Question

True / False1. Cash equivalents are very liquid, high-risk short-term investments.2. A purchase order is a

document that provides evidence of the receipt of goods purchased.3. EDI is a benefit to accounting because it connects purchasers to suppliers via software.4. The direct write-off method of accounting for bad debt is GAAP preferred.5. The percent of sales approach to estimating uncollectible accounts is known as the income statement approach.6. The allowance for doubtful accounts (aka allowance for uncollectible accounts) is a contra-equity account.7. The individual responsible for the accounting system and financial statements of a company is known as the controller.8. Money orders and traveler’s checks are listed as cash equivalents on a company’s financial statements.9. The aging method, like the percent of sales method, for estimating uncollectible accounts is also known as an income statement approach10. The maker of a note payable is also called the debtor.11. The payee of a note payable is also called the creditor.12. Receivable collection period measures whether or not a company is going concern.

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