ACCT 2130: Chapters 7 & 8

Where would restricted cash appear on the balance sheet?

• Current Asset

• Investment or Other Assets

• Long-term Asset

• Current Liability

Which of the following would be considered a cash equivalent?

• Customer checks waiting to be deposited.

• Treasury bills, purchased on 09/1/2024, mature on 3/30/2025.

• Marketable equity securities.

• Commercial paper, purchased on 12/1/2024, mature on 1/15/2025

Which account do you credit when a customer returns a product that was sold on account?

• Accounts Receivable

• Accounts Payable

• Sales Returns & Allowances

• Purchases Returns & Allowances

What is added to or subtracted from the beginning accounts receivable balance to calculate the ending accounts receivable balance? Select all that apply.

• +Collections

• -Collections

• -Write Offs

• +Credit Sales

Select which accounts you would credit if the customer does not take advantage of the cash discount when using the net method. Check all that apply.

• Accounts Receivable

• Sales Discounts

• Sales Discounts Forfeited

• Cash

Inventory costing $24,000, shipped f.o.b. shipping point from a vendor on December 30, 2024, was received on January 5, 2025. Who should record this on their inventory?

• The customer who will receive the inventory.

• The vendor shipping the inventory.

What is the classification for Allowance for Uncollectible Accounts?

• Current Asset

• Deferred Revenue

• Contra Revenue

• Contra Asset

On November 1, the company agreed to accept a 6-month, $20,000, 10% interest-bearing note. How much interest revenue would be recognized at maturity?

• $333.33

• $1,000

• $21,000

• $666.67

In a periodic inventory system, both sales revenue and cost of goods sold is recorded at the time of the sale.

• True

• False

Important elements of an internal control system for cash disbursements include which of the following? Select all correct answers.

• All disbursements, other than very small disbursements, should be made by check.

• All employees should have the authority to sign checks.

• All expenditures should be authorized before a check is prepared.

• The same person that prepares the check should also record it in the proper journal.