1. Cash that is restricted and not available for current operations is reported in the balance sheet as:

a) Equity.

b) Investments and funds.

c) Liabilities.

d) A separate section between liabilities and equity.

2. Loan A has the same original principal, interest rate, and payment amount as Loan B. However, Loan A is structured as an annuity due, while Loan B is structured as an ordinary annuity. The maturity date of Loan A will be.

a) Earlier than Loan B

b) Later than Loan B

c) The same as Loan B

d) Indeterminate with respect to loan B

3. On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash discounts. What entry would Cherokee make on November 10?

a) Accounts receivable 7,840 Sales 7,840

b) Accounts receivable 8,000 Sales 8,000

c) Accounts receivable 7,840

d) Cash discounts 160 Sales 8,000

e) Accounts receivable 8,000 Cash discounts 160 Sales 7,840

4. A note receivable Mild Max Cycles discounted with recourse was dishonored on its maturity date. Mild Max would debit:

a) A loss on dishonored receivable

b) A receivable.

c) Dishonored note expense.

d) Interest expense.

5. Which of the following do not change the balance in Accounts receivable?

a) Returns on credit sales

b) Collections from customer accounts

c) Bad debts expense adjustment

d) Write-offs

Answer rating: 100% (QA)

1 b Investments and funds 2 ... View the full answer