectible accounts expense, what is the effect at the time of collection on allowance for uncollectible accounts?

Answer 5

Increases

Question 6

Assignment of accounts receivable is a financing arrangement whereby…

Answer 6

The owner of the receivables (assignor) obtains a loan from
The lender (assignee) by pledging the A/R as collateral

Question 7

If financial assets are exchanged for cash or other consideration, but the transfer does not meet the criteria to be accounted for as a sale, both the transferor and transferee should accounts for the transfer as a…2

Answer 7

Secured borrowing and pledge of collateral

Question 8

Accounts receivable turnover calculation

Answer 8

Accounts receivable turnover = net credit sales/average A/R

Question 9

IFRS defines a provision as…

Answer 9

A liability that is uncertain in timing or amount

Question 10

Under IFRS, What are provisions made for?

2) How are they recorded?

Answer 10

Provisions are made for estimated liabilities

2) Recorded as loss in earnings for period if outcome is probable
And measurable

Question 11

Under IFRS, if long term debt becomes callable due to the violation of a loan covenant, the debt must be…

Answer 11

Reclassified as current

Question 12

The words “reasonably possible” require…

Answer 12

Disclosure of the item

Question 13

What is the journal entry for:

Write offs of allowance for uncollectible accounts?

Answer 13

Allowance for uncollectible accounts. Xxx

Accounts receivable. Xxx

Question 14

What is the journal entry for:

Recoveries on allowance for uncollectible accounts?

Answer 14

Accounts receivable. Xxx
Allowance for uncollectible accounts. Xxx

Cash. Xxx
Accounts receivable. Xxx

Question 15

What is the journal entry for uncollectible accounts expense?

Answer 15

Uncollectible accounts expense. Xxx

Allowance for uncollectible accounts. Xxx