Question Detail:
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:
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a debit to Accounts Payable for $878.
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a credit to Cash for $19.
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a credit to Accounts Payable for $19.
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a credit to Cash for $878.
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a debit to Cash for $59.
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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:
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a credit to Cash for $1,164.
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a debit to Merchandise Inventory for $1,164.
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a debit to Discounts Lost for $36.
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a credit to Discounts Lost for $36.
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a debit to Cash for $1,164
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3. In the process of reconciling Marks Enterprises' bank statement for September, Mr. Marks compiles the following information:
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Cash balance per company books on September 30
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$6,430
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Deposits in transit at month-end
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$1,050
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Outstanding checks at month-end
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$610
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Bank charge for printing new checks
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$50
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Note receivable and interest collected by bank on Marks behalf
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$710
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A check given to Marks during the month by a customer is returned by the bank as NSF
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$530
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The adjusted cash balance per the books on September 30 is:
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$6,560
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$6,960
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$7,140
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$7,720
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$6,480
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4. The following information is taken from Hogan Company's December 31 balance sheet:
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Cash and cash equivalents
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$8,400
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Accounts receivable
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71,900
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Merchandise inventories
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60,700
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Prepaid expenses
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4,400
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Accounts payable
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$15,600
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Notes payable
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86,900
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Other current liabilities
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10,000
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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)
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38 days
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8 days
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32 days
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10 days
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72 days
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5. Battel had net sales of $5,000 million and ending accounts receivable of $950 million. Its days' sales uncollected was (rounded):
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71 days.
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14 days.
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25 days.
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69 days.
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25 days.
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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:
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credit to Cash Over and Short for $100.
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credit to Cash for $100.
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debit to Petty Cash for $100.
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debit to Cash for $100.
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debit to Cash Over and Short for $100.
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7. Nattel had net sales of $4,300 million and ending accounts receivable of $500 million. Its days' sales uncollected was (rounded):
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42 days.
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12 days.
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29 days.
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44 days.
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45 days.
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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:
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a debit to Cash for $66.
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a credit to Cash for $882.
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a credit to Cash for $26.
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a credit to Accounts Payable for $26.
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a debit to Accounts Payable for $882.
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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:
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a credit to Cash for $392.
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a debit to Cash for $392.
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a credit to Cash Over and Short for $5.
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a debit to Petty Cash for $386.
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a debit to Cash for $318.
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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:
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December 4
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Freight charge for merchandise purchased
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$38
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December 7
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Freight charge for delivery to customer
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$65
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December 12
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Purchase of office supplies
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$32
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December 18
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Donation to charitable organization
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$49
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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:
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a debit to Transportation-In of $33.
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a credit to Office Supplies of $81.
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a credit to Cash Over and Short of $16.
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a debit to Cash Over and Short of $16.
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a debit to Transportation-Out of $33.
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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:
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a credit to Cash for $576.
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a debit to Merchandise Inventory for $576.
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a debit to Discounts Lost for $24.
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a credit to Discounts Lost for $24.
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a debit to Cash for $576.
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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
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Cash over and short
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350
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Sales
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350
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Cash
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1,000
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Cash over and short
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350
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Sales
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1,350
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Cash
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1,350
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Sales
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1,000
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Cash over and short
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350
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13. The following information is available for Holland Company at December 31:
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Money market fund balance
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$2,860
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Certificate of deposit maturing June 30 of next year
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$22,000
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Postdated checks from customers
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$1,490
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Cash in bank account
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$22,800
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NSF checks from customers returned by bank
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$650
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Cash in petty cash fund
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$210
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Inventory of postage stamps
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$25
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U.S. Treasury bill purchased on December 15 and maturing on
February 28 of following year
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$14,000
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Based on this information, Holland Company should report Cash and Cash Equivalents on December 31 of:
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$49,825
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$49,800
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$38,315
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$39,870
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$39,095
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14. The following information is taken from Hogan Company's December 31 balance sheet:
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Cash and cash equivalents
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$8,500
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Accounts receivable
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70,600
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Merchandise inventories
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60,300
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Prepaid expenses
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4,300
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Accounts payable
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$15,600
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Notes payable
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87,000
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Other current liabilities
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9,300
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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)
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9 days
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42 days
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70 days
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35 days
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10 days
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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):
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31 days.
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8 days.
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1 days.
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93 days.
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32 days.
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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:
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debit to Miscellaneous Expenses for $170.
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credit to Cash for $85.
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debit to Cash Short and Over for $35.
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credit to Petty Cash for $160.
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debit to Cash for $85.
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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:
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debit to Merchandise Inventory of $184.
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credit to Accounts Payable of $9,200.
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credit to Merchandise Inventory of $184.
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debit to Merchandise Inventory of $9,200.
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debit to Merchandise Inventory of $9,016.
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18. The following information is available for Holland Company at December 31:
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Money market fund balance
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$2,890
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Certificate of deposit maturing June 30 of next year
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$24,000
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Postdated checks from customers
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$1,440
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Cash in bank account
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$23,250
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NSF checks from customers returned by bank
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$630
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Cash in petty cash fund
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$210
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Inventory of postage stamps
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$25
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U.S. Treasury bill purchased on December 15 and maturing on
February 28 of following year
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$16,000
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Based on this information, Holland Company should report Cash and Cash Equivalents on December 31 of:
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$42,350
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$40,715
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$52,210
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$43,125
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$52,235
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19. The following information is available for Johnson Manufacturing Company at June 30:
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Cash in bank account
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$8,430
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Inventory of postage stamps
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$72
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Money market fund balance
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$12,600
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Petty cash balance
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$420
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NSF checks from customers returned by bank
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$886
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Postdated checks received from customers
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$396
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Money orders
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$260
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A nine-month certificate of deposit maturing on December 31 of current year
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$8,400
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Based on this information, Johnson Manufacturing Company should report Cash and Cash Equivalents on June 30 of:
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$29,762
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$21,522
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$21,710
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$21,450
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$21,102
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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:
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Accounts Payable............................
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2,156
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Cash.......................................
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2,156
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Accounts Payable............................
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2,200
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Discounts Lost...........................
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44
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Cash.........................................
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2,156
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Accounts Payable............................
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2,200
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Cash.........................................
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2,200
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Accounts Payable............................
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2,200
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Merchandise Inventory................
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44
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Cash.........................................
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2,156
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Accounts Payable...........................
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2,200
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Merchandise Inventory...............
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88
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Cash........................................
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2,112
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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?
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Subtract $47 from the book balance.
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Add $47 to the bank's balance.
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Subtract $47 from the bank's balance and add $47 to the book's balance.
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Subtract $47 from the bank's balance.
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Add $47 to the book balance.
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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:
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credit to Cash for $90.
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debit to Cash Short and Over for $30.
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debit to Cash for $90.
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debit to Miscellaneous Expenses for $180.
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credit to Petty Cash for $170.
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23. A company had $60 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure is to:
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credit Petty Cash for $60.
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credit Cash for $60.
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debit Cash Over and Short for $60.
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credit Cash Over and Short for $60.
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debit Petty Cash for $
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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):
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1 days.
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6 days.
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85 days.
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28 days.
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27 days.
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25. A company had $56 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure is to:
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credit Petty Cash for $56.
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credit Cash Over and Short for $56.
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debit Petty Cash for $56.
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credit Cash for $56.
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debit Cash Over and Short for $56.
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