21) Preparing a bank reconciliation on a monthly basis is an example of A) Estab

Question

21) Preparing a bank reconciliation on a monthly basis is an example of A) Establishing responsibility. B) Separation of dutics. C) Protecting assets by proving the accuracy of cash records. D) A technological control. E) Poor internal control. 22) The maturity date of a note receivable: A) Is the day of the credit sale. B) Is the day the note was signed. C) Is the day the note is due to be repaid. D) Is the date of the first payment. E) Is the last day of the month. 23)The interest accrued on $7,500 at 6% for 90 days is: (Use 360 days a year.) A) $450.00 B) $37.50 C) $112.50. D) $11.25. E) $1,800.00. 24) The expense recognition (matching) principle, as applied to bad debts, requires: A) That expenses be ignored if their effect on the financial statements is unimportant to users' business decisions B) The use of the direct write-off method for bad debts. C) The use of the allowance method of accounting for bad debts. D) That bad debts be disclosed in the financial statements. E) That bad debts not be written off. 25) Jasper makes a $25,000, 90-day, 7% cash loan to Clayborn Co. The amount of interest that Jasper will collect on the loan is: (Use 360 days a year.) A) $1,750 B) $145.83. C) $437.50. D) $19.44. E) $875.00

Explanation / Answer

21) option c protecting assets by proving the accuracy of cash records 22) option c is the day the note is due to be repaid 23) interest accrued = 7500*6%*90/360 112.5 option c ) $112.50 24) option c) the use of the allowance method for bad debts 25) 25000*7%*90/360 437.5 option c) $437.50

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