Financial Accounting 1
Multiple Choice:
1. In general terms, financial assets appear in the balance sheet at:
a. Face value
b. Current value
c. Cost
d. Estimated future sales value
2. Which of the following practices contributes to efficient cash management?
a. Never borrow money – maintain a cash balance sufficient to make all necessary payments.
b. Record all cash receipts and cash payments at the end of the month when reconciling the bank statements.
c. Prepare monthly forecasts of planned cash receipts, payments, and anticipated cash balances up to a year in advance.
d. Pay each bill as soon as the invoice arrives.
3. Each of the following measures strengthens internal control over cash receipts except:
a. Factoring accounts receivable.
b. Preparation of a daily listing of all checks received through the mail.
c. The deposit of cash receipts in the bank on a daily basis.
d. The use of cash registers.
4. Quinn Company’s bank statement at January 31 shows a balance of $13,360, while the ledger account for Cash in Quinn’s ledger shows a balance of $12,890 at the same date. The only reconciling items are the following:
• Deposit in transit, $890.
• Bank service charge, $24.
• NSF check from customer Greg Denton in the amount of $426.
• Error in recording check no. 389 for rent: check was written in the amount of $1,320, but was recorded improperly in the accounting records as $1,230.
• Outstanding checks, $????
What is the total amount of outstanding checks at January 31?
a. $1,048
b. $868
c. $1,900
d. $1,720
5. Assuming a single journal entry is made to adjust Quinn Company’s accounting records at January 31, the journal entry includes:
a. A debit to Rent Expense for $90.
b. A credit to Accounts Receivable, G. Denton, for $426.
c.
1. In general terms, financial assets appear in the balance sheet at:
a. Face value
b. Current value
c. Cost
d. Estimated future sales value
2. Which of the following practices contributes to efficient cash management?
a. Never borrow money – maintain a cash balance sufficient to make all necessary payments.
b. Record all cash receipts and cash payments at the end of the month when reconciling the bank statements.
c. Prepare monthly forecasts of planned cash receipts, payments, and anticipated cash balances up to a year in advance.
d. Pay each bill as soon as the invoice arrives.
3. Each of the following measures strengthens internal control over cash receipts except:
a. Factoring accounts receivable.
b. Preparation of a daily listing of all checks received through the mail.
c. The deposit of cash receipts in the bank on a daily basis.
d. The use of cash registers.
4. Quinn Company’s bank statement at January 31 shows a balance of $13,360, while the ledger account for Cash in Quinn’s ledger shows a balance of $12,890 at the same date. The only reconciling items are the following:
• Deposit in transit, $890.
• Bank service charge, $24.
• NSF check from customer Greg Denton in the amount of $426.
• Error in recording check no. 389 for rent: check was written in the amount of $1,320, but was recorded improperly in the accounting records as $1,230.
• Outstanding checks, $????
What is the total amount of outstanding checks at January 31?
a. $1,048
b. $868
c. $1,900
d. $1,720
5. Assuming a single journal entry is made to adjust Quinn Company’s accounting records at January 31, the journal entry includes:
a. A debit to Rent Expense for $90.
b. A credit to Accounts Receivable, G. Denton, for $426.
c.