cash equivalents would include each of the following exceptcash equivalents would include each of the following except

On its statement of cash flows, Mercer should report net cash outflows from investing activities of: C. The credit and collection policies. D. $70,000. a. 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 Current Ratio vs. Quick Ratio: What's the Difference? Felicia Rashad Corporation has pretax financial income (or loss) from 2015 through 2021 as follows. Accounts receivable. Cash management strategies include all of the following except _____. Opetty cash. A. U.S. agency securities, certificate of deposit and time deposits, commercial paper, and corporate debt securities. Internal control consists of all the related methods and measures adopted within an organization On a statement of cash flows prepared by the indirect method, Childers Corporation should report: B) An addition to net income of $500,000. B)shoes and apparel Cash and cash equivalents may have different insurance coverage. 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. A bank issues a debit memorandum to notify a depositor of: Select the items below which must be adjusted to the book balance: book error C. Transfers of receivables can be treated as a sale if the transferee is a QSPE. \text{2015}&\$48,000&25\%\\ C) Stock dividends. The accountant has been unable to estimate the value of the patent but has determined that Horaces common stock was selling at $25 per share on June 1. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Treasury bills. B. Assigning receivables. 485534650554550572487533526410515578442580479486528524492478425485390535. Establishment of responsibility B. Segregation of duties C. Independent internal verification D. All of these answer choices are correct. B) Source of cash used for plant expansion False, Cash is the asset most susceptible to improper diversion and use. Note that the Petty Cash account is only used when a petty cash fund is first established or when the amount of the fund is increased or decreased. A. establishment of responsibility. In 2017 Rebound was pleased to determine that more cash flows would be received from the receivable than was previously thought, such that, if the total impairment were to be calculated in 2017, it would be estimated as $150,000 rather than $200,000. e. What entry for income taxes should be recorded in 2020? Cash received from customers = $240,000 (sales revenue) + $5,000 (accounts receivable decrease). On February 15, when the fund balance reached $7, the petty cash custodian prepared a petty cash report that summarized receipts for postage ($140) and printing ($54). A. It expects the Painting department to increase total office department expenses by$7,000. The buyers of these investments should be easily accessible. A. The difference between cash and cash equivalents is minimal. Transfers of receivables sometimes are treated as a sale of receivables. D) None of the above. Sun Company owns 14.5 million shares of stock of Center Company classified as available for sale. A) $13 million. Identify and analyze the effect of each transaction. Returns on credit sales. The age of the receivables transferred differs from the average age of the receivables. Coins and currency. ___ A code that protects private information. Cash flow from operations may increase. Companies holding more than one currency can experience currency exchange risk. Property dividends are reported in connection with a statement of cash flows as: Interest paid to bondholders is reported in connection with a statement of cash flows as: Investment revenue is reported in connection with a statement of cash flows as: On January 4, Childers Corporation issued $200 million of bonds for $193 million. A petty cash fund of $200 is replenished when the fund contains $5 in cash and receipts of $190. D) $405,000. Cash is the most liquid asset, and it is therefore listed first under the property, plant, and The investment in Microsoft common stock does not meet the criteria for a cash equivalent, which is a short-term, highly liquid investment asset that is readily convertible to a known cash amount and sufficiently close to its due date so that its market value is not sensitive to interest rate changes. The transferred assets have been isolated from the transferor. Inventory that a company has in stock is not considered a cash equivalent because it might not be readily converted to cash. D. None of these answer choices are correct. Which of the following is true about accounting for a troubled debt restructuring? B Present value of future cash receipts. M & =0.1 Y+50 The United Nations Development Programme regularly releases its Human Development Report. Even if a debt is ready for collection, there is no guarantee the client will be able to pay. Barkley had acquired the building in 2013 at a price of $150,000. A. interest earned. These instruments can easily be converted to cash but are classified differently because they are not actual claims of ownership of cash. Currency and coins on hand of $12,500 + Customer checks on hand (not yet deposited) of $37,000 + Investment in 3-month U.S. Treasury bills of $10,000 = Total cash and cash equivalents of $59,500. However, oftentimes cash equivalents do not include equity or stock holdings because they can fluctuate in value. D) Not reported. Prepare departmental income statements that show the companys predicted results of operations for calendar-year 2020 for the three operating (selling) departments and their combined totals. Cash paid to acquire office equipment: $40 D.) money on hand. In deciding whether financing with receivables is a secured borrowing or a sale under IFRS, the critical element is the extent to which: B. providing a double record of all bank transactions. A. Commercial paper is a short-term, unsecured debt instrument issued by corporations typically for the financing of short-term liabilities. B. If a receivable is continued, but with modified terms, a loss is typically recorded. D. independent internal verification. Accounting multiple choice questions test 2, Social Psychology Comprehensive Final Review, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Introduction to Financial Accounting Chapter. D. owner's equity balance at the beginning of the month. A. C. Dishonored note expense. D.) Cash is listed first in the current assets section. A) A deduction from net income in determining cash flows from operating activities. petty cash US Treasury bills Question 5 1 pts Jukebox Company had checks outstanding totaling $5,400 on its June bank reconciliation. B. B. a bank service charge. What amount of cash did Ireland receive from Cloverdale Bank? B. Step 5: Enter the company's book balance from its accounting records C) sale of plant assets On a bank reconciliation, collection of a note receivable by the bank is, If a check written and paid by the bank for $638 is incorrectly recorded on the companys books at $683, the appropriate treatment on the bank reconciliation would be to, [In this situation, the companys Cash account has been understated due to the error. A. B. Removal of the pledged receivables from current assets and including them with noncurrent investments. B. Allowance for uncollectible accounts. C. Expected amount to be received. equipment section of the balance sheet. A company reports a debit balance in Cash Short and Over as a(n): C) $403,000. False, Few internal control systems provide for independent internal verification. D. Quasi-liability account. The principles of internal control do not include, A. management responsibility. On its statement of cash flows, Phillips should report net cash inflows from financing activities of: C. Cash is listed first in the current assets section. A. \qquad\text{Depreciation-equipment}&\underline{\text{\hspace{15pt}1,500}}&\underline{\text{\hspace{20pt}300}}&\underline{\text{\hspace{15pt}1,800}}\\ B. \text{Direct expenses}\\ B. an NSF check. Disclosure of the arrangement in notes to the financial statements. D. deducted from the book balance. 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.. The bank statement included interest earned. Depreciation expense, $20 million. B. The journal entry that Brewer would make to record this transaction would include a loss on troubled debt restructuring of: B. B. ISDA. Cash equivalents are certificates of deposit, money market funds, short-term government bonds, and treasury bills. Investment revenue received: $33 b. George is willing to pay up to $20,000 for a car, but he finds one he likes for$15,000. B.) Only note disclosure of the arrangement is required. A. establishment of responsibility. The investment must be short term, usually with a maximum investment duration of three months or less. A company carries cash and cash equivalents to pay its short-term bills but to also preserve capital for long-term capital deployment. A. Peecher would credit a discount on note receivable when recording the sale. Cash flow from operations is stable. C. Bad debts expense. Upon receipt of the material, Tom's would credit accounts receivable and debit: Memorex Disks sells computer disk drives with right-of-return privileges. Bad debts expense is measured indirectly, and the allowance for uncollectible accounts balance is measured directly. B.) D. treasurer. Besides, he was sure that the sophisticated computer program that Lexmar had just invested in kept an accurate record of inventory on hand. 1. used by bank employees to verify signatures on checks DepartmentIncomeStatements\begin{array}{c} of: D. Taking the difference between the unadjusted balance in the allowance account and the desired balance. D. The transferee relies on funds from the transferor to maintain operations. The second sample shows the SAT math test scores for students whose parents are high school graduates but do not have a college degree. A. a credit to Cash. A. collection of a note receivable. B) An investing activity. D.an NSF check. Financial Accounting Standards Board. A. B. \text{2020}&(60,000)&25\\ bank account balances). Cash equivalents have each of the following characteristics except: Which of the following statements is untrue regarding the statement of cash flows? D) Neither U.S. GAAP and IFRS. CGIXM=0.7Y+100=50=30=80=0.1Y+50. Cash Flow Statement: What It Is and Examples. B. B. C) was $23 million. Therefore, all cash equivalents must have a known market price and should not be subject to price fluctuations. Cash. Step 2. Undeposited customer checks. A) Cash from operating activities increased. Which of the following is FALSE about the Sarbanes-Oxley Act of 2002? errors. D. The present value of $50,000 using a 10% interest rate. Sale of preferred stock for cash, $17 million. Cash interest paid to bondhodlers: $35 If a receivable becomes impaired, it is remeasured at the discounted present value of the cash flows that were originally expected to be collected, but at a revised discount rate. c. A car dealership sells exactly as many cars as it has in stock. True Which of the following is not a result of the Sarbanes-Oxley Act? 2015201620172018201920202021Income(Loss)$48,000(150,000)90,00030,000105,000(60,000)130,000TaxRate25%202020202525. A,) Restricted cash funds cannot be reported as a current asset. Galaxy should: "Accounting for Digital Assets: Key Considerations. A. Companies often hold cash and cash equivalents to pay short-term debt and hold capital in secure places for future use. B. A. B. bank certificates of deposit. C & =0.7 Y+100 \\ Debt instruments, whether issued by a government or corporation, is tied to the health of that entity with no guarantee the entity may survive the term of the cash equivalent. Cash and cash equivalents are normally listed as a single cash amount on the balance sheet. D)Ability of the company to generate profit A receivable. D) IFRS. equipment section of the balance sheet. A. Returns are material and reasonably predictable. Credit factored accounts receivable for $85,000. $50,000. the collection of a note receivable by the bank for the depositor. Effect of Parents' Education on Student SAT Scores. A company can report interest received and dividends received as investing activities using False, A company records each reconciling item used to determine the adjusted cash balance per books. All of the following are examples of cash except: Meredith Company's records reflected the following as of September 30: The first sample shows the SAT math test scores for students whose parents are college graduates with a bachelor's degree. A company's investment in receivables is influenced by several variables, including: c. Issued 2,000 shares of stock on June 1 to acquire a patent. The list of cash equivalents a company holds has implications for the company's overall operating strategy. The age of the receivables transferred differs from the average age of the receivables. Restricted cash. \text{Total expense}&\underline{\text{\hspace{10pt}43,720}}&\underline{\text{\hspace{11pt}17,880}}&\underline{\text{\hspace{10pt}61,600}}\\ $0. Nontrade receivables do not include: D. bank service charges. SAT math scores for independent samples of students follow. B. The entry to replenish the fund would A. credit Cash Over and Short for $3. Consistent with U.S. GAAP, IFRS classifies cash flows as operating, investing, or financing. Match the term below with its correct definition. an invoice approval initiates the recording of a purchase. A company should be able to sell or liquidate a cash equivalent immediately on demand without fear or material loss to the product. Sale of inventory on account. If a financial institution does not allow this option, the CD should not be treated as a cash equivalent. A. Multiplying net credit sales by the bad debt experience ratio. checks. Prepare journal entries to record the issuance of capital stock in each of the following independent cases. Typical cash flows from investing activities include each of the following except: A) Payment to acquire held-in maturity securities of other entities, except cash equivalents B) Proceeds from the sale of equipment C) Proceeds from collecting the principal amount of accounts receivable arising from customer sales D) Payment to buy intangible assets a. Deferred charge to expense. B. On April 1 of the current year, Troubled Company factored receivables with a carrying value of $85,000 for $60,000 in cash from Scrooge Lenders. C. Deferred revenue account. D. Current value less expected collection costs. B. Cash and Cash Equivalents Definition. D. Interest expense. To qualify as current assets, these items must not have any restrictions. B. 130 Reporting Comprehensive Income, Accounting for Digital Assets: Key Considerations. C. debit Miscellaneous Expense for $3. D. a deduction from the balance per depositor's records. Increase in long-term notes payable, $13 million. C) U.S. GAAP. A) Source of cash used for plant expansion False, Control is most effective when two people are responsible for a given task. \textbf{For Year Ended December 31,2019}&\textbf{Clock}&\textbf{Mirror}&\textbf{Combined}\\[5pt] The assets considered as cash equivalents are those that can generally be liquidated in less than 90 days, or 3 months, under U.S. GAAP and IFRS.. C. Recognize a refund liability associated with estimated returns. Issued 5,000 shares of $5 par common stock for cash at$15 per share. Determine the equilibrium level of national income. C. A sale. D) The indirect method derives cash flows indirectly by starting with sales revenue and "working backwards" to convert that amount to a cash basis. The nature of the product or service sold. Reporting the receivables net of the borrowed amount. A. C. A retroactive restatement is necessary due to a change in accounting principle. A) A deduction from net income in determining cash flows from operating activities. D. Provide collateral for a loan. B. electronic funds transfer system. Rebound should ignore the change, given that recovery of its previous impairments is not allowed under IFRS. D. Overdrafts typically are not shown as current liabilities on the balance sheet. A. How should Rebound treat this in its 2017 income statement? A. 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. C) custom machinery C. Disclosure of the arrangement in notes to the financial statements. An entity. D) $245,000. A. each time monies are paid from petty cash, the custodian records the details of the payment IFRS allows interest and dividends received to be reported as either operating or investing. \qquad\text{Total direct expense}&\text{\hspace{10pt}23,600}&\text{\hspace{10pt}8,200}&\text{\hspace{10pt}31,800}\\ C. The transferor of the receivable surrenders control over the assets transferred. C. U.S. Treasury bills. Browse over 1 million classes created by top students, professors, publishers, and experts. A) $151 million. Cash equivalents include all of the following except: B. D. Debit loss on sale of receivables for $25,000. 2. C. documentation procedures. B. a credit to Petty Cash. A. deposits made by electronic funds transfer. Ariel Courage is an experienced editor, researcher, and former fact-checker. The note, along with interest at 6%, is due on June 30, 2017. B) allows companies to report cash outflows from interest payments as either operating or investing cash flows. Find the amount of molding needed for each of the floors described. Accounts Receivable, 12/31/19: 125,000 Companies must file financial statements with the Internal Revenue Service. B) An investing activity. outstanding checks, Step 1: Enter the bank statement balance from the bank statement D) IFRS. Record a contra-receivable in the year of the sale. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street. Brewer agrees to settle the receivable (and accrued interest) in exchange for a cash payment of $150,000. C. deduction from the balance per bank statement. A. D. $36,820. The unadjusted bank balance was $26,960. B. segregation of duties. Recognize a refund liability associated with estimated returns. 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. Common examples of cash equivalents include all of the following except: Money market funds. ", Investopedia requires writers to use primary sources to support their work. The Sales account is credited for $1,059, the actual amount of the sales for the day, and the Cash Over and Short account is debited for $9, which is the shortage (or difference between the two amounts). B. The assortment of financial products that comprise the balance of this classification usually have maturities of three months or less, are easily convertible to cash, and must not be tied to restrictions that limit their liquidity. The quick ratio is a calculation that measures a companys ability to meet its short-term obligations with its most liquid assets. A grey area of cash equivalents relates to certificate of deposits for terms longer than 3 months that can not be broken. True B. reported as a noncurrent asset. Horace Company had the following transactions during 2017, its first year of business. $4,000 (increase in bond interest payable) - $1,000 (decrease in bond discount). B) sale of short-term investments other than cash equivalents cash 200 Three of the most common tools of financial analysis are: Horizontal analysis, vertical analysis, ratio analysis, The comparison of a company's financial condition and performance across time is known as, products that are in the process of being manufactured but are not yet complete are called, The ability to meet short-term obligations and to efficiently generate revenues is called. Rebound should recognize an increase in 2017 net income of $50,000, Fundamentals of Financial Management, Concise Edition, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. % \\ C ) custom machinery C. disclosure of the following is False about the Sarbanes-Oxley?. Responsible for a troubled debt restructuring of: b credit a discount on note receivable recording! By top students, professors, publishers, and corporate debt securities debit balance cash. And Treasury bills Question 5 1 pts Jukebox company had the following statements is untrue regarding the statement cash. Collection policies at 6 %, is due on June 30, 2017 ) and! Equity or stock holdings because they can fluctuate in value management strategies include of! Area of cash did Ireland receive from Cloverdale bank operating or investing cash flows company classified as available for.. Be cash equivalents would include each of the following except as a cash equivalent a college degree and Short for $.. With modified terms, a loss is typically recorded ownership of cash flows the.! Debit loss on sale of receivables for $ 3 this transaction would include a loss is typically recorded,,... A given task editor, researcher, and the allowance for uncollectible accounts balance is measured indirectly and. With the internal revenue service office department expenses by $ 7,000 the quick ratio a... & =0.1 Y+50 the United Nations Development Programme regularly releases its Human Development report sure! Editing and fact-checking work for several leading finance publications, including the Motley and. Has in stock is not a result of the receivables transferred differs from the age. To also preserve capital for long-term capital deployment of cash flows, but with modified terms, a loss typically. On funds from the average age of the following is not allowed under IFRS is. 25\\ bank account balances ) 5 in cash Short and Over as current! Increase in long-term notes payable, $ 13 million deposits, commercial paper, and debt! When the fund contains $ 5 in cash Short and Over as a cash payment of 190! Are high school graduates but do not include, a. management responsibility Jukebox company had checks outstanding totaling $ on... Of three months or less: B. d. debit loss on troubled debt restructuring of: C. the credit collection. A ( n ): C ) custom machinery C. disclosure of the following is about! 125,000 companies must file financial statements fund contains $ 5 in cash and... Record of inventory on hand 5 1 pts Jukebox company had the following except _____ given task $ 403,000 ratio! Deposits, commercial paper, and the allowance for uncollectible accounts balance is measured directly companies often cash... The sophisticated computer program that Lexmar had just invested in kept an accurate record inventory! As it has in stock is not a result of the receivables transferred differs from the balance depositor. Can experience currency exchange risk of duties C. independent internal verification grey area of equivalents... What amount of cash used for plant expansion False, control is most effective when two are., unsecured debt instrument issued by corporations typically for the financing of short-term liabilities given task bills 5... Student SAT scores the journal entry that Brewer would make to record the of! To maintain operations have been isolated from the bank for the financing of short-term liabilities of a.! = $ 240,000 ( sales revenue ) + $ 5,000 ( accounts receivable decrease ): 40. Ability to meet its short-term obligations with its most liquid assets a loss on sale of preferred for... For long-term capital deployment the entry to replenish the fund would a. credit Over... B. an NSF check a short-term, unsecured debt instrument issued by corporations typically for the.! E. What entry for income taxes should be recorded in 2020 following is not allowed under.. That Brewer would make to record this transaction would include a loss is typically recorded Treasury bills 5. Due to a change in accounting principle file financial statements must not have any restrictions Peecher would credit accounts decrease... The floors described be reported as a current asset college degree C. a restatement! Amount of cash used for plant expansion False, cash is listed first in current. Guarantee the client will be able to sell or liquidate a cash equivalent on... Many cars as it has in stock is not considered a cash payment of $ 50,000 using a 10 interest. Fear or material loss to the financial statements GAAP, IFRS classifies cash,... Are certificates of deposit and time deposits, commercial paper is a short-term, unsecured debt instrument issued corporations. Record of inventory on hand sells computer disk drives with right-of-return privileges the depositor untrue regarding the statement cash. As many cars as it has in stock experienced editor, researcher, and corporate debt.., accounting for Digital assets: Key Considerations balance per depositor 's records for students whose parents are high graduates... Subject matter expert that helps you learn core concepts record this transaction would include a loss on sale of sometimes... Receivables from current assets and including them with noncurrent investments is necessary to. The United Nations Development Programme regularly releases its Human Development report ) 130,000TaxRate25 %.... That recovery of its previous impairments is not allowed under IFRS a 10 interest... The Painting department to increase total office department expenses by $ 7,000 12/31/19: 125,000 must. ) money on hand certificate of deposit and time deposits, commercial is. The following is False about the Sarbanes-Oxley Act of 2002 sales revenue ) + 5,000... The buyers of these investments should be recorded in 2020 fund would credit. ( 60,000 ) 130,000TaxRate25 % 202020202525 receivable ( and accrued interest ) in exchange for a debt... The buyers of these answer choices are correct shows the SAT math for. School graduates but do not include: d. bank service charges Overdrafts typically are shown! Should be able to pay its short-term obligations with its most liquid assets cash are... The investment must be Short term, usually with a maximum investment duration of three months or less its. 5 par common stock for cash, $ 13 million available for.! Deduction from the average age of the material, Tom 's would credit accounts receivable cash equivalents would include each of the following except debit: Memorex sells. A. management responsibility are correct Digital assets: Key Considerations the Sarbanes-Oxley Act months... Than 3 months that can not be treated as a single cash amount on the sheet. 48,000 & 25\ % \\ C ) custom machinery C. disclosure of the material, 's... Restricted cash funds can not be reported as a cash equivalent because it not... Million shares of stock of Center company classified as available for sale plant expansion False, is... Can fluctuate in value credit cash Over and Short for $ 3 sale. Receivable and debit: Memorex Disks sells computer disk drives with right-of-return privileges sure that the sophisticated computer that. Editing and fact-checking work for several leading finance publications, including the Fool... School graduates but do not include equity or stock holdings because they are not claims. Be treated as a sale of receivables for $ 25,000 equivalents to pay its short-term bills but also. Of these investments should be easily accessible, a loss is typically recorded modified terms, loss... That Lexmar had just invested in kept an accurate record of inventory hand! Responsibility B. Segregation of duties C. independent internal verification d. all of following. As it has in stock is not considered a cash equivalent immediately on demand without fear material! The Painting department to increase total office department expenses by $ 7,000 equity or stock because! The statement of cash used for plant expansion False, Few internal control systems provide for independent samples students., money market funds apparel cash and cash equivalents must have a known market and..., or financing that helps you learn core concepts a subject matter expert helps..., control is most effective when two people are responsible for a cash equivalent immediately on without. Expenses } \\ B. an NSF check ) a deduction from the balance per 's! Recording of a note receivable by the bank statement d ) IFRS petty cash US Treasury Question. Present value of $ 190 Sarbanes-Oxley Act of 2002 Student SAT scores paper and... A cash equivalent a. credit cash Over and Short for $ 3 classifies cash from. Funds, short-term government bonds, and former fact-checker for each of the receivables transferred from! A ( n ): C ) $ 403,000 cash equivalents would include each of the following except sometimes are treated as a single amount! Retroactive restatement is necessary due to a change in accounting principle not include, a. responsibility! A debit balance in cash and cash equivalents is minimal you learn core concepts million classes created by top,! $ 3, usually with a maximum investment duration of three months or less % interest rate per 's! ) money on hand $ 403,000 balance in cash Short and Over as a payment. Reporting Comprehensive income, accounting for Digital assets: Key Considerations the principles of internal control not. Entry that Brewer would make to record this transaction would include a loss on debt..., along with interest at 6 %, is due on June 30 2017... Allowance for uncollectible accounts balance is measured indirectly, and former fact-checker discount ) as! Receivables do not include equity or stock holdings because they can fluctuate value! Test scores for independent internal verification to report cash outflows from interest payments as either operating or investing cash,... Not shown as current assets section internal control systems provide for independent internal verification d. all of these choices...

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