accounting MCQS

$profile$ Accountingexpert4u

During the month of September, Norris Industries issued a check in the amount of $859 to a supplier on account. The check cleared the bank during September. The disbursement was recorded incorrectly as $878. The journal entry to correct this mistake when discovered will include:

[removed]

[removed]	a debit to Accounts Payable for $878.
[removed]	a credit to Cash for $19.
[removed]	a credit to Accounts Payable for $19.
[removed]	a credit to Cash for $878.
[removed]	a debit to Cash for $59.

2. A company that uses the net method of recording invoices made a purchase of $1,200 with terms of 3/10, n/30. The entry to record the purchase would include:

[removed]

[removed]	a credit to Cash for $1,164.
[removed]	a debit to Merchandise Inventory for $1,164.
[removed]	a debit to Discounts Lost for $36.
[removed]	a credit to Discounts Lost for $36.
[removed]	a debit to Cash for $1,164

3. In the process of reconciling Marks Enterprises' bank statement for September, Mr. Marks compiles the following information:

Cash balance per company books on September 30	$6,430
Deposits in transit at month-end	$1,050
Outstanding checks at month-end	$610
Bank charge for printing new checks	$50
Note receivable and interest collected by bank on Marks’ behalf	$710
A check given to Marks during the month by a customer is returned by the bank as NSF	$530

The adjusted cash balance per the books on September 30 is:

[removed]

[removed]	$6,560
[removed]	$6,960
[removed]	$7,140
[removed]	$7,720
[removed]	$6,480

4. The following information is taken from Hogan Company's December 31 balance sheet:

Cash and cash equivalents	$8,400
Accounts receivable	71,900
Merchandise inventories	60,700
Prepaid expenses	4,400
Accounts payable	$15,600
Notes payable	86,900
Other current liabilities	10,000

If net credit sales and cost of goods sold for the current year were $690,000 and $367,000, respectively, the firm's days' sales uncollected for the year is: (rounded)

[removed]

[removed]	38 days
[removed]	8 days
[removed]	32 days
[removed]	10 days
[removed]	72 days

5. Battel had net sales of $5,000 million and ending accounts receivable of $950 million. Its days' sales uncollected was (rounded):

[removed]

[removed]	71 days.
[removed]	14 days.
[removed]	25 days.
[removed]	69 days.
[removed]	25 days.

6. At the end of the day, the cash register's tape shows $995 but the count of cash in the register is $1,095. The proper entry to account for this excess includes a:

[removed]

[removed]	credit to Cash Over and Short for $100.
[removed]	credit to Cash for $100.
[removed]	debit to Petty Cash for $100.
[removed]	debit to Cash for $100.
[removed]	debit to Cash Over and Short for $100.

7. Nattel had net sales of $4,300 million and ending accounts receivable of $500 million. Its days' sales uncollected was (rounded):

[removed]

[removed]	42 days.
[removed]	12 days.
[removed]	29 days.
[removed]	44 days.
[removed]	45 days.

8. During the month of September, Norris Industries issued a check in the amount of $856 to a supplier on account. The check cleared the bank during September. The disbursement was recorded incorrectly as $882. The journal entry to correct this mistake when discovered will include:

[removed]

[removed]	a debit to Cash for $66.
[removed]	a credit to Cash for $882.
[removed]	a credit to Cash for $26.
[removed]	a credit to Accounts Payable for $26.
[removed]	a debit to Accounts Payable for $882.

9. Assume that the custodian of a $460 petty cash fund has $68 in coins and currency plus $386 in receipts at the end of the month. The entry to replenish the petty cash fund will include:

[removed]

[removed]	a credit to Cash for $392.
[removed]	a debit to Cash for $392.
[removed]	a credit to Cash Over and Short for $5.
[removed]	a debit to Petty Cash for $386.
[removed]	a debit to Cash for $318.

10. Martha Company has an established petty cash fund in the amount of $520. The fund was last reimbursed on November 30. At the end of December, the fund contained the following petty cash receipts:

December 4	Freight charge for merchandise purchased	$38
December 7	Freight charge for delivery to customer	$65
December 12	Purchase of office supplies	$32
December 18	Donation to charitable organization	$49

If, in addition to these receipts, the petty cash fund contains $320 of cash, the journal entry to reimburse the fund on December 31 will include:

[removed]

[removed]	a debit to Transportation-In of $33.
[removed]	a credit to Office Supplies of $81.
[removed]	a credit to Cash Over and Short of $16.
[removed]	a debit to Cash Over and Short of $16.
[removed]	a debit to Transportation-Out of $33.

11. A company that uses the net method of recording invoices made a purchase of $600 with terms of 4/10, n/30. The entry to record the purchase would include:

[removed]

[removed]	a credit to Cash for $576.
[removed]	a debit to Merchandise Inventory for $576.
[removed]	a debit to Discounts Lost for $24.
[removed]	a credit to Discounts Lost for $24.
[removed]	a debit to Cash for $576.

12. At the end of the day, the cash register's record shows $1,350, but the count of cash in the cash register is $1,000. The correct entry to record the cash sales is

[removed]

Cash over and short	350
Sales		350

[removed]

Cash	1,350
Sales		1,350

[removed]

Cash	1,000
Cash over and short	350
Sales		1,350

[removed]

Cash	1,000
Sales		1,000

[removed]

Cash	1,350
Sales		1,000
Cash over and short		350

13. The following information is available for Holland Company at December 31:

Money market fund balance	$2,860
Certificate of deposit maturing June 30 of next year	$22,000
Postdated checks from customers	$1,490
Cash in bank account	$22,800
NSF checks from customers returned by bank	$650
Cash in petty cash fund	$210
Inventory of postage stamps	$25
U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year	$14,000

Based on this information, Holland Company should report Cash and Cash Equivalents on December 31 of:

[removed]

[removed]	$49,825
[removed]	$49,800
[removed]	$38,315
[removed]	$39,870
[removed]	$39,095

14. The following information is taken from Hogan Company's December 31 balance sheet:

Cash and cash equivalents	$8,500
Accounts receivable	70,600
Merchandise inventories	60,300
Prepaid expenses	4,300
Accounts payable	$15,600
Notes payable	87,000
Other current liabilities	9,300

If net credit sales and cost of goods sold for the current year were $620,000 and $368,000, respectively, the firm's days' sales uncollected for the year is: (rounded)

[removed]

[removed]	9 days
[removed]	42 days
[removed]	70 days
[removed]	35 days
[removed]	10 days

15. A company had net sales of $34,000 and ending accounts receivable of $2,900 for the current period. Its days' sales uncollected equals (rounded):

[removed]

[removed]	31 days.
[removed]	8 days.
[removed]	1 days.
[removed]	93 days.
[removed]	32 days.

16. A company plans to decrease a $210 petty cash fund to $75. The current balance in the account includes $40 petty cash payment in receipts and $160 in currency. The entry to reduce the fund will include a:

[removed]

[removed]	debit to Miscellaneous Expenses for $170.
[removed]	credit to Cash for $85.
[removed]	debit to Cash Short and Over for $35.
[removed]	credit to Petty Cash for $160.
[removed]	debit to Cash for $85.

17. A company records purchases using the net method. On February 1, they purchased merchandise inventory on account for $9,200 with terms of 2/10, n/30. The February 1 journal entry to record this transaction would include a:

[removed]

[removed]	debit to Merchandise Inventory of $184.
[removed]	credit to Accounts Payable of $9,200.
[removed]	credit to Merchandise Inventory of $184.
[removed]	debit to Merchandise Inventory of $9,200.
[removed]	debit to Merchandise Inventory of $9,016.

18. The following information is available for Holland Company at December 31:

Money market fund balance	$2,890
Certificate of deposit maturing June 30 of next year	$24,000
Postdated checks from customers	$1,440
Cash in bank account	$23,250
NSF checks from customers returned by bank	$630
Cash in petty cash fund	$210
Inventory of postage stamps	$25
U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year	$16,000

Based on this information, Holland Company should report Cash and Cash Equivalents on December 31 of:

[removed]

[removed]	$42,350
[removed]	$40,715
[removed]	$52,210
[removed]	$43,125
[removed]	$52,235

19. The following information is available for Johnson Manufacturing Company at June 30:

Cash in bank account	$8,430
Inventory of postage stamps	$72
Money market fund balance	$12,600
Petty cash balance	$420
NSF checks from customers returned by bank	$886
Postdated checks received from customers	$396
Money orders	$260
A nine-month certificate of deposit maturing on December 31 of current year	$8,400

Based on this information, Johnson Manufacturing Company should report Cash and Cash Equivalents on June 30 of:

[removed]

[removed]	$29,762
[removed]	$21,522
[removed]	$21,710
[removed]	$21,450
[removed]	$21,102

20. Merchandise with an invoice price of $2,200 was purchased on October 3, terms 2/15, n/60. The company uses the net method to record purchases. The entry to record the cash payment of this purchase obligation on October 17 is:

[removed]

Accounts Payable............................	2,156
Cash.......................................		2,156

[removed]

Accounts Payable............................	2,200
Discounts Lost...........................		44
Cash.........................................		2,156

[removed]

Accounts Payable............................	2,200
Cash.........................................		2,200

[removed]

Accounts Payable............................	2,200
Merchandise Inventory................		44
Cash.........................................		2,156

[removed]

Accounts Payable...........................	2,200
Merchandise Inventory...............		88
Cash........................................		2,112

21. If a check correctly written and paid by the bank for $806 is incorrectly recorded in the company's books for $759, how should this error be treated on the bank reconciliation?

[removed]

[removed]	Subtract $47 from the book balance.
[removed]	Add $47 to the bank's balance.
[removed]	Subtract $47 from the bank's balance and add $47 to the book's balance.
[removed]	Subtract $47 from the bank's balance.
[removed]	Add $47 to the book balance.

22. A company plans to decrease a $230 petty cash fund to $80. The current balance in the account includes $50 petty cash payment in receipts and $170 in currency. The entry to reduce the fund will include a:

[removed]

[removed]	credit to Cash for $90.
[removed]	debit to Cash Short and Over for $30.
[removed]	debit to Cash for $90.
[removed]	debit to Miscellaneous Expenses for $180.
[removed]	credit to Petty Cash for $170.

23. A company had $60 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure is to:

[removed]

[removed]	credit Petty Cash for $60.
[removed]	credit Cash for $60.
[removed]	debit Cash Over and Short for $60.
[removed]	credit Cash Over and Short for $60.
[removed]	debit Petty Cash for $

24. A company had net sales of $31,000 and ending accounts receivable of $2,300 for the current period. Its days' sales uncollected equals (rounded):

[removed]

[removed]	1 days.
[removed]	6 days.
[removed]	85 days.
[removed]	28 days.
[removed]	27 days.

25. A company had $56 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure is to:

[removed]

[removed]	credit Petty Cash for $56.
[removed]	credit Cash Over and Short for $56.
[removed]	debit Petty Cash for $56.
[removed]	credit Cash for $56.
[removed]	debit Cash Over and Short for $56.

13 years ago

Report issue

solution of these MCQS

NOT RATED

Purchase the answer to view it