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Answers 9-13Company X estimates bad debt expense with an aging of accounts receivable schedule, in 20XX the company’s estimate of uncollectible receivables resulting from the aging analysis is $190. The beginning balance of the allowance for doubtful accounts was $1.50. Write-offs of bad debts during the period were $270. What amount would be recorded as bad debt expense for the current period? a. $310 b. $230 c. $190 d. $270 Which of the following is not a step toward effective internal control over cash? a. Require signatures from manager and one financial officer on all checks b. Require that small purchase approvals and cash payments for such purchases be handled by the same individual. c. Require that the person responsible for removing the cash from the register have no access to the accounting records d. Require that cash be deposited daily at the bank. Which of the following statements regarding statement of cash flows is false? a. The statement of cash flows separates cash inflows and outflows into three major categories. b. The ending balance of the statement of cash flows for year 20xx must agree with the amount of cash shown on the balance sheet for 20xx year-end. c. The net increase (or decrease) in cash shown on the statement of cash flows for 20XX must equal the net income (or loss) on income statement for 20XX. d. Statement of cash flows can be prepared using the direct or the indirect approach. Which of the following statements regarding GAAP is true? a. U.S. GAAP is a body of accounting knowledge followed by all countries. b. GAAP is an abbreviation for generally accepted accounting procedures. c. Changes in GAAP must be approved by the U.S. Senate. d. Changes in GAAP can affect the interests of managers and shareholders. The cash T account has a beginning balance of $35, 000. During the year, $100, 000 was debited and 85, 000 was credited to the account. What is the ending balance of cash? a. $50, 000 credit balance b.$50, 000 debit balance c. $150, 000 credit balance d. $150, 000 credit balance At the end of the year, XYZ, Inc, has total assets of $350, 000. Ending balances for Retained Earnings, Common Stock, and Additional Paid-in Capital accounts are, $90, 000, $20, 000 and
Expert Answer
9) Bad debts expense for the current year = Estimated uncollectible amount – Allowance for bad debts + Write off for the current year
= $190-$150+$270
= $310
Option A
10) Effective internal controls over cash include
Requiring authentication for every expense, segregation of duties, deposit of cash daily at the bank, not handling too much cash at once by a single person. So, the answer here is Option B as allowing such scenario might give rise to mishandling of authority resulting in cash embezzlement
11) Cashflow statement can be prepared using both direct and indirect methd where the ending balance arrived at after calculating the cashflows from operating, investing and financing activities muct reflect in the balance sheet as the cash balance for the year.
So, out of the options given, the answer is Option C
12) GAAP: Generally accepted accounting principles are a common set of accounting principles, standards and procedures that the cimpanies must follow while preparing the financial statements. They area combination of authoritative standards + commonly accepted ways of recording and updating the financial information. GAAP which are issued by the Financial Accounting standards board is mainly focused on the practices of US companies.
Any changes in GAAP will effect the interests of all the persons involved with the company.
So, the answer is option D
13) Closing balance of cash = $35000+$100000 – $85000 = $50000 debit balance
So, the answer is option B
