7.1: Concept Self-Check
- Page ID
- 20106
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Use the following as a self-check while working through Chapter 7.
- What constitutes a good system of control over cash?
- What is a petty cash system and how is it used to control cash?
- How is petty cash reported on the balance sheet?
- How does the preparation of a bank reconciliation facilitate control over cash?
- What are the steps in preparing a bank reconciliation?
- How does the estimation of uncollectible accounts receivable address the GAAP of matching?
- How are uncollectible accounts disclosed on financial statements?
- What are the different methods used for estimating uncollectible accounts receivable?
- How is aging of accounts receivable used in estimating uncollectible accounts?
- How are notes receivable recorded?
- What is the acid-test ratio and how is it calculated?
- How is the accounts receivable turnover calculated and what does it mean?
NOTE: The purpose of these questions is to prepare you for the concepts introduced in the chapter. Your goal should be to answer each of these questions as you read through the chapter. If, when you complete the chapter, you are unable to answer one or more the Concept Self-Check questions, go back through the content to find the answer(s). Solutions are not provided to these questions.