B.) c. What entry for income taxes should be recorded in 2017? Decrease in salaries payable, $1 million. B. If a company has cash or cash equivalents, the aggregate of these assets is always shown on the top line of the balance sheet. It will fit the new department into the current rented space by taking some square footage from the other two departments. Customers typically pay their receivables within 60 days. D) None of the above. \qquad\text{Advertising}&\text{\hspace{15pt}1,200}&\text{\hspace{20pt}500}&\text{\hspace{15pt}1,700}\\ Returns are material and reasonably predictable. At the end of business on September 1, the total displayed on the cash register tape shows $1,059 of cash sales for the day. A. The level of sales. What is major purpose of an imprest petty cash fund a. Eastern Manufacturing Company owns 40% of the outstanding common stock of Southern Supply Company. \text{Direct expenses}\\ All of the following would involve a debit memorandum except: Cash that is restricted and not available for current operations is reported in the balance sheet as: Which of the following is true about reporting cash under IFRS? petty cash 200 D. Taking the difference between the unadjusted balance in the allowance account and the desired balance. Stock dividends are reported in connection with a statement of cash flows as: D) Not reported on the statement of cash flows. True D. Provide collateral for a loan. False, The lack of agreement between the bank balance and the book balance is due to time lags and \text{2015}&\$48,000&25\%\\ checks. If a company uses the balance sheet approach to estimate bad debt expense, bad debt expense for a period can be determined by: Step 7: Subtract bank fees from the book balance IFRS Currency and coins: $12,500 All of the following are procedures used in accounting for a petty cash fund EXCEPT: A. C) allows companies to report dividends paid as either investing or operating cash flows. Complete the legal prerequisites to record their sale. High grade marketable equity securities. They are used for meeting short-term expenses of investing. D. Was motivated by the Enron scandal. A. addition to the balance per bank statement. B) $169 million. B.) D. voucher system. Corporate accounting rules also play a role in categorizing cash equivalents. Decrease in accounts receivable, $9 million A.) B) IFRS. C. miscellaneous revenue. the collection of a note receivable by the bank for the depositor. Money market funds. Rebound Inc. reports under IFRS. D. All of these answer choices must occur. Overdrafts typically are not shown as current liabilities on the balance sheet. However, money market mutual funds are not federally insured. The receipts, which totaled $194 (or $140 + $54), and the amount of cash on hand of $7 exceed the fund balance by $1 (or $194 + 7 = $201). In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized. Which of the following is true about accounting for a troubled debt restructuring? C) $171 million. 21 - The Statement of Cash Flows Revisited. D.) U.S. Treasury bills. D) Issuance of common stock You may omit explanations for the journal entries. A company writes a check to replenish a $100 petty cash fund when the fund contains receipts of $94 and $3 in cash. A. each time monies are paid from petty cash, the custodian records the details of the payment \qquad\text{Utilities expense}&\text{\hspace{15pt}2,600}&\text{\hspace{10pt}1,400}&\text{\hspace{15pt}4,000}\\ Why? Even buying one-month Treasury bills may yield higher rates than what a company may get on their savings account. \qquad\text{Sales salaries}&\text{\hspace{10pt}20,000}&\text{\hspace{10pt}7,000}&\text{\hspace{10pt}27,000}\\ \text{2020}&(60,000)&25\\ B) An addition to net income in determining cash flows from operating activities. Because cryptocurrencies are not legal tender and not backed by governments or legal entities, U.S. GAAP does not treat cryptocurrency as cash, foreign currency, or cash equivalents. Cash Flow Statement: What It Is and Examples. Which scenario below is an example of consumer surplus? Sean-McDonald Company sold a printer with a cost of $34,000 and accumulated depreciation of $21,000 for $10,000 cash. Which of the following statements is true under IFRS? D) IFRS. An increase in available-for-sale securities due to the purchasing of additional shares is reported as an investing activity in the statement of cash flows. Bad debts expense is measured indirectly, and the allowance for uncollectible accounts balance is measured directly. This year, Jason was very busy due to a shortage of personnel at the company, so he decided to just estimate the amount of ending inventory instead of doing an accurate count. C. The future value of $50,000 using a 10% interest rate. Recognize a refund liability associated with estimated returns. C. documentation procedures. Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. C. added to the book balance. Cash is the most liquid asset, and it is therefore listed first under the property, plant, and D. The present value of $50,000 using a 10% interest rate. Also, the value of inventory is not guaranteed, meaning there's no certainty in the amount that'll be received for liquidating the inventory. True To effectively plan cash inflows and outflows b. \text{2021}&130,000&25\\ What Are Cash Equivalents? D.an NSF check. Which of the following is considered a sale of receivables? Brainscape helps you realize your greatest personal and professional ambitions through strong habits and hyper-efficient studying. D. no accounting entry to record a payment when it is made from petty cash, no accounting entry to record a payment when it is made from petty cash. The company's balance sheet on September 30, reflects cash and cash equivalents of _____. A. Cash equivalents include each of the following except bank certificates of deposit. C) Differences between net income and net operating cash flow B. an NSF check. Brewer Inc. is owed $200,000 by Carol Co. under a 10% note with two years remaining to maturity. Gershwin would record this reduction by crediting accounts receivable and debiting: Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. The entry to record this interest includes a debit to Cash and a credit to Interest Revenue for $150. D. None of these answer choices are correct. A research hypothesis was that students whose parents had attained a higher level of education would on average score higher on the SAT. The two primary criteria for classification as a . A. The age of the receivables transferred differs from the average age of the receivables. Ariel Courage is an experienced editor, researcher, and former fact-checker. Adding the beginning balance in the allowance for uncollectible accounts to the provision for uncollectible accounts and deducting the desired ending balance in the allowance for uncollectible accounts. Cash is the asset most susceptible to fraudulent activities. c. Issued 2,000 shares of stock on June 1 to acquire a patent. D. $220,000. B. A) $395,000. A. B. information and communication C. Recognizing bad debts expense. $20,000. True A. locked warehouses for inventories. Current value plus accrued interest. \text{2017}&90,000&20\\ C) Stock dividends. money market funds. \end{array} Question Transcribed Image Text: Current Attempt in Progress Cash equivalents include each of the following except money market funds. A) $13 million. Disclosure of the arrangement in notes to the financial statements. D) IFRS. C.) Money orders. cash 1050 Cash and cash equivalents refers to the line item on thebalance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately. C. Estimating annual sales returns. A. $4,000 (increase in bond interest payable) - $1,000 (decrease in bond discount). However, because there is risk that a refund cannot be processed timely or there may be only a partial return of funds, prepaid assets are not considered cash equivalents. Some terms may not be used. A company carries cash and cash equivalents to pay its short-term bills but to also preserve capital for long-term capital deployment. Adjusted cash balance per books = Cash balance per books, May 31 ($3,500) + note and interest collected ($850) bank service charge ($20) NSF check ($170) = $4,160. In other words, there can be no restrictions on converting any of the securities listed as cash and cash equivalents. Sales revenue for Marshall Matches was $240,000. See Answer \qquad\text{Share of office department expenses}&\underline{\text{\hspace{10pt}10,500}}&\underline{\text{\hspace{15pt}4,500}}&\underline{\text{\hspace{10pt}15,000}}\\ The transferee has received substantially all the risks and rewards of ownership. Decreases in current operating assets are considered a cash inflow and added to net income under the indirect method. All of the following are classified as cash except: Transfers of receivables sometimes are treated as a secured borrowing. B. Cash and cash equivalents also generally earn different yields as there are different risks associated with each. B) $169 million. A. A. treasurer. C. Cash is listed first in the current assets section. B. b. Issued 5,000 shares of $5 par common stock for cash at$15 per share. A. A party authorized to enter into legal relationships on behalf of another. Cash equivalents include all of the following except A.) Exceptions can exist for short-term debt instruments such as Treasury-bills if they're being used as collateral for an outstanding loan or line of credit. B. establishment of responsibility. An organization uses internal control to safeguard assets, enhance the accuracy and reliability of accounting records, increase efficiency of operations, and. In other words, there is very little risk of collecting the full amount being reported. A) Either U.S. GAAP and IFRS. A. money market funds. The cash and cash equivalents line item on the balance sheet states the amount of cash on hand plus other highly liquid assets readily convertible into cash.. A. sales 1059 Opetty cash. A.) During the same year, $500,000 of the bond discount was amortized. C. independent internal verification. Treasury stock purchased for cash: $25 Restricted cash funds may be combined with Cash. The nature of the product or service sold. In deciding whether financing with receivables is a secured borrowing or a sale under U.S. GAAP, the critical element is the extent to which: The prior year of interest was unpaid. Technology helps managers to monitor and control business activities and includes each of the following except: less extensive testing or records 1. employees justifying fraudulent behavior 2. internal control weaknesses in a business 3. financial, family, and societal stresses to succeed 1. rationalization 2. opportunity 3. pressure True D. Retained earnings. A. C) An investing activity. B. Because of the uncertainty regarding client creditworthiness, outstanding account receivable balances are not cash equivalents even if the invoice is due or shortly to be due. It expects the Painting department to increase total office department expenses by$7,000. Receivables are not remeasured; instead, fair values are obtained from reliable factors. total manufacturing cost incurred during the year do not include: C) work in process inventory, beginning balance. It is more likely than not that the related benefits will be realized cash 200 D. taking the between. Age of cash equivalents would include each of the following except arrangement in notes to the purchasing of additional shares is as. Receivable by the bank for the journal entries the indirect method of another 25\\ What are cash equivalents to its. Value of $ 5 par common stock for cash: $ 25 Restricted cash funds may be combined with.! Co. under a 10 % interest rate asset most susceptible to fraudulent activities between net income and operating! Of consumer surplus allowance account and the desired balance preserve capital for long-term deployment! 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