Deck 27: Additional Accounting Procedures

Question 1

Legally, a partnership agreement may be either written or oral.

Answer 1

True

Question 2

When liquidating a partnership, after all noncash assets are sold and all creditors are paid, any remaining cash is distributed to the partners in the same proportions as the earnings are shared.

Answer 2

False

Question 3

A trade acceptance is similar to a draft except a draft is generally paid by a bank and a trade acceptance is paid by the buyer.

Answer 3

True

Question 4

The lack of uniform commercial laws among countries makes international sales simpler than domestic sales.

Question 5

Sales taxes are normally paid only on sales to the final consumer.

Question 6

Withdrawals could be recorded as debits to the partners' capital accounts, but are normally recorded in separate accounts so that the total amounts are easily determined.

Question 7

The transportation company sends the signed bill of lading to the buyer, so the seller does not know when the merchandise has been shipped.

Question 8

The steps in preparing a distribution of net income statement are different depending on how earnings are shared.

Question 9

The Assets and Liabilities sections of a balance sheet for a partnership are prepared in the same way as the Assets and Liabilities sections of a balance sheet for a proprietorship.

Question 10

A seller generally has much more assurance of receiving payment from a buyer than from a bank.

Question 11

The entry to journalize an international cash sale includes a

A) debit to Time Drafts Receivable and a credit to International Sales.
B) debit to International Sales and a credit to Time Drafts Receivable.
C) debit to Sales and a credit to Cash.
D) debit to Cash and a credit to Sales.

Question 12

The journal entry to record an international cash sale would be recorded in a

A) cash payments journal.
B) cash receipts journal.
C) general journal.
D) purchases journal.

Question 13

The documents that must be presented to a seller's bank in order for the seller to collect payment for an international cash sale are

A) a bill of lading, a commercial invoice, and a draft.
B) an invoice and a shipping document.
C) a bill of lading and a draft.
D) a commercial invoice, a bill of lading, and a sales tax invoice.

Question 14

The entry to journalize the receipt of a time draft for an international sale includes a

A) debit to Sales and a credit to Cash.
B) debit to Cash and a credit to Sales.
C) debit to Sales and a credit to Time Drafts Receivable.
D) debit to Time Drafts Receivable and a credit to Sales.

Question 15

The journal entry to record the receipt of a time draft for an international sale would be recorded in a

A) cash payments journal.
B) cash receipts journal.
C) general journal.
D) purchases journal.

Question 16

The entry to journalize the receipt of cash for the value of a time draft includes a

A) debit to Time Drafts Receivable and a credit to Cash.
B) debit to Cash and a credit to Time Drafts Receivable.
C) debit to Cash and a credit to Sales.
D) debit to Sales and a credit to Cash.

Question 17

The journal entry to record the receipt of cash for the value of a time draft would be recorded in a

A) cash payments journal.
B) cash receipts journal.
C) general journal.
D) sales journal.

Question 18

The journal entry to record an Internet credit card sale includes a

A) debit to Cash and a credit to Sales.
B) debit to Sales and a credit to Cash.
C) debit to Accounts Receivable and a credit to Sales.
D) debit to Sales and a credit to Accounts Receivable.

Question 19

The journal entry to record an Internet credit sale would be recorded in a

A) cash payments journal.
B) cash receipts journal.
C) general journal.
D) sales journal.

Question 20

A draft that is payable at a fixed or determinable future time after it is accepted is called a

A) sight draft.
B) future draft.
C) bill of lading draft.
D) time draft.

Question 21

Select the one term that best fits each definition.

-The process of paying a partnership's liabilities and distributing remaining assets to the partners.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 22

Select the one term that best fits each definition.

-A form signed by a buyer at the time of a sale of merchandise in which the buyer promises to pay the seller a specified sum of money, usually at a stated time in the future.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 23

Select the one term that best fits each definition.

-Cash received from the sale of assets during liquidation of a partnership.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 24

Select the one term that best fits each definition.

-A partnership financial statement showing net income or loss distribution to partners.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 25

Select the one term that best fits each definition.

-A draft that is payable at a fixed or determinable future time after it is accepted.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 26

Select the one term that best fits each definition.

-A written agreement setting forth the conditions under which a partnership is to operate.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 27

Select the one term that best fits each definition.

-A letter issued by a bank guaranteeing that a named individual or business will be paid a specified amount, provided stated conditions are met.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 28

Select the one term that best fits each definition.

-Goods or services shipped into the buyer's home country from another country.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 29

Select the one term that best fits each definition.

-Goods or services shipped out of a seller's home country to another country.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance

Question 30

Select the one term that best fits each definition.

-A receipt signed by the authorized agent of a transportation company for merchandise received that also serves as a contract for the delivery of the merchandise.

A) bill of lading
B) distribution of net income statement
C) exports
D) imports
E) letter of credit
F) liquidation of a partnership
G) partnership agreement
H) realization
I) time draft
J) trade acceptance