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Exam 7: Cash and Receivables

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Question 31

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Use the following to answer questions The following note disclosure is taken from the 2016 annual report to shareholders of Winchester International Corporation. NOTE 5: ALLOWANCE FOR LOAN LOSSES The allowance for loan loss is maintained at a level to absorb probable losses inherent in the loan portfolio.This allowance is increased by provisions charged to operating expense and by recoveries on loans previously charged off,and reduced by charge-offs on loans. The following is a summary of the changes in the allowances for loan losses for three years: Winchester also reported (in thousands)in its comparative balance sheet that it held Loans receivable,net,of $6,869,911 and $6,819,209 at December 31,2016,and December 31,2015,respectively. -Is there any evidence in Winchester's disclosures above that are consistent with earnings management?

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It appears that Winchester has an excess...

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Question 32

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Under IFRS,accounts receivable can be accounted for as "available for sale" if that approach is elected upon initial recognition of the receivable.

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B) False

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Question 33

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Cash equivalents would include investments in marketable equity securities as long as management intends to sell the securities in the next three months.

When you use an aging schedule approach for estimating uncollectible accounts:

The cash collection on July 1,2016,would be recorded as:

In a good system of internal control,the person who initiates a transaction should be allowed to effectively control the processing of the transaction through its final inclusion in the accounting records.

Peecher accepted a three-year,noninterest-bearing note in exchange for merchandise sold.Which of the following is true?

What is the correct entry for Flores on November 10?

Depending on the circumstances,the classification of a compensating balance may be either current or noncurrent,and the arrangement should be disclosed in the notes.

Which of the following is not true regarding accounting for transfers of receivables under IFRS?

Accounts receivable are normally reported at the:

Use the following to answer questions The following note disclosure is taken from the 2016 annual report to shareholders of Winchester International Corporation. NOTE 5: ALLOWANCE FOR LOAN LOSSES The allowance for loan loss is maintained at a level to absorb probable losses inherent in the loan portfolio.This allowance is increased by provisions charged to operating expense and by recoveries on loans previously charged off,and reduced by charge-offs on loans. The following is a summary of the changes in the allowances for loan losses for three years: Winchester also reported (in thousands)in its comparative balance sheet that it held Loans receivable,net,of $6,869,911 and $6,819,209 at December 31,2016,and December 31,2015,respectively. -Using a T-account for the Allowance for Loan Losses,identify the changes in the account during 2016.

Use the following to answer questions The following information is taken from the 2013 annual report to shareholders of Hewlett-Packard (HP)Co. -Using a T-account for the allowance for doubtful accounts,identify the changes in the account during fiscal year 2013.

The purpose of assigning accounts receivable is to:

The net method of accounting for cash discounts requires adjusting entries for discounts taken.

Hazelton Manufacturing prepares a bank reconciliation at the end of every month.At the end of May,the general ledger checking account showed a balance of $1,360 and the bank statement showed a bank balance of $1,445.Outstanding checks totaled $350 and deposits in transit were $150.The bank statement listed service charges of $30 and NSF checks totaling $85.The corrected cash balance is:

Guido Properties owes First State Bank $60 million under a 7% note with two years remaining to maturity.Due to financial difficulties of Guido,the previous year's interest ($4.2 million)was not received.The bank agrees to settle the note receivable and accrued interest receivable in exchange for land having a fair value of $44 million. Required: Compute the loss on troubled debt restructuring that the bank would record.

What bad debt expense would Dinty report in its first-year income statement?

Use the following to answer questions Wilson Company had the following cash balance items listed in its trial balance at 12/31/2016: -If Wilson reports under U.S.GAAP,its 12/31/2016 balance sheet would show what cash balance?

Drebin Security Systems sold merchandise to a customer in exchange for a $50,000,five-year,noninterest-bearing note when an equivalent loan would carry 10% interest.Drebin would record sales revenue on the date of sale equal to: