Accounting test #3 example #48224

9 December 2022

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7 test answers

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question

With good internal controls, the person who handles cash can also

answer

No one can handle the cash.

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When recording credit card or debit card sales using the net method,

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Cash received equals sales minus the fee assessed by the card processing company.

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Is a limitation of the direct write-off method of accounting for uncollectible,

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Overstates assets on the balance sheet, doesn't match expense against revenue very well.

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The entry to record a write-off of an uncollectible account when using the direct-write off method involves a,

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Debit to Bad Debts Expense

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Depreciation

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Process of allocating the cost of a fixed asset over the assets useful life.

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Accumulated depreciation

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The total amount of depreciation expense recorded over the life of an asset, is reported on the balance sheet as a contra-asset.

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Straight line

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Allocates on equal amount of an asset cost.