Intermediate Accounting, 16th Edition By Donald E. Kieso

Intermediate Accounting, 16th Edition By Donald E. Kieso

CHAPTER 7

CASH AND RECEIVABLES

IFRS questions are available at the end of this chapter.

TRUE-FALSE—Conceptual
Answer No. Description
T 1. Items considered cash.
F 2. Items considered cash.
F 3. Items considered cash.
F 4. Cash equivalents definition.
F 5. Bank overdrafts.
T 6. Cash equivalents.
F 7. Classification of receivables.
F 8. Items considered trade receivables.
T 9. Trade discount uses.
T 10. Sales discounts.
T 11. Valuation of receivables.
F 12. Percentage-of-receivables approach.
F 13. Percentage-of-receivables approach.
T 14. Reporting short-term receivables.
F 15. Valuation of accounts receivables.
T 16. Reporting notes receivable.
F 17. Stated interest rate vs. effective rate.
F 18. Financial instruments valuation.
T 19. Recourse liability.
F 20. Buying receivables with recourse.
T 21. Selling receivables with recourse.
F 22. Computing receivables turnover.
F 23. Impairment of receivables.
T 24. Impairment loss calculation.
F 25. Impairment measurement.

MULTIPLE CHOICE—Conceptual
Answer No. Description
d 26. Identification of cash items.
b 27. Identification of cash items.
d 28. Classification of travel advance.
d P29. Items included as cash.
b 30. Identification of cash items.
a 31. Classification of post-dated checks.
b 32. Classification of postage stamps.
d 33. Compensating balance definition.
b 34 Classification of cash restricted for plant expansion.
d S35. Cash equivalent definition.
d 36. Classification of bank overdraft.
d 37. Classification of compensating balances.

MULTIPLE CHOICE—Conceptual (cont.)
Answer No. Description
a 38 Classification of bank overdraft.
b 39 Characteristics of receivable.
d 40. Definition of trade receivables.
d 41. Identification of trade receivables.
c S42. Presentation of nontrade receivables.
d S43 Cash discount definition.
d P44. Trade discount uses.
a 45. Classification of sales discounts.
d 46. Reasons for trade discounts.
c 47. Accounting for cash discounts and trade discounts.
a 48. Theoretically correct approach for cash discounts.
c 49. Accounts receivable valuation problems.
d 50. Reason allowance method is preferable.
a 51. Allowance method concept.
b 52. Accounting for bad debts and earnings management.
c 53. Recording bad debt expense.
a 54. Journal entry for writing off an account.
d 55. Journal entry for collection of an account previously written off.
c 56. Valuation of short-term receivables.
d 57. Bad debt provision and the matching concept.
a 58. Bad debts as a percentage of sales.
b 59. Bad debts as a percentage of sales.
a 60. Bad debts as a percentage of receivables.
d 61. Financial statement effect of a note recorded incorrectly.
b 62. Imputed interest description.
c 63. Recording fair value option.
b 64. Fair value option.