Personal Finance Quiz

|b. |attempts to satisfy the costing objectives of both financial accounting and management accounting. |

1. For the year-end December 31, 2007, financial statements, what amount should M record as a liability?

c. The amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed.

Uncollectible accounts expense is estimated by the aging-of-accounts-receivable method. Management estimates that $35,000 of accounts receivable will be uncollectible. Which of the following will be the amount of Uncollectible accounts expense? 35000 -4500 = 30,500

12. Today, you deposit $10,750 in a bank account that pays 3 percent simple interest. How much interest will you earn over the next 7 years?

The person handling cash collections may misappropriate cash and not record the cash sale in accounting records.

a. Is computed by dividing net credit sales for the accounting period by the cash realizable value of accounts receivable on the last day of the accounting period.

C. all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts.

| If a company uses the allowance method of accounting for bad debts, which one of the following statements is true?Answer

Name: ________________________________ Date: _________________ [1]BASIC BANK01 - BAT 003 Which of the following statements is true? A. An asset account is increased by a credit B. An expense account is increase by a credit C. A revenue account is decreased by a credit D. An equity account is decreased by a debit [2]BASIC BANK02 - BAT 010 The Income Summary account contains: A. Total revenues and total expenses for the year B. Total assets and total liabilities at year end C. Total revenues, expenses, assets, and liabilities

The Lawsons’ efficiency ratios are another section the bank will find troubling. The company’s age of payables has nearly tripled over the last four years. This can be detrimental to the company’s image and reliability including their reliability toward the bank if granted the loan. Along with increasing age of payables is increasing age of receivables and age of inventory. Indicating that Mr. Mackay is taking longer to collect his receivables and that he has purchased too much inventory. Too much inventory results can result in further issues

b. Trace the line item “Balance per Bank Statement” – Accuracy and Existence (AU-C 315.A114 a-iii, b-i)

Support: The Company’s revenues increased considerably (19%). However, the Accounts receivables also increased significantly (38%). Increase in revenues are generally associated with a proportional increase in the allowance for doubtful debts. By not reporting a significant ‘allowable for bad debt accounts’, the company is able to overstate its profits and could be a cause for concern in the long run, if the receivables turn out to be bad.

An aging of accounts receivable is completed. It is estimated that $9,150 of the receivables outstanding at year-end will be uncollectible.

Assets in the financial statement are always required and show useful information to investors and understand where the information comes from. For instance, accounts receivable net which the organization does not expect to collect all of the money it is due from all patients and insurers, (Finkler, S.A., Ward, D.M. & Calabrese, I.D., 2013). The bad debts become about of the money due. Furthermore, accounts receivables, net represents gross charges less an allowance for poor debts, and many contractual allowances established with those third party payers. Typically, an example of a bad debt would show charges of a large sum of money delivered from a hospital. Then, the contractual allowances from