Problem 2: true/false questions13. The large deficit in Chicago's revolving funds was due to an accounting systems problem thatresulted in bills not being sent to user departments for services rendered.14. Internal service funds can obtain long-term financing by issuing either revenue bonds or generalobligation bonds.15. Enterprise funds report bad debt expense in the operating expenses section of the statement ofrevenues, expenses, and changes in net position.16. On an enterprise fund's statement of net position, the amount reported for restricted netposition can be based upon a constraint imposed by the governing body of the localgovernment.17. On the proprietary fund financial statements, internal service funds are reported under theheading of governmental activities.18. If cash flows from operating activities are not large enough to sustain the operations of anenterprise fund, the cash to sustain the operations must come from selling investments andcapital assets.19. On the proprietary funds statement of cash flows, GASB allows local and state governments theoption to report cash flows from operating activities either directly or indirectly.20. When the water utility bills the police department for water usage, the water utility debits"customer accounts receivable" for the amount of the billing.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In prior periods, Globo Gym Services used the direct write off method to account for bad debts. Globo Gym Services historically had a stable client base and management did not continue to service clients who did not pay invoices due. Complete the following: (a) Describe the direct write off method of accounting for bad debts. (b) Explain with reference to one qualitative characteristic why the direct write off method was deemed appropriate prior to the COVID-19 pandemic and why it is unlikely to be appropriate since the pandemic. Clearly label each part of your answer related to parts a and b above.
10 - From whom is VAT charged when a receipt is made from the cash register?A) FROM THE TAX OFFICEB) FROM THE CUSTOMERC) FROM THE SELLERD) EMPLOYEEE) NO VAT TAXES
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17. Which of the following provides a company with an efficient way to handle small payments of cash? a. Petty cash fund b. Bank account c. General reserve d. Allowance for doubtful accounts
A cash payment under a good control system will have. a. Too much amount Bank book balance b. Appointing different persons to authorize the payment and sign the cheques c. Too much amount book balance d. Maintaining minimum bank book balance
Question 5 Explain why each of the following combinations of tasks should or should not be separated to achieve adequate internal control. Approval of bad debt write-offs and the reconciliation of the accounts receivablesubsidiary ledger and the general ledger control account. Distribution of payroll checks to employees and approval of employee time cards. c. Posting of amounts from both the cash receipts and the cash disbursements journals to the general ledger. Writing checks to vendors and posting to the cash account. Recording cash receipts in the journal and preparing the bank reconciliation
Which of the following reflects a weak internal control system? Please explain with full explanation. a. All employees are well supervised. b. A single employee is responsible for comparing a receiving report to an invoice. c. All employees must take their vacations. d. A single employee is responsible for collecting and recording cash.
TB MC Qu. 5-62 (Static) What is the primary disadvantage of extending... What is the primary disadvantage of extending credit to customers? Multiple Choice O Lower revenues Reduced operating efficiency O Lower profitability Delay or failure to collect cash
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13. The large deficit in Chicago's revolving funds was due to an accounting systems problem that resulted in bills not being sent to user departments for services rendered.