Question

The bank statement shows an ending balance of $34,351. The unadjusted cash account balance per the books was $28,350. Using the below information, what is the true cash balance?

There was a deposit in transit for $4,240

The bank statement reports a service charge of $39

The bank statement shows interest earned of $95

Outstanding checks totaled $10,935

The bank statement included a $750 NSF check deposited this month

Select one:

a. $21,655

b. $27,617

c. $27,656

d. $41,046

Question 22

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Policies and procedures designed to reduce the opportunities for fraud are often called:

Select one:

a. Accounting Principles

b. Asset Source Transactions

c. Internal Controls

d. Financial Systems

Question 23

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Which of the following is a disadvantage of accepting credit cards from retail customers?

Select one:

a. The acceptance of credit cards tends to increase sales.

b. There are fees charged for the privilege of accepting credit cards.

c. The credit card company performs credit worthiness assessments.

d. The credit card company assumes the cost of collections and write-offs.

Question 24

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ABC Company pays $385,000 cash to purchase XYZ, Inc. The fair market value of the assets acquired and liabilities assumed were determined to be $340,000 and $80,000, respectively. Calculate the amount of Goodwill:

Select one:

a. $45,000

b. $85,000

c. $115,000

d. $125,000

Question 25

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A company sold equipment on 9/30/2016.

Straight-Line depreciation = $2000 per year

Capitalized Cost = $16,000

Asset was sold for $5,000

Accumulated Depreciation at 12/31/2015 = 12,000

What is the correct entry to record the sale of the equipment?

Select one:

a.

Cash	$5,000
Accumulated Depreciation	$13,500
Equipment		$16,000
Gain		$2,500

b.

Cash	$5,000
Accumulated Depreciation	$12,000
Equipment		$16,000
Gain		$1,000

c.

Cash	$5,000
Loss	$11,000
Equipment		$16,000

d. None of the above

Answer 1

21
True cash balance = 34351+4240-10935= $27656
22
Internal controls are designed to reduce opportunities for fraud.
23
There are fees charged for the privilege of accepting credit cards.
24
Goodwill = 385000-(340000-80000)= $125000
25
Cash	5000
Accumulated depreciation	13500		=12000+(2000/12*9)
Equipment		16000
Gain		2500