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University of Nueva Caceres

College of Business and Accountancy


J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer for each item by
shading the box corresponding to the letter of your choice on the answer sheet provided. STRICTLY NO ERASURES
ALLOWED. Use pencil no. 2 only

1. Tohka Company revealed the following information on December 31, 2019:

Cash in checking account P350,000


Cash in money market account 750,000
Treasury bill purchased 11/01/19
maturing 01/31/20 (3 months) 3,500,000
Treasury bond purchased 12/01/19
maturing March 31, 2020 (4 months) 4,000,000

What amount should be reported as cash and cash equivalents on December 31, 2019?
a. 1,100,000
b. 3,850,000
c. 4,600,000
d. 8,600,000

Cash in Checking Account P350,000


Cash in money market account 750,000
Treasury Bill 3,500,000
Cash and Cash Equivalents 4,600,000

2. Aizen Company provided the following information at year-end comprising the cash account:

Cash in bank – demand deposit 5,000,000


Cash on hand 400,000
Postage stamps unused 5,000
Certificate of time deposit 1,500,000
Money Order 50,000
Manager’s Check 100,000
Traveler’s Check 1,000,000
Postdated customer’s check 500,000

What total amount should be reported as cash at year end?


a. 8,050,000
b. 7,050,000
c. 6,550,000
d. 6,450,000
Cash in Bank – Demand Deposit 5,000,000
Cash on Hand 400,000
Money Order 50,000
Manager’s Check 100,000
Traveler’s Check 1,000,000
Total Cash 6,500,000
3. Which is not considered a cash equivalent?
a. A three-year treasury note maturing on May 30 of the current year purchased by the entity on April 15 of
the current year.
b. A three-year treasury note maturing on May 30 of the current year purchased by the entity on
January 15 of the current year (purchased 5 months before maturity)
c. A 90-day Treasury bill
d. A 60-day money market placement
4. At the end of the current year, an entity had various checks and papers in its safe. Which item should not be include
in its cash account in the current year-end statement of financial position?
a. US $20,000 (Cash)
b. Past due promissory note issued in favor of the entity by its president (Receivable)
c. Another entity’s P150,000 check payable to the entity dated December 15 of the current year. (Cash)
d. The entity’s undelivered check payable to a supplier dated December 31 of the current year. (Cash)
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

5. Which of the following statements in relation to petty cash is incorrect?


a. The imprest petty cash system in effect adheres to the rule of disbursement by check.
b. Entries are made to the Petty Cash account only to increase or decrease the size of the fund or to adjust
the balance if not replenished at year-end.
c. The petty cash account is debited when the fund is replenished (Expense accounts are debited
when the fund is replenished)
d. The petty cash fund is reported as part of current assets.

6. Teach Company provided the following data on December 31, 2019:

Checkbook balance 4,000,000


Bank statement balance 5,000,000
Check drawn on Teach’s account, payable to supplier
Dated and recorded on December 31, 2019 but not mailed until
January 31, 2020 500,000
Cash in Sinking Fund 2,000,000

On December 31, 2019, what amount should be reported as cash under current assets?
a. 4,500,000
b. 5,500,000
c. 3,500,000
d. 6,500,000
Checkbook Balance 4,000,000
Undelivered Check 500,000
Total Cash 4,500,000
7. At the end of the current year, an entity had cash accounts at three banks. One account is segregated solely for
payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The third account,
used for regular corporate operations, as a positive balance. How should these accounts be reported?
a. The segregated account should be reported as a noncurrent asset, the regular account should be
reported as a current asset, and the overdraft should be reported as a current liability.
b. The segregated and regular accounts should be reported as current assets, and the overdraft should be
reported as a current liability.
c. The segregated account should be reported as a noncurrent asset, and the regular account should be
reported as a current asset net of overdraft.
d. The segregated and regular accounts should be reported as current assets net of the overdraft.
Bond Sinking Fund – Noncurrent Asset
Bank Overdraft – Current Liability (three different banks)
Regular Corporate operations – Current Asset
8. Joestar Company had the following account balances on December 31, 2019:

Petty Cash Fund 50,000


Cash on hand 500,000
Cash in Bank – Current account 4,000,000
Cash in Bank – Payroll account 1,000,000
Time deposit 2,000,000
Cash in Bank – restricted account for plant addition,
Expected to be disbursed in early 2020 (Current Asset
- Short-term investment) 500,000
Cash in sinking fund set aside for bond payable due
June 30, 2020 (Noncurrent Asset) 1,500,000

The petty cash fund included unreplenished December 2019 petty cash expense vouchers of P5,000 and employee
IOU of P5,000. (Deduct unpaid vouchers and employee IOU)

The cash on hand included a P100,000 check payable to the entity dated January 31, 2020. (Postdated Check –
not included)

What total amount should be reported as cash and cash equivalents on December 31, 2019?
a. P6,940,000
b. P8,940,000
c. P7,940,000
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

d. P7,440,000

Petty Cash Fund 40,000


Cash on Hand 400,000
Cash in Bank – Current Account 4,000,000
Cash in Bank – Payroll Account 2,000,000
Time Deposit 1,000,000
Total Cash and Cash Equivalents 7,440,000

Acnologia Company had a checkbook balance on December 31, 2019 on P8,000,000 and held the following items
in the safe:

Check payable to Acnologia, dated January 5, 2020, included


In December 31 checkbook balance 2,000,000

Check payable to Acnologia, deposited December 20, and included


in December 31 checkbook balance, but returned by bank on
December 30, stamped “NSF”. The check was redeposited January
2, 2020, and cleared January 3, 2020 500,000

Check drawn on Acnologia’s account and payable to a vendor, dated


And recorded December 31 but not mailed until January 15, 2020 1,500,000

Cash on hand – undeposited collections 400,000


Change fund 40,000
Time deposit for plant expansion 1,000,000
Treasury bill 2,500,000
Money market placement 3,000,000
Postage stamps unused 10,000

9. What total amount should be reported as cash on December 31, 2019?


a. 7,400,000
b. 7,440,000
c. 8,440,000
d. 7,450,000
Cash in Bank (8,000,000 – 2,000,000 – 500,000 + 1,500,000) 7,000,000
Cash on Hand 400,000
Change Fund 40,000
Total Cash 7,440,000
10. What total amount should be reported as cash equivalents on December 31, 2019?
a. 6,500,000
b. 3,000,000
c. 5,500,000
d. 2,500,000
Treasury Bill 2,500,000
Money Market Placement 3,000,000
Total Cash Equivalents 5,500,000
11. What is the major purpose of petty cash fund?
a. To effectively plan cash inflows and outflows
b. To ease the payment of cash to vendors
c. To determine the honesty of the petty cashier
d. To effectively control cash disbursements
12. On December 31, 2019, Laxus Company had the following cash balances:

Cash in bank – current account 6,000,000


Petty cash fund (all funds were reimbursed at year-end) 50,000
Time deposit – three months, due January 15, 2020 2,500,000
Savings deposit 1,000,000
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

Cash in bank included P400,000 of compensating balance against short term borrowing arrangement.

The compensating balance is legally restricted as to withdrawal.

What total amount should be reported as cash and cash equivalents?


a. 9,500,000
b. 9,150,000
c. 9,100,000
d. 6,950,000
Cash in Bank – Current Account (6,000,000-400,000) 5,600,000
Petty Cash Fund 50,000
Time Deposit 2,500,000
Savings Deposit 1,000,000
Total Cash and Cash Equivalents 9,150,000
13. In an audit of Selena Company on December 31, 2019, the following information is gathered:
Balance per book 6,700,000
Customer’s NSF check 200,000
Depositor’s note charged to account 650,000
Customer’s note collected by bank 120,000
Outstanding checks 800,000
Checkbook printing charge 2,000
Certified checks included in the outstanding checks 100,000
Deposit in transit 1,200,000
Interest earned on deposits net of 20% final tax 32,000
The adjusted cash in bank of Selena Company on December 31, 2019 is
a. 6,050,000 b. 6,700,000 c. 6,000,000 d. 5,300,000
Balance per Book 6,700,000
Customer’s Note collected by bank 120,000
NSF Check (200,000)
Depositor’s note charged to account (650,000)
Checkbook printing charge (2,000)
Interest, net of tax 32,000
Adjusted Cash in Bank 6,000,000

Erza Company reported the following information at the end of the current year
• Investment securities of P1,000,000. These securities are share investments in entities that are traded in
the Philippine Stock Exchange. As a result, the shares are very actively traded in the market. (Short-Term
Investment)
• Investment securities of P2,000,000. These securities are government treasury bills.

The treasury bills have a 10-year term and purchased on December 31 at which time they had two months
to go until they mature. (Cash Equivalent)
• Cash of P3,400,000 in the form of coin, currency, savings account and checking account. (Cash)
• Investment securities of P1,500,000. These securities are commercial papers or money market placements.

The term of the commercial papers is nine months and the instruments were purchased on December 31
at which time they had three months to go until they mature. (Cash Equivalent)

14. What total amount should be reported as cash at the end of current year?
a. 3,400,000
b. 5,400,000
c. 4,900,000
d. 6,900,000
15. What total amount should be reported as cash equivalents at the end of current year?
a. 3,500,000
b. 4,500,000
c. 1,500,000
d. 2,500,000
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

16. Mariejois Company established a petty cash fund of P50,000 with the following information:

Coins and currency 22,000


Petty cash vouchers:
Gasoline 3,000
Medical Supplies 1,000
Repairs 1,500
IOU from employee 3,500
Check drawn payable to the order of Akainu,
Petty cash custodian, representing his salary 15,000
Check of an employee returned by bank marked “NSF” 3,000
A sheet of paper with the names of several employees
Together with a contribution for a birthday party and attached
To the sheet of paper is a currency of 5,000

What amount of petty cash fund should be reported?


a. 42,000
b. 27,000
c. 37,000
d. 22,000
Coins and Currency 22,000
Check payable to the order of petty cash custodian 15,000
Petty Cash Fund 37,000
17. In preparing a bank reconciliation, outstanding checks are
a. added to the balance per bank.
b. deducted from the balance per books.
c. added to the balance per books.
d. deducted from the balance per bank
Luffy Company reported the following information in relation to cash on December 31, 2019:
• Checkbook balance, P4,000,000
• Undeposited collections, P400,000
• A customer check amounting to P200,000 dated January 2, 2020 was included in the December 31, 2019
checkbook balance.
• Another customer check for P500,000 deposited on December 22, 2019 was included in the checkbook
balance but returned by the bank for insufficiency of fund.

This check was redeposited on December 26, 2019 and cleared two days later. (No AJE)

• A P400,000 check payable to supplier dated and recorded on December 30, 2019 was mailed on January
16, 2020.
• A petty cash fund of P50,000 comprised the following on December 31, 2019:
Coins and currencies 5,000
Petty cash vouchers 40,000
Refundable deposit for returnable containers 5,000
50,000
• A check payable of P40,000 was drawn on December 31, 2019 payable to petty cash.

18. What is the adjusted cash in bank on December 31, 2019?


a. 4,600,000
b. 4,200,000
c. 4,400,000
d. 3,700,000
Checkbook Balance 4,000,000
Postdated Check (200,000)
Undelivered Check 400,000
Adjusted Cash in Bank 4,200,000
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

19. What total amount should be reported as cash on December 31, 2019?
a. 4,645,000
b. 4,845,000
c. 4,600,000
d. 4,650,000
Cash on Hand 400,000
Cash in Bank 4,200,000
Petty Cash Fund 45,000
Total Cash 4,645,000
20. If a check correctly written and paid by the bank for P448 is incorrectly recorded on the company's books for P484,
the appropriate treatment on the bank reconciliation would be to
a. add P36 to the bank's balance.
b. add P36 to the book's balance.
c. deduct P36 from the bank's balance.
d. deduct P448 from the book's balance.

21. Notification by the bank that a deposited customer check was returned NSF requires that the company make the
following adjusting entry:

a. Accounts Receivable

Cash

b. Cash
Accounts Receivable

c. Miscellaneous Expense
Accounts Receivable

e. No adjusting entry is necessary

22. Jessa Company had checks outstanding totaling P5,400 on its June bank reconciliation. In July, Jessa Company
issued checks totaling P38,900. The July bank statement shows that P26,300 in checks cleared the bank in July.
A check from one of Jessa Company's customers in the amount of P300 was also returned marked "NSF." The
amount of outstanding checks on Jessa Company's July bank reconciliation should be
a. P12,600.
b. P18,000.
c. P17,700.
d. P7,200.

Outstanding Checks, beg. 5,400


Checks issued (38,900-300) 38,600
Checks cleared (26,300)
Outstanding Checks, end 17,700
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

23. Gintoki Company gathered the following reconciling information in preparing its July bank reconciliation:
Cash balance per books, 7/31 P4,500
Deposits-in-transit 150
Notes receivable and interest collected by bank 850
Bank charge for check printing 20
Outstanding checks 2,000
NSF check 170
The adjusted cash balance per books on July 31 is
a. P5,160.
b. P5,010.
c. P3,310.
d. P3,460.
Unadjusted Cash per books P4,500
Note receivable and interest collected by bank 850
Bank Charge (20)
NSF Check (170)
Adjusted Cash per books P5,160
24. Ymir Company developed the following reconciling information in preparing its September bank reconciliation:
Cash balance per bank, 9/30 P11,000
Note receivable collected by bank 4,000
Outstanding checks 6,000
Deposits-in-transit 3,000
Bank service charge 50
NSF check 800
Determine the cash balance per books (before adjustments) for Yenn Company.
a. P8,850.
b. P14,000.
c. P4,850.
d. P11,000.
Cash per Bank 11,000
Deposits In Transit 3,000
Bank Service Charge 50
NSF check 800
Outstanding checks (6,000)
Note receivable collected by bank (4,000)
Cash per Books 4,850

On October 7, 2019, the cash book of Dendi Company showed the following entries:
Receipts Checks
September 30 (overdraft) P 0 P5,000
October 1 Tuesday 1,200 1,600
2 Wednesday 3,000 2,400
3 Thursday 800 1,000
4 Friday 6,000 3,400
5 Saturday 4,000 2,500
Cash receipts are deposited at the beginning of every Monday, Wednesday and Friday and in each case includes the
receipts of the preceding two working days. The bank statement at the close of October 5 showed:
Balance, September 30 – overdraft P6,500
Deposits 7,000
Checks (includes all checks issued prior to October 4
and also a check for P300 belonging to Cendi
Co., erroneously charged to Dendi account 5,800
A check for P256 issued on October 5 had been canceled
by the company but the bookkeeper has not made
any entry for this.
Additional information: undeposited collections – October 31, P10,000; outstanding checks – October 31, P5,644.

25. The book balance as at October 5, 2019 should be:


University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

a (P900) b (P3,900) c P1,100 d P1,200


Beg. Bal. (5,000)
Receipts 15,000
Checks (10,900)
(900)
26. The bank balance as at October 5, 2019 should be:
a (P3,900) b (P5,300) c P1,200 d P1,100
Beg. Bal. (6,500)
Deposits 7,000
Checks (5,800)
(5,300)
27. The undeposited collections as at September 30, 2004 should be:
a P4,000 b P3,000 c P2,000 d P1,000
Undeposited Collections, beg. 2,000
Book Receipts 15,000
Bank Receipts (7,000)
Undeposited Collections, end. 10,000
28. The outstanding checks as at September 30, 2004 should be:
a P200 b P300 c P400 d P500
Outstanding Checks, beg. 500
Checks issued (10,900-256) 10,644
Checks cleared (5,800-300) (5,500)
Outstanding Checks, end. 5,644
29. The adjusted book and bank balances as at October 5, 2004 should be:
a P5,644 b P644 c P1,144 d P344
Balance per Book (900) Balance per Bank (5,300)
Cancelled Check 256 Deposit in Transit 10,000
Adjusted balance per book (644) Outstanding Check (5,644)
Bank Error 300
Adjusted balance per bank (644)
30. The balance sheet of Happy Company as of December 31, 2019 showed a cash balance of P68,225, which was
determined to consist of the following:

Petty cash fund P 360


Cash in Metro, per bank statement, with a
check for P600 still outstanding 33,675
Notes receivable in the possession of a
collecting agency 2,500
Undeposited receipts, including a postdated
check for P1,050 and a traveler’s
check for P1,000 17,800
Bond sinking fund – cash 12,750
IOUs signed by employees 495
Paid vouchers, not yet recorded 645
Total P68,225
At what amount should cash on hand and in bank be reported on Happy’s balance sheet?
a P50,185 b P53,475 c P62,935 d P66,225
Petty Cash Fund 360
Cash in Bank (33,675-600) 33,075
Undeposited Receipts (17,800-1,050) 16,750
Cash on Hand and in Bank 50,185
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

31. Which statement is true in relation to presentation of receivables in the statement of financial position?
a. Trade receivables and nontrade receivables must be shown separately
b. Nontrade receivables are presented as noncurrent
c. Trade accounts receivable and trade notes receivable must be presented separately
d. Trade receivables and nontrade receivables which are currently collectible may be presented as one
line item called “trade and other receivables”
32. In the case of long-term installments receivable as in real estate installment sales where a major portion is collected
beyond the normal operating cycle
a. The entire receivables are shown as current without disclosure of the amount not currently due
b. The entire receivables are shown as noncurrent
c. Only the portion currently due is shown as current and the balance as noncurrent
d. The entire receivables are shown as current with disclosure of the amount not currently due
33. What method of recording bad debt loss is consistent with accrual accounting?
a. Allowance method
b. Direct write off method
c. Percent of sales method
d. Percent of accounts receivable method
34. The advantage of relating the bad debt experience to accounts receivable is that this approach
a. Gives a reasonably accurate measurement of receivables in the statement of financial position
b. Relates bad debt expense to the period of sale
c. Is the only generally accepted method for measuring accounts receivable
d. Makes estimates of uncollectible accounts unnecessary
35. When a specific customer account receivable is written off as uncollectible, what will be the effect on net income
under the allowance and direct writeoff method?
a. No effect under both allowance method and direct writeoff method
b. Decrease under both allowance method and direct writeoff method
c. No effect under allowance method and decrease under direct writeoff method
Allowance method Direct writeoff
ADA xx DA Exp. xx
A/R xx A/R xx
d. Decrease under allowance method and no effect under direct writeoff method
36. When the allowance method of recognizing bad debt expense is used, the entries at the time of collection of an
account previously written off would
a. Decrease the allowance for doubtful accounts
b. Increase net income
c. Have no effect on the allowance for doubtful accounts
d. Have no effect on net income
A/R xx
ADA xx

Cash xx
A/R xx
37. Which method of determining bad debt expense does not match expense and revenue?
a. Charging bad debts with percentage of sales under the allowance method
b. Charging bad debts with a percentage of accounts receivable under the allowance method
c. Charging bad debts with an amount derived from aging the accounts receivable under the allowance method
d. Charging bad debits as accounts are written off as uncollectible
38. Which concept relates to the allowance method in accounting for uncollectible accounts receivable?
a. Bad debt expense is an estimate based on historical and prospective information
b. Bad debt expense in the actual amount determined to be uncollectible
c. Bad debt expense is an estimate based only on aging of account receivable
d. Bad debt expense is management determination of which accounts are considered doubtful
39. The estimate of uncollectible accounts receivable based on a percentage of sales
a. Emphasizes measurement of the net realizable value of accounts receivable
b. Emphasizes measurement of bad debt expense
c. Emphasizes measurement of total assets
d. Is only acceptable for tax purposes
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

40. On December 31, 2019, the balance of accounts receivable of Jalena Company was P6,000,000 and the January
1, 2019 balance of allowance for doubtful accounts was P800,000. The following data were gathered:
Credit Sales Write offs Recoveries

2016 9,000,000 400,000 30,000

2017 13,000,000 600,000 70,000

2018 15,000,000 700,000 120,000

2019 20,000,000 650,000 150,000

Doubtful accounts are provided for a percentage of credit sales. The accountant calculates the percentage annually by
using the experience of the three years prior to the current year. How much should be reported as allowance for doubtful
accounts on December 31, 2019?

a. 1,100,000 b. 800,000 c. 1,300,000 d. 4,900,000

3-year experience

% Uncollectible = Total writeoffs less recoveries (2016-2018)


Total Credit Sales (2016-2018)

= 1,480,000
37,000,000

= 4%

4% x 20,000,000 = 800,000 Doubtful Accounts Expense

ADA, Beg. Bal. 800,000


Write-off (650,000)
Recoveries 150,000
DA Expense 800,000
ADA, End. 1,100,000
41. On December 31, 2019, the balance of accounts receivable of Jalena Company was P6,000,000 and the January
1, 2019 balance of allowance for doubtful accounts was P800,000. The following data were gathered:
Credit Sales Write offs Recoveries

2016 9,000,000 400,000 30,000

2017 13,000,000 600,000 70,000

2018 15,000,000 700,000 120,000

2019 20,000,000 650,000 150,000

Doubtful accounts are provided for a percentage of credit sales. The accountant calculates the percentage annually by
using the experience of the three years prior to the current year. How much should be reported as Accounts Receivable
on December 31, 2019?

a. 1,100,000 b. 800,000 c. 1,300,000 d. 4,900,000

A/R, end. 6,000,000


ADA, end. (1,1000,000)
A/R, net of ADA 4,900,000
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

42. Grime Company provided the following information for the current year:

Allowance for doubtful accounts for January 1 200,000


Credit sales 5,000,000
Accounts receivable deemed worthless and written off 300,000

As a result of a review and aging of accounts receivable, it has been determined that an allowance for doubtful
accounts of P400,000 is needed on December 31.

What amount should be recorded as doubtful accounts expense for the current year?
a. 400,000 b. 300,000 c. 500,000 d. 700,000

ADA, beg. 200,000


Write-offs (300,000)
DA expense 500,000
ADA, end. 400,000
43. Jynx Company provided the following information for the current year in relation to accounts receivable:
Accounts Receivable 1,300,000
Credit Sales 5,500,000
Sales return 150,000
Accounts written off 100,000
Collections from customers 5,000,000
Estimated future sales return on December 31 50,000
Estimated uncollectible accounts per aging at year-end 250,000

What amount should be reported as net realizable value of accounts receivable on December 31?

a. 1,550,000 b. 1,250,000 c. 1,300,000 d. 1,500,000

A/R, beg. 1,300,000


Credit Sales 5,500,000
Sales Return (150,000)
Accounts Written off (100,000)
Collections from Customers (5,000,000)
A/R, end. 1,550,000
Allow. For sales return (50,000)
Allow. For doubtful accounts (250,000)
A/R, net. 1,250,000
44. At year end, Hunter Company reported accounts receivable of P8,200,000 with the following analysis:

Accounts known to be worthless 100,000


Advance payments on purchase orders 400,000
Advances to subsidiary 1,000,000
Customers’ accounts reporting credit balances
Arising from sales returns (600,000)
Trade accounts receivable 3,500,000
Subscription receivable due in 30 days 2,200,000
Trade installment receivable due 1-18 months,
Including unearned finance charge of P50,000 850,000
Trade accounts receivable from officers, due currently 150,000
Trade accounts on which postdated checks are held and
No entries were made on receipt of checks 200,000

What is the correct balance of trade accounts receivable?


a. 4,650,000 b. 4,700,000 c. 4,150,000 d. 4,050,000
Trade Accounts Receivable 3,500,000
Worthless Accounts (100,000)
Advance payments on purchase orders 400,000
Trade accounts receivable from officers 150,000
Postdated checks 200,000
Trade accounts receivable 4,150,000
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

45. Nami Company reported the following unadjusted balances at year-end:


Debit Credit

Accounts Receivable 3,000,000


Allowance for doubtful accounts 10,000
Net credit sales 8,000,000

The entity estimated that 3% of the gross accounts receivable would become uncollectible.

What amount should be reported as doubtful accounts expense for the current year?

a. 240,000 b. 100,000 c. 90,000 d. 230,000

3,000,000 x 3% = 90,000 Allow. For DA

ADA, beg. (10,000)


DA exp. 100,000
ADA, end. 90,000
46. Nami Company reported the following unadjusted balances at year-end:
Debit Credit

Accounts Receivable 3,000,000


Allowance for doubtful accounts 10,000
Net credit sales 8,000,000

The entity estimated that 3% of the gross accounts receivable would become uncollectible.

What amount should be reported as allowance for doubtful accounts as of year-end?

a. 240,000 b. 100,000 c. 90,000 d. 230,000


47. Nami Company reported the following unadjusted balances at year-end:
Debit Credit

Accounts Receivable 3,000,000


Allowance for doubtful accounts 10,000
Net credit sales 8,000,000

The entity estimated that 3% of the Net credit sales would become uncollectible.

What amount should be reported as allowance for doubtful accounts as of year-end?

b. 240,000 b. 100,000 c. 90,000 d. 230,000

3% x 8,000,000 = 240,000 DA exp.

ADA, beg. (10,000)


DA exp. 240,000
ADA, end. 230,000
48. Nami Company reported the following unadjusted balances at year-end:
Debit Credit

Accounts Receivable 3,000,000


Allowance for doubtful accounts 10,000
Net credit sales 8,000,000

The entity estimated that 3% of the Net credit sales would become uncollectible.

What amount should be reported as doubtful accounts expense as of year-end?

a. 240,000 b. 100,000 c. 90,000 d. 230,000

49. Banks Company reported the following accounts at year-end before adjustments:
Debit Credit

Allowance for doubtful accounts 5,000


Sales 7,200,000
Sales return 200,000
University of Nueva Caceres
College of Business and Accountancy
J. Hernandez Avenue, Naga City
Prelim Exam
Intermediate Accounting One JDMANAOG

The entity estimated uncollectible accounts receivable at 2% net sales.

What amount of doubtful accounts expense should be reported for the current year?
a. 140,000 b. 145,000 c. 141,000 d. 144,000

2% x 7,000,000 = 140,000 DA expense

50. Banks Company reported the following accounts at year-end before adjustments:
Debit Credit

Allowance for doubtful accounts 5,000


Sales 7,200,000
Sales return 200,000

The entity estimated uncollectible accounts receivable at 2% credit sales.

What amount of doubtful accounts expense should be reported for the current year?
a. 140,000 b. 145,000 c. 141,000 d. 144,000

2% x 7,200,000 = 144,000 DA expense

*It’s about rising to the occasion, it’s about tasting the rapture and triumph and disgrace
of failure, they go hand in hand you see. One is meaningless without the other, to win
one has to lose. The difference between the novice and the master is that the master
has failed more times than the novice has tried.*