Under U.S. GAAP, bank overdrafts are shown as a liability.

Group of answer choices

True

False

Flag question: Question 2

Question 21.25 pts

An analysis of Co. B's financial statements and records reveals the following three facts: -The Allowance for Uncollectible Accounts increased $3,000 this period. -Bad Debt Expense for the period is $18,000. -There were no collections of accounts that had been previously written off. Therefore, $15,000 of accounts receivable was actually written off during the period.

Group of answer choices

True

False

Flag question: Question 3

Question 31.25 pts

The unadjusted year-end balance in Co. W's Allowance for Uncollectible Accounts is a debit balance. Therefore, Co. W has written off a greater amount of actual bad debts than its previous estimates of bad debts.

Group of answer choices

True

False

Flag question: Question 4

Question 41.25 pts

Under the direct write-off method of accounting for bad debts, the write-off of a specific account has no effect upon net income.

Group of answer choices

True

False

Flag question: Question 5

Question 51.25 pts

A six-month certificate of deposit (CD) that matures in 30 days is a cash equivalent.

Group of answer choices

True

False

Flag question: Question 6

Question 61.25 pts

The percentage-of-sales method of estimating bad debts results in a more accurate valuation of accounts receivable on the balance sheet than the aging method.

Group of answer choices

True

False

Flag question: Question 7

Question 71.25 pts

Sales Discounts Forfeited increases net income.

Group of answer choices

True

False

Flag question: Question 8

Question 81.25 pts

Under the allowance method of accounting for bad debts, the collection of an account that had been previously written off will increase net income.

Group of answer choices

True

False

Flag question: Question 9

Question 91.25 pts

When preparing a bank reconciliation where both the bank and book cash balances are reconciled to the true cash balance, bank service charges are deducted from the book balance.

Group of answer choices

True

False

Flag question: Question 10

Question 101.25 pts

Co. Z. analyzes its year-end accounts receivable and estimates that $5,000 of accounts receivable is uncollectible. Therefore, the adjusted Bad Debt Expense for the period must be $5,000.

Group of answer choices

True

False

Flag question: Question 11

Question 111.25 pts

When preparing a bank reconciliation where both the bank and book cash balances are reconciled to the true cash balance, outstanding checks are deducted from the bank statement balance.

Group of answer choices

True

False

Flag question: Question 12

Question 121.25 pts

When preparing a bank reconciliation where both the bank and book cash balances are reconciled to the true cash balance, adjusting journal entries are required for all reconciling items listed on the reconciliation.

Group of answer choices

True

False

Flag question: Question 13

Question 131.25 pts

Cash held in a bond sinking fund is classified as Cash on the balance sheet.

Group of answer choices

True

False

Flag question: Question 14

Question 141.25 pts

Trade discounts are recorded in a separate account in the books of the seller.

Group of answer choices

True

False

Flag question: Question 15

Question 151.25 pts

Co. Z paid its creditor by check in the correct amount of $79, but recorded the check in error as $97. Therefore Z's cash balance will be UNDERstated by $18 until a correcting entry is made.

Group of answer choices

True

False

Flag question: Question 16

Question 161.25 pts

The account Sales Discounts is used in both the net and gross methods of recording receivables.

Group of answer choices

True

False