Question 1

Which of the following correctly describes the effect of a journal entry involving the recording of a sales return?

Accepted Answer

A)   Gross profit decreases.
B)   Net sales increases.
C)  Current assets remain the same.
D)  Net income increases.E) None of the above
F) A) and B)

Question 2

Effective internal control of cash should include the separation of the duties for receiving and disbursing cash.

Accepted Answer

A) True 
 B)False

Question 3

The year-end journal entry to record bad debt expense reduces the accounts receivable account and increases net income.

Accepted Answer

A) True 
 B)False

Question 4

The allowance for doubtful accounts is reported as a contra-asset on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements correctly describes the effect of recording the collection of a $10,000 account receivable for which a 2% sales discount was recorded at the time of collection?

Accepted Answer

A)   Current assets will remain the same.
B)   Gross profit will decrease $200.
C)  Accounts receivable will decrease $9,800.
D)  Net sales will increase $9,800.E) B) and C)
F) A) and B)

Question 6

A company had the following partial list of account balances at year-end:   Sales Returns and Allowances $1,000 Accounts Receivable 38,000 Sales Discounts 2,100 Sales Revenue 95,000 Allowance for Doubtful Accounts 1,200\begin{array}{lr}	ext { Sales Returns and Allowances } & \$ 1,000 \	ext { Accounts Receivable } & 38,000 \	ext { Sales Discounts } & 2,100 \	ext { Sales Revenue } & 95,000 \	ext { Allowance for Doubtful Accounts } & 1,200\end{array} Sales Returns and Allowances  Accounts Receivable  Sales Discounts  Sales Revenue  Allowance for Doubtful Accounts ​$1,00038,0002,10095,0001,200​  How much is net sales revenue?

Accepted Answer

A)   $91,900.
B)   $90,700.
C)  $89,900.
D)  $88,600. E) A) and C)
F) All of the above

Question 7

The year-end journal entry to record bad debt expense reduces current assets and net income.

Accepted Answer

A) True 
 B)False

Question 8

Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works prepared and aging of accounts receivable and estimated that $5,000 of the $98,000 accounts receivable balance would be uncollectible. The allowance for doubtful accounts had a $400 debit balance at year-end prior to adjustment. How much is bad debt expense?

Accepted Answer

A)   $5,000.
B)   $5,400.
C)  $4,600.
D)  $400.E) A) and D)
F) B) and D)

Exam 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash

The year-end journal entry to record bad debt expense reduces the accounts receivable account and increases net income.

Correct Answer
verified

Which of the following correctly describes the effect of a journal entry involving the recording of a sales return?

Correct Answer
verified

Which of the following statements correctly describes the effect of recording the collection of a $10,000 account receivable for which a 2% sales discount was recorded at the time of collection?

Correct Answer
verified

Correct Answer
verified

Effective internal control of cash should include the separation of the duties for receiving and disbursing cash.

Correct Answer
verified

The year-end journal entry to record bad debt expense reduces current assets and net income.

Correct Answer
verified

Correct Answer
verified

The allowance for doubtful accounts is reported as a contra-asset on the balance sheet.

Correct Answer
verified

Exam 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash

The year-end journal entry to record bad debt expense reduces the accounts receivable account and increases net income.

Correct AnswerverifiedShow Answer

Which of the following correctly describes the effect of a journal entry involving the recording of a sales return?

Correct AnswerverifiedShow Answer

Which of the following statements correctly describes the effect of recording the collection of a $10,000 account receivable for which a 2% sales discount was recorded at the time of collection?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Effective internal control of cash should include the separation of the duties for receiving and disbursing cash.

Correct AnswerverifiedShow Answer

The year-end journal entry to record bad debt expense reduces current assets and net income.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The allowance for doubtful accounts is reported as a contra-asset on the balance sheet.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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