44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

Questions
Complex 

Moderate 

How many
questions that
you did answer?
List the question
that you are not
able to answer.

Simple 
10/10

Brief Exercises
Complex 

Moderate 

How many brief
exercises that
you did answer?

List the brief
exercises that
you are not able
to answer.

Simple 
19/19

Exercises
Complex 

Moderate 

How many
exercises that
you did answer?
List the exercises
that you are not
able to answer.

Simple 

__10_/11

E7-10 c

Problems & Critical Thinking
Complex 
Moderate 
How many

___8/9
© 2019 by Dr. Nguyen Huu Cuong

Simple 

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1


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

problems that
you did answer?
List the problems
that you are not
able to answer.

P7-10A

Student Information
Full Name Ngô Thị Lan Dung
Class
44k06.1

Phone
0372532471
Email

Self-evaluation
(Out of ten)

© 2019 by Dr. Nguyen Huu Cuong

9/10

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44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

QUESTIONS
Financial Accounting: Tools for Decision-Making, 7th Canadian Edition (Kimmel P.D. et
al., 2017)
Chapter 7 "Internal Control and Cash"

Q5: How do documentation procedures contribute to good internal control?

 Documents provide evidence that transactions and events have occurred at specified
times and at specified amounts. Documentation procedures helps prevent unauthorized or
fraudulent use of documents so that invoices cannot be misused.
Q15: Who should be responsible for preparing a bank reconciliation? Why
 The person who prepares a bank reconciliation should have no other cash duties. Because
everyday, an independent employee can then compare the amount of cash deposited per
the deposit slip with the amount of cash receipts recorded that day to ensure that funds
deposited were also recorded. If duties are segregated, no one would be able to steal
cheques and also be able to record their receipt to cover up the theft.
Q17: Paul Pascal is confused about the lack of agreement between the cash balance per books
and the balance per bank. Explain the possible causes for the lack of agreement to Paul, and give
an example of each cause
 There are two reasons that the bank and company records differ: Timing differences
and Errors
For example, if an item is on the book but has not appeared on the bank statement
( outstanding cheques and deposits in transit), the items are entered as an adjustment to
balance per bank statement. If an item is on the bank statement but has not been entered
on the books, ), the items are entered as an adjustment to balance per books ( bank
service charges, electronic deductions, deposit )

Chapter 8 "Reporting and Analysing Receivables"

Q2: Distinguish between trade receivables and nontrade receivables.
 Trade Receivable are amounts owed by customers for goods and services sold in the
course of a firm’s ordinary business activities.

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”


3


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

 Nontrade Receivable are the total claims resulting from transactions or events that are not
a firm’s ordinary business activity,
Q7: (a) What is the purpose of the account Allowance for Doubtful Accounts?
 The Allowance for Doubtful Accounts is used when Bad Debt Expense is recorded prior
to knowing the specific accounts receivable that will be un collectible. The expense is
matched more closely with the revenues—the goal of accounting's matching principle.
(b) Although the normal balance of this account is a credit balance, it can sometimes have a
debit balance. Explain how and when this can happen.
 Normal balance of the Allowance for Doubtful Account is credit balance, it can
sometimes have a debit balance when the Allowance for Doubtful Account decrease more
than when the Allowance for Doubtful Account increase
Q9: Why is the bad debts expense that is reported on the income statement usually not the same
amount as the allowance for doubtful accounts amount reported in the statement of financial
position?
 Bad debt expense is expense and the income statement. Bad debt expense make decease
net income. Bad debt expense is reported in income statement
Allowance for Doubtful Account is current asset. The Statement of Financial Position
included current asset and non current asset. Allowance for Doubtful Account is reported
The Statement of Financial Position

Q10: Mohamed cannot understand why the carrying amount of accounts receivable does not
change when an uncollectible account is written off under the allowance method. Clarify this
for Mohamed.
 When written off under the allowance method
Allowance for Doubtful Account
XX
Account Receivable
XX
In beginning, Account Receivable
XX
Allowance for Doubtful Account
XX
Q18: Indicate how accounts receivable and allowance for doubtful accounts should be presented
on the statement of financial position.
 Allowance for Doubtful Account
XX
Account Receivable
XX
The Statement of Financial Position
Current asset
© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

4


44K06.
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Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

Account receivable
Less Allowance for doubtful account
Carrying amount

X1
X2
X1-X2

Q19: Saucier Ltd. has accounts receivable, notes receivable due in three months, notes
receivable due in two years, an allowance for doubtful accounts, an allowance for doubtful
notes, sales tax recoverable, and income tax receivable. How should the receivables be reported
on the statement of financial position?
 Current asset
Account receivable
X1
Less Allowance for doubtful account
X2
Carrying amount
X1 – X2
Note receivale (3 months)
X3
Sales tax recoverable
X4
Income tax receivable.
X5

Total
Non current asset
Note receivable
X6
Less Allowance for doubtful account notes
X7
Carrying amount
X6 – X7
Q20: (a) Identify three income statement accounts that are related to receivables.
 Sale revenue, sale discount and allowance for doubtful account
(b) Indicate where each account would be reported on the income statement.
 Sale revenue : revenue
Sale discount : contra revenue
Allowance for doubtful account : receivable

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

5


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)


BRIEF EXERCISES
Financial Accounting: Tools for Decision-Making, 7th Canadian Edition (Kimmel P.D. et
al., 2017)
Chapter 7 "Internal Control and Cash"

BE7-2:
(a) 3

(c) 6

(e) 1

(b) 4

(d) 5

(f) 2

BE7-5:
1 Book -

7 Book +

2 Book +

8 Book -

3 Bank -

9 Book -


4 Bank -

10 Bank +

5 NA

11 Book -

6 Bank +

12 Bank -

BE7-6:
January

February

At the beginning:

0

At the beginning:

1000

Deposits recorded in books:

5000


Deposits recorded in books:

5600

Deposits recorded on bank statement: 4000

Deposits recorded on bank statement: 4600

At the end:

At the end:

© 2019 by Dr. Nguyen Huu Cuong

1000

“Innovation, Passion, and Diligence”

6

2000


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)


BE7-7:
November

December

Outstanding cheques at the beginning:
Cheques recorded in books:

0

Outstanding cheques at the beginning:1 200

27 100

Cheques recorded in books:

23 200

Cheques recorded on bank statement: 25 900

Cheques recorded on bank statement: 19 700

Outstanding cheques at the end:

Outstanding cheques at the end:

1 200

BE7-8:

a) Kashechewan Inc. corrects by reducing the cash $90
The bank adds back to the bank balance $415
b) Debit payable 90
Credit cash 90

BE7-9:
On 30th june, cash balance: 18 920
Cash receipts:

21 700

Cash payments:

24 300

On 31st July, cash balance: 16 320

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

7

4 700


44K06.
1

Financial Accounting 1 –

ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

BE7-10:
Balance per bank statement: 19,260
Add:
deposits in transit

1,450

Deduct:
outstanding cheques

3,630

 Adjusted cash balance per bank: 17,080

Balance per books :

16,320

Add:
EFT collections

2,170

Deduct:
NSF cheque


1,270

NSF fee

50

bank services charges

90

 Adjusted cash balance per books: 17,080

BE7-11:
Debit account cash 2,170
Credit account receivable 2,170

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

8


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)


Debit account expense 90
Credit account cash 90

Debit account receivable 1,320
Credit account cash 1,320

Chapter 8 "Reporting and Analysing Receivables"

BE8-2
July 1

July 9

Debit account Receivable $58000

Debit cash $50568

Credit sale Revenue $58000

Debit sale discount $1032

Debit cost of goods sold $32000

Credit account receivable $51600

Credit inventory $32000
Aug 1
July 8


Debit note Receivable $51600

Debit sale return $6400

Credit account receivable $51600

Credit account Receivable $6400
Debit inventory $4320

Sep 1

Credit cost of goods sold $4320

Debit cash $52632
Credit note receivable $51600
Credit interest receivable $1032

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

9


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT

(Chapter 2)

BE8-3
April 28
Debit account Receivable
Credit sale Revenue
Debit cost of goods sold
Credit Inventory

$26000
$26000
$18000
$18000

May 1
Debit account Receivable
Credit sale Revenue
Debit cost of goods sold
Credit inventory

$35000
$35000
$24000
$24000

May 3
Debit sale return
Credit account Receivable
Debit inventory
Credit cost of goods sold


$1200
$1200
$850
$850

May 6
Debit cash
Debit sale discount
Credit account receivabe

$24304
$496
$24800

June 1
Debit note Receivable
Credit account receivable

$35000
$35000

July 1
Debit cash
Credit note receivable
Credit interest receivable

$35525
$35000
$525


BE8-4
Chiu Corp
Account receivable
Debit
Credit

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

10


44K06.
1
1 800
1 100

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

7 000

Elbaz Inc.
Account receivable
Debit
Credit

6 000
4 000

2 000

Elbaz Inc.
Account receivable
Debit
Credit
1 800
6 600
3 700
5 100

7 000
2 000
3 700

BE8-5
a)
14 520
12 400
17 920
Total uncollectible : 44 840
b)Adjusted = 44 840 - 13 175 = 31 665
Debit bad debt expense
$31665
Credit allowance for doubtful account $31665
c)Adjusted = 44 840 + 8 920 = 53 760
Debit bad debt expense

$31665
Credit allowance for doubtful account $31665
BE8-6
a)
3 600
4 800
© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

11


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

7 200
8 000
Total uncollectible : 23 680
b)Adjusted = 23 680 – 3 600 = 23 080
Debit bad debt expense
23 080
Credit allowance for doubtful account 23 080
c)Adjusted = 23 680 + 5 400 = 29 080
Debit bad debt expense

29 080
Credit allowance for doubtful account 29 080
BE8-7
Debit account receivable

$480000

Credit Allowance for doubtful account

$480000

account receivable
Debit
480 000
469 000

credit
11 000

Allowance for doubtful account
Debit
credit
11 000
29 000
18 000

Account receivable
Allowance for doubtful account
Carrying amount


before write off
480 000
29 000
451 000

after write off
469 000
18 000
451 000

BE8-8
Debit account receivable

$11000

Credit allowance for doubtful account

© 2019 by Dr. Nguyen Huu Cuong

$11000
“Innovation, Passion, and Diligence”

12


44K06.
1

Financial Accounting 1 –
ACC2001

CHAPTER ASSIGNMENT
(Chapter 2)

Debit cash

$11000

Credit Account receivable

$11000

BE8-9
August 1
Debit note Receivable
Credit account receivable

$26000
$26000

August 31
Debit interest receivable $1560
Credit interest revenue
$1560
Sept 31
Debit interest receivable
Credit interest revenue

$1560
$1560


Oct 1
Debit cash $29120
Credit interest receivable
Credit note Receivable

$3120
$26000

BE8-10
Jan 2
Debit account Receivable $48000
Credit sale Revenue
$48000
Debit cost of goods sold $32000
Credit inventory

$32000

Feb 1
Debit note receivable

$48000

Credit account receivable

© 2019 by Dr. Nguyen Huu Cuong

$48000
“Innovation, Passion, and Diligence”


13


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

Apr 30
Debit interest receivable

480000 . 3/12 .7% = $840

Credit interest revenue

$840

May 1
Debit interest receivable

$280

Credit interest revenue

$280

June 1

Debit interest receivable $280
Credit interest revenue

$280

July 1
Debit cash

$49400

Credit note Receivable

$48000

Credit interest receivable

$840

Credit interest Revenue

$560

BE8-11
April 1
Debit note receivable
Credit sale revenue
Debit cost of goods sold

© 2019 by Dr. Nguyen Huu Cuong


$10000
$10000
$6000
“Innovation, Passion, and Diligence”

14


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

Credit inventory
Dec 31
Debit interest receivable
Credit interest revenue
1/1
Debit interest receivable
Credit interest revenue
2/1
Debit interest receivable
Credit interest revenue
3/1
Debit interest receivable
Credit interest revenue
4/1

Debit cash
Credit note Receivable
Credit interest receivable
Credit interest Revenue

$6000
$10000. 9% .9/12 = $675
$675
$75
$75
$75
$75
$75
$75
$ 10900
$10000
$675
$225

BE8-13
Current asset
Account Receivable

$470000

Less Allowance for doubtful account

$30000

Carrying amount


$440000

Cash

$150000

Inventory

$380000

Notes receivable—due November 1, 2018

$300000

Prepaid rent

$ 8,000

Sales tax recoverable

$ 38,000

Held for trading investments

$ 330,000

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”


15


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

Non current Asset
Notes receivable—due April 1, 2021

© 2019 by Dr. Nguyen Huu Cuong

$ 400,000

“Innovation, Passion, and Diligence”

16


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT

(Chapter 2)

EXERCISES
Financial Accounting: Tools for Decision-Making, 7th Canadian Edition (Kimmel P.D. et
al., 2017)
Chapter 7 "Internal Control and Cash"

E7-5:
(a)
On 31st August, cash balance: 34.780
Add:
EFT payment

2,600

Deposits

199,680

Less:
Cheques

176,978

Salaries

39,170

On 30th September, cash balance: 20,912
(b)

Debit account cash 2,600

Debit account receivable 176,978

Credit account receivable 2,600

Credit account cash 176,978

Debit account cash 199,680

Debit account payable to employees 39,170

Credit account receivable 199,680

Credit account cash 39,170

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

17


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)


E7-6:
Item

Bank
Add
(Credit)

Books
Deduct
(Debit)

Add
(Credit)

Deduct
(Debit)

Not
Applicable

2

x

3

x

4


x

5
6

Journal
Entry
Required

x
x

7

x

8

x

9

x

10

x

E7-7:

Deposits in transit on 30th June:
Deposits in transit in books:

2 000
14 750

Deposits in transit on bank statement: 15 820
Deposits in transit on 31st July:

Deposits in transit on 31st July:

© 2019 by Dr. Nguyen Huu Cuong

930

930
“Innovation, Passion, and Diligence”

18


44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

Deposits in transit in books:


22 900

Deposits in transit on bank statement: 22 500
Deposits in transit on 31st August:

1 330

Outstanding cheques on 30th June:

570

Cheques in books:

18 200

Cheques on bank statement:

17 200

Outstanding cheques on 31st July:

1 570

Outstanding cheques on 31st July:

1 570

Cheques in books:


22 700

Cheques on bank statement:

23 520

Outstanding cheques on 31st August:

750

E7-8:
Balance per bank statement: 10 670
Add:
deposits in transit

1 968

Deduct:
outstanding cheques

2 359

 Adjusted cash balance per bank: 10 279

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

19



44K06.
1

Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

Balance per books :

8 953

Add:
EFT

1 276

Error

90

Deduct:
bank services charges

40

 Adjusted cash balance per books: 10 279
Debit account cash 1 276
Credit account receivable 1 276


Debit account cash 90
Credit account receivable 90

Debit account expense 40
Credit account cash 40

E7-9:
(a) deposits in transit : 31st May: 7 820
(b) outstanding cheques: 003: 1 675
005: 360
007: 2 130

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

20


44K06.
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Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)
008: 525

(c) 31st May : 7 820

(d) cash balance per books = 6 106 + 37 470 – 26 819 = 16 757
(e)
Balance per bank statement: 6,106
Add:
deposits in transit

7,820

error

6,106

Deduct:
outstanding cheques

4,690

 Adjusted cash balance per bank: 15,342

Balance per books :

16 757

Add:
Deduct:
NSF

1,350

NSF fee


25

Bank services charges

40

 Adjusted cash balance per books: 15,342

Chapter 8 "Reporting and Analysing Receivables"

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

21


44K06.
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Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

E8-1
Compton’s books
Jan 6
Debit account receivable

Credit sale revenue
Debit cost of goods sold
Credit inventory
Jan 15
Debit cash
$44296
Debit sale discount $904
Credit Account receivable

$45200
$45200
$26500
$26500

$45200

Singh’s books
Jan 6
Debit inventory $45200
Account Payable
$45200
Jan 15
Debit account payable $45200
Credit cash
$904
Credit purchased discount
$44296
E8-3
a) the adjusting entry at December 31 = 31 600
b) the adjusting entry at December 31 = 38 400


E8-4
(a)
5 200
5 040
10 200
12 800
Total uncollectible : 33 240

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

22


44K06.
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Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

(b) adjusted = 33 240 – 8 800 = 24 440
Debit bad debt expense
24440
Credit allowance for doubtful account 24440
(c) Carrying amount = 336 760


E8-5
(a)
Debit bad debt expense
$18800
Credit allowance for doubtful account $18800
Debit allowance for doubtful account
Credit account receivable

$1900
$1900

Debit cash
$1900
Credit account receivable
$1900
Debit account receivable $1900
Credit allowance for doubtful account $1900
(b)
account receivable
Debit
300 000
300 000

account allowance for doubtful
Debit
credit
2 000
18 800
16 800


credit

Carrying amount = 283 200

account receivable
Debit
300 000
298 100

account allowance for doubtful
Debit
credit
2 000
1 900
3 900

credit
1 900

Carrying amount = 302 000

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”

23


44K06.
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Financial Accounting 1 –
ACC2001
CHAPTER ASSIGNMENT
(Chapter 2)

account receivable
Debit
300 000
1 900
298 100

account allowance for doubtful
Debit
credit
2 000
18 800
1900
1 900
16 800

credit
1 900
1 900

Carrying amount = 281 300

© 2019 by Dr. Nguyen Huu Cuong

“Innovation, Passion, and Diligence”


24


E8-7
Debit note receivable
Credit cash
Debit note Receivable
Credit sale revenue

$116000
$116000
$22600
$22600

Debit cost of goods sold
Credit inventory

$13200

Debit note receivable
Credit account receivable

$24000

$13200
$24000

Debit cash
$24226

Credit note receivable
$24000
Credit interest receivable
$226
Debit interest receivable

$116000 x 9% x 4/12 = $3480
$24000 x 6% x 2.5/12 = $300

Credit interest revenue

$3780

Debit bad debt expense
$18200
Credit allowance for doubtful account $18200

E8-10
statement of financial position
Current asset
Account receivable
Less Allowance for doubtful accounts
Carrying amount
Notes receivable (current)
Less Allowance for doubtful notes (current)
Carrying amount
Sales tax recoverable
Prepaid insurance
Inventory
Cash

Advances to employees
Non asset
Notes receivable (non-current)

$18200
$ 1300
$16900
$ 25000
$5000
$20000
$ 3150
$1500
$26400
$7500
$2900
$75000