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Devry ACCT 301 Week 3 Quiz Latest
Quiz 3
1.
Input devices include:
Bar-code readers.
Printers.
Software.
Ledgers.
Information processors.
2.
A company purchased equipment costing $32,000 on credit. Identify the journal the transaction would be recorded in.
Cash disbursements journal.
Sales journal.
Cash receipts journal.
Purchases journal.
General journal.
3.
To be sure that total debits and credits in a columnar journal are equal, before posting we should:
Crossfoot.
Foot.
Journalize.
Post.
Reconcile.
4.
A company purchased $11,200 of merchandise on credit. Identify the journal the transaction would be recorded in.
Cash disbursements journal.
Sales journal.
Cash receipts journal.
Purchases journal.
General journal.
5.
A company borrowed $50,000 from a bank by signing a long-term note payable. Identify the journal the transaction would be recorded in.
Cash disbursements journal.
Sales journal.
Cash receipts journal.
Purchases journal.
General journal.
6.
The segment return on assets:
Can only be determined for international companies.
Reflects the profitability of a segment.
Is difficult to calculate because companies with traded stock are not required to report segment information.
Is calculated as segment average assets divided by segment operating income.
Is calculated as segment sales divided by segment average assets.
7.
All of the following statements regarding internal control procedures are true except:
Internal control procedures are designed to ensure reliable financial reports.
Internal control procedures are designed to safeguards company assets.
Internal control procedures direct operations toward common goals.
Internal control procedures include methods to achieve compliance with laws and regulation.
Internal control procedures are not affected by the cost-benefit principle.
8.
A subsidiary ledger that contains a separate account for each supplier (creditor) to the company is a(n):
Controlling account.
Accounts receivable ledger.
Accounts payable ledger.
General ledger.
Special journal.
9.
When a company uses special journals, the general journal is used for selected transactions and events including:
Recording adjusting transactions.
Posting transactions to special journals.
Accumulating debits and credits.
Collecting detailed listings of amounts.
Recording cash receipts.
10.
A company sold merchandise on credit for $5,000 (cost is $2,400). Identify the journal the transaction would be recorded in.
Cash disbursements journal.
Sales journal.
Cash receipts journal.
Purchases journal.
General journal.
11.
Which of the following events would cause a bank to debit a depositor’s account?
The depositor authorizes the bank to charge the depositor’s account $50 for new checks.
The bank collects a note receivable and related interest on the depositor’s behalf.
The depositor determines there are outstanding checks drawn on the account at month-end.
The depositor determines there are deposits in transit on the account at month-end.
The bank determines it incorrectly charged the depositor’s account twice for the monthly service charge in a previous month.
12.
Internal control policies and procedures have limitations including:
Human error.
Human fraud.
Cost-benefit principle.
Collusion.
All of the options are limitations.
13.
The number of days’ sales uncollected:
Measures how much time is likely to pass before the current amount of accounts receivable is received in cash.
Can be used for comparisons to other companies in the same industry.
Can be used for comparisons between current and prior periods.
Reflects the liquidity of receivables.
All of the options are correct.
14.
The document, also known as the check authorization, that is a checklist of steps necessary for approving an invoice for recording and payment is the
Purchase requisition.
Purchase order.
Invoice.
Receiving report.
Invoice approval.
15.
A seller (or provider) of goods or services to a business organization, usually a manufacturer or wholesaler, is known as a:
Vendor.
Payee.
Vendee.
Creditor.
Debtor.
16.
An expense resulting from failing to take advantage of cash discounts on purchases is called:
Sales discounts.
Trade discounts.
Purchases discounts.
Discounts lost.
Discounts earned.
17.
The Cash Over and Short account:
Is used to record a credit balance in the cash account.
Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and/or from errors in processing petty cash transactions.
Is not necessary in a computerized accounting system.
Can never have a debit balance.
Can never have a credit balance.
18.
An internal control system consists of all of the following policies and procedures except ones designed to:
Protect assets.
Ensure reliable accounting.
Guarantee a return to investors.
Urge adherence to company policies.
Promote efficient operations.
19.
A company’s internal control system:
Eliminates the company’s risk of loss.
Monitors company and employee performance.
Eliminates human error.
Eliminates the need for audits.
Eliminates the need for managers’ certification of controls.
20.
The number of days’ sales uncollected:
Is used to evaluate the liquidity of receivables.
Is calculated by dividing accounts receivable by sales.
Measures a company’s ability to pay its bills on time.
Measures a company’s debt to income.
Is calculated by dividing sales by accounts receivable
21.
The accounting principle that requires financial statements (including notes) to report all relevant information about the operations and financial condition of a company is called:
Relevance.
Full disclosure.
Evaluation.
Materiality.
Matching.
22.
The accounts receivable turnover is calculated by:
Dividing net sales by average accounts receivable.
Dividing net sales by average accounts receivable and multiplying by 365.
Dividing average accounts receivable by net sales.
Dividing average accounts receivable by net sales and multiplying by 365.
Dividing net income by average accounts receivable.
23.
The matching principle prescribes:
That expenses be ignored if their effect on the financial statements is unimportant to users’ business decisions.
The use of the direct write-off method for bad debts.
The use of the allowance method of accounting for bad debts.
That bad debts be disclosed in the financial statements.
That bad debts not be written off.
24.
Pledging receivables:
Allows firms to raise cash.
Allows a firm to retain ownership of its receivables.
Does not transfer risk of bad debts to the lender.
Should be disclosed in the financial statements.
All of the options are correct.
25.
A promissory note received from a customer in exchange for an account receivable:
Is a cash equivalent for the recipient.
Is an account receivable for the recipient.
Is a note receivable for the recipient.
Is a short-term investment for the recipient.
Is a note payable for the recipient.
26.
A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:
Direct write-off method.
Aging of accounts receivable method.
Percentage of sales method.
Aging of investments method.
Percent of accounts receivable method.
27.
The quality of receivables refers to:
The creditworthiness of sellers.
The speed of collection.
The likelihood of collection without loss.
Sales turnover.
The interest rate.
28.
All of the following statements regarding recognition of receivables under U.S. GAAP and IFRS are true except:
U.S. GAAP and IFRS have similar asset criteria that apply to recognition of receivables.
Receivables that arise from revenue-generating activities are subject to broadly similar criteria for U.S. GAAP and IFRS.
The realization principle under IFRS implies an arm’s length transaction occurs.
Both refer to the realization principle and an earnings process.
Differences arise mainly from industry-specific guidance under U.S. GAAP
29.
Failure by a promissory notes’ maker to pay the amount due at maturity is known as:
Protesting a note.
Closing a note.
Dishonoring a note.
Discounting a note.
Depreciating a note.
30.
Accounts receivable information for specific customers is important because it reveals:
How much each customer has purchased on credit.
How much each customer has paid.
How much each customer still owes.
The basis for sending bills to customers.
All of the options are valid reasons.
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