
Financial Statement Reporting
Quiz
•
Business
•
12th Grade
•
Practice Problem
•
Hard
Sonya Vayne
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18 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of providing for doubtful debts?
To ensure that profits are not overstated
To calculate the company's market share
To record the company's investment portfolio
To prepare the cash flow statement
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of making entries for bad and doubtful debts in financial statements?
To ensure that the amount of accounts receivable shown in the Statement of Financial Position is accurate.
To increase the profit figure in the Statement of Profit or Loss.
To record the total amount of goods sold on credit.
To track the inventory levels of the business.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
When is an account typically declared bad?
Immediately after the sale is made.
When the statement of account is sent to the customer.
Before the end of the accounting period.
After the customer fails to settle their account within the next 30 days after being reminded.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens to the profit figure in the Statement of Profit or Loss when an expense for a bad debt is brought to account?
The profit figure increases.
The profit figure remains unchanged.
The profit figure is reduced.
The profit figure is doubled.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of creating a Provision for Doubtful Debts account?
To estimate present accounts receivable that are unlikely to be paid in the next accounting period.
To record the actual amount of debts that have been written off as bad.
To increase the revenue for the current accounting period.
To directly adjust the cash balance to reflect potential losses.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is considered a negative asset account?
Bad and Doubtful Debts
Provision for Doubtful Debts
Profit or Loss Summary
Accounts Receivable Control
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
According to the ageing accounts receivable method, accounts that are over 90 days overdue are:
Written off immediately as bad debts.
Not considered overdue until six months have elapsed.
Considered doubtful and reasonable steps are taken to secure the money.
Automatically transferred to the Profit or Loss Summary account.
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