Practice Exam (2) ACCT 2301
a. money market accounts.
b. commercial paper.
c. U.S. Treasury bills.
d. long-term investment.
a. Increase collection of receivables.
b. Keep inventory levels low.
c. Pay all liabilities early.
d. Invest idle cash.
a. Cash cannot be combined with cash equivalents.
b. Restricted cash funds may be combined with Cash.
c. Cash is listed first in the current assets section.
d. Restricted cash funds cannot be reported as a current asset.
a. companies may have plenty of sales, but insufficient cash to support operations.
b. the cash to cash operating cycle for a manufacturer is generally shorter than that of a merchandising company.
c. manufacturers may experience a significant lag between the purchase of raw materials and the receipt of cash from customers.
d. companies should have sufficient cash to meet payments but minimize the amount of non-revenue-generating cash on hand.
a. Advance to an employee
b. Refundable income tax
c. Notes receivable
d. Interest receivable
a. a sale is made.
b. an account becomes bad and is written off.
c. management estimates the amount of uncollectibles.
d. a customer’s account becomes past due.
a. affects only balance sheet accounts.
b. affects both balance sheet and income statement accounts.
c. affects only income statement accounts.
d. is not acceptable practice.
a. Goods held on consignment from another company.
b. Goods in transit from another company shipped FOB shipping point.
c. Goods shipped on consignment to another company.
d. All of these answer choices should be included.
a. check the accuracy of the records.
b. determine the amount of wasted raw materials.
c. determine losses due to employee theft.
d. determine ownership of the goods.
a. the fiscal year end.
b. income statement effects.
c. balance sheet effects.
d. tax effects.
a. current replacement cost.
b. original cost.
c. resale value.
d. original cost, less physical deterioration.
a. Sales tax.
b. Truck license.
c. Freight charges.
d. Cost of lettering on side of truck.
a. Excavation fees are capitalized but building permit fees are not.
b. Architect fees are capitalized but building permit fees are not.
c. Interest is capitalized during the construction as part of the cost of the building.
d. The capitalized cost is equal to the contract price to build the plant less any interest on borrowed funds.
a. expensed when incurred.
b. capitalized as a part of the cost of the asset.
c. debited to the Accumulated Depreciation account.
d. not recorded until they become material in amount.
a. decreasing depreciation expense each period.
b. increasing depreciation expense each period.
c. declining percentage rate each period.
d. constant amount of depreciation expense each period.
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