Accounting Questions For Chapter 7: Cash And Receivables
*22. (1) The general checking account is the principal bank account of most companies and frequently the only bank account of small companies. Most if not all transactions are cycled through the general checking account, either directly or on an imprest basis.
(2) Imprest bank accounts are used to disburse cash (checks) for a specific purpose, such as dividends, payroll, commissions, or travel expenses. Money is deposited in the imprest fund from the general fund in an amount necessary to cover a specific group of disbursements. (3) Lockbox accounts are local post office boxes to which a multilocation company instructs its customers to mail remittances. A local bank is authorized to empty the box daily and credit the company’s accounts for collections.
SOLUTIONS TO BRIEF …show more content…
The appropriate balance for doubtful accounts must be determined. In addition, the manner of reporting accounts receivable on the balance sheet must be shown.
Problem 7-4 (Time 25-35 minutes)
Purpose—the student prepares an analysis of the changes in the allowance for doubtful accounts and supports it with an aging schedule. The adjusting entry is prepared.
Problem 7-5 (Time 20-30 minutes)
Purpose—a short problem that must be analyzed to make the necessary correcting entries. It is not a pencil-pushing problem but requires a great deal of conceptualization. A good problem for indicating the types of adjustments that might occur in the receivable area.
Problem 7-6 (Time 25-35 minutes)
Purpose—to provide the student with a number of business transactions related to notes and accounts receivable that must be journalized. Notes receivable past due, recoveries of receivables, and write-offs are the types of transactions presented. The problem provides a good cross section of a number of accounting issues related to receivables.
Problem 7-7 (Time 25-30 minutes)
Purpose—a short problem involving the reporting problems associated with the assignment