preliminary exam Flashcards
which method of recording bad debt is consistent with accrual accounting?
Allowance method
It is measured at face value in the statement of financial position.
Cash
which of the following describes accounting?
aptly called the language of business
what internal control feature is specific to petty cash?
Imprest system
which of the following item must be added to the cash balance per ledger in preparing a bank reconciliation that ends with an adjusted cash balance?
notes receivable collected by the bank in favor of the depositor and credited to the account of the depositor
An entity uses allowance method to recognize doubtful account expense. what is the effect of the collection of an account previously written off?
increase in allowance for doubtful account for no effect on doubtful account expense
Which is the best way to discourage a sales clerk from using sales invoice to make a cash sale to a customer and then pocketing a cash and destroying the company’s copy of the sales invoice?
serialization of sales invoice
These are receivables are the results of the normal operating undertakings of a firm.
Trade receivables
What is compensating balance?
Minimum deposit required to be maintained in connection with a borrowing arrangement
It is the process of determining the monetary amounts of the transaction to be carried or recognized in the financial statement.
Measuring
It is an extensive network of approvals by authorized individuals acting independently to insure that all disbursements by check are proper
Voucher system
Which internal control is being applied if the work assignment for one (1) employee is designed to check on the work of another employee?
Independent internal verification
It is used by companies to avoid frequent changes in catalogs, alter prices for different quantities purchase, or hide the true invoice price from the competitors.
Trade discount
Which activity in the accounting process means recognition or non-recognition of accountable events?
Identifying
What is the main product of the accounting process?
General purpose financial statement
statement 1.the overall objective of accounting is to provide quantitative financial information about business that is useful to the users of the financial statement in making economic decisions.
statement 2. economic activities are outside the scope of accounting.
Statement 1 is incorrect; statement 2 is correct
After recording the business transaction, Kenneth posted all the transaction in their corresponding ledgers. Which communicating process did he perform?
Classifying
which of the following is NOT a part of cash?
a. currency
b. checking account balance
c. money market instrument
d. saving account balance
Money market instrument
statement 1. measurement activity refers to the recognition and non-recognition accountable events.
statement 2. measurement activity refers to the process of preparing and distributing accounting reports to potential users of accounting information.
All statement are incorrect
Suppose point-of-sale (POS) system of a large department store indicates a sales revenue of P250,000 but the cash received is P249,800. Which of the following entries must the store make to record the day’s sales?
Dr. cash P249,800 short or over 200 Cr. sales P250,00
statement 1. identifying is the process of determining the monetary amounts at which the elements of financial statement are to be recognized.
statement 2. classifying refers to the preparation of financial statement.
Both statement are incorrect
DC Company provided the following data on December 31, 2X14: checkbook balance - P4,000,000; bank statement balance- P5,000,000; check drawn on DC company’s account, payable to supplier, dated and recorded on December 31, 2X14, but not mailed until January 15, 2X15 - P500,000; and cash in sinking fund - P2,000,000. on December 31,2X14, what should be reported as “cash” under current asset?
P4,500,00
Suppose the point-of-sale (POS) system of a large department store indicates a sales revenue of P252,000, but the cash received is P249,800. Which of the following entries must the store make to record the day’s sale?
Dr Cash P249,000; Dr Cash Short and Over P2,200; Cr Sales P252,000
Mia accounted for all ABC Company’s sales transactions in its journal for November. Which communicating process did she perform?
Recording
