Accounting 2303 Exam 2

What are the two types of fraud?

• Misappropriation of Assets

• Rationalization

• Opportunity

• Fraudulent Financial Reporting

Which of the following is not a component of the fraud triangle?

• Opportunity

• Motive

• Justification

• Rationalization

Which is the following is not a way to circumvent internal controls?

• Collusion

• Human Limitations

• Inadequate Records

• Management Override

When doing a bank reconciliation, which of the following would be a subtraction from the bank side?

• Deposits in Transit

• Outstanding Checks

• Service Charge

• NSF Check

Under the allowance method, the entry to write off an account:

• decreases total assets and stockholders’ equity

• decreases net income

• has no effect on total assets or net income

• increases net income

When using FOB Shipping Point, revenue is recognized at the point of delivery to the customer.

• True

• False

What does 2/10, n/30 stand for?

• 2% discount if pay within 30 days, otherwise due within 10 days.

• 2% discount if pay within 10 days, otherwise due within 30 days.

• 10% discount if pay within 2 days, otherwise due within 30 days.

• 30% discount if pay within 2 days, otherwise due within 10 days.

What does AFDA stand for?

• Allowance for Don's Anniversary

• Allowance for uncollectable accounts

• Allowance for doubtful accounts

• Accounting for doubtful accounts

Which two accounts are involved when recording an adjusting entry for estimating uncollectable accounts?

• Expense

• Liability

• Asset

• Contra-asset

Interest rates are always on a _______ basis.

• Annual

• Monthly

• Whatever the problem tells you

• Daily