51. The Allowance for Doubtful Accounts will appear on the
A. Income statement
B. Balance sheet
C. Cash flow statement
D. Owners' equity statement
52. "Concentrations of credit risk" occur if:
A. A significant portion of receivables are due from a few major customers.
B. A significant portion of receivables are from customers in the same industry.
C. Both of the above
D. Neither of the above
53. The mark-to-market adjustment for investments classified as "available for sale" affects:
A. The balance sheet
B. The income statement
C. The cash flow statement
D. All of the above
54. Financial assets include all of the following except
A. Cash
B. Marketable securities
C. Inventories
D. Accounts receivable
55. The bookkeeper prepared a check for $68 but accidentally recorded it as $86. When preparing the bank reconciliation, this should be corrected by:
A. Adding $18 to the bank balance
B. Subtracting $18 from the bank balance
C. Adding $18 to the book balance
D. Subtracting $18 from the book balance.
56. After preparing a bank reconciliation, a journal entry would be required for which of the following:
A. A deposit in transit
B. A check for $48 given to a supplier but not yet recorded by the company's bank.
C. Interest earned on the company's checking account.
D. A deposit made by a company with a similar name and credited to your account.
57. All the following are steps included in the preparation of a bank reconciliation except:
A. Comparing deposits listed on the bank statement with the deposits shown in the accounting records.
B. Arranging checks by serial numbers and comparing with those listed in the accounting records.
C. Deducting any debit memoranda from the balance on the bank statement.
D. Preparing journal entries for any adjustments to the depositor's records.
58. Each of these categories of assets is normally shown in the balance sheet at current value, except:
A. Inventories.
B. Accounts receivable.
C. Short-term investments in marketable securities.
D. Cash.
59. Financial assets:
A. Consist of cash and cash equivalents.
B. Are reported at cost in the balance sheet.
C. Include short-term investments in marketable securities and receivables, as well as cash.
D. Are not very productive assets and should be kept to a minimum in a well-managed company.
60. Which of the following is not considered a cash equivalent?
A. US Treasury bills.
B. Money market funds.
C. Accounts receivable.
D. High-grade commercial paper.