Question 1

The quality of receivables refers to:

Accepted Answer

A) The creditworthiness of sellers. 
B) The speed of collection. 
C) The likelihood of collection without loss. 
D) Sales turnover. 
E) The interest rate. 
A) The creditworthiness of sellers. 
B) The speed of collection. 
C) The likelihood of collection without loss. 
D) Sales turnover. 
E) The interest rate. C

Question 2

Which of the following is not true about the Allowance for Doubtful Accounts?

Accepted Answer

A) It is a contra asset account. 
B) It is used instead of reducing accounts receivable directly. 
C) It is debited when uncollectible accounts are written off. 
D) It is a liability account. 
E) It is credited when bad debts expense is estimated and recorded. 
A) It is a contra asset account. 
B) It is used instead of reducing accounts receivable directly. 
C) It is debited when uncollectible accounts are written off. 
D) It is a liability account. 
E) It is credited when bad debts expense is estimated and recorded. D

Question 3

Lemming makes an $18,750,120-day,8% cash loan to Notions Co.on November 2.Lemming's end-of-period adjusting entry on December 31 should be:

Accepted Answer

A) Debit Cash for $250;credit Notes Receivable $250. 
B) Debit Interest Revenue $500;credit Notes Receivable $500. 
C) Debit Interest Receivable $250;credit Interest Revenue $250. 
D) Debit Interest Receivable $500;credit Interest Revenue $500. 
E) Debit Notes Receivable $500;credit Interest Revenue $500. 
A) Debit Cash for $250;credit Notes Receivable $250. 
B) Debit Interest Revenue $500;credit Notes Receivable $500. 
C) Debit Interest Receivable $250;credit Interest Revenue $250. 
D) Debit Interest Receivable $500;credit Interest Revenue $500. 
E) Debit Notes Receivable $500;credit Interest Revenue $500. C

Question 4

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is:

Accepted Answer

A) $10,450 
B) $10,900 
C) $10,075 
D) $11,800 
E) $10,300 
A) $10,450 
B) $10,900 
C) $10,075 
D) $11,800 
E) $10,300

Question 5

A company uses the percent of sales method to determine its bad debts expense.At the end of the current year,the company's unadjusted trial balance reported the following selected amounts:   All sales are made on credit.Based on past experience,the company estimates 0.6% of credit sales to be uncollectible.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Accepted Answer

A) Debit Bad Debts Expense $2,130;credit Allowance for Doubtful Accounts $2,130. 
B) Debit Bad Debts Expense $2,630;credit Allowance for Doubtful Accounts $2,630. 
C) Debit Bad Debts Expense $4,300;credit Allowance for Doubtful Accounts $4,300. 
D) Debit Bad Debts Expense $4,800;credit Allowance for Doubtful Accounts $4,800. 
E) Debit Bad Debts Expense $5,300;credit Allowance for Doubtful Accounts $5,300. 
A) Debit Bad Debts Expense $2,130;credit Allowance for Doubtful Accounts $2,130. 
B) Debit Bad Debts Expense $2,630;credit Allowance for Doubtful Accounts $2,630. 
C) Debit Bad Debts Expense $4,300;credit Allowance for Doubtful Accounts $4,300. 
D) Debit Bad Debts Expense $4,800;credit Allowance for Doubtful Accounts $4,800. 
E) Debit Bad Debts Expense $5,300;credit Allowance for Doubtful Accounts $5,300.

Question 6

Converting receivables to cash before they are due is usually done by either (1)_______________________ or (2)________________________________.
answers can appear in any order

Accepted Answer

selling them to a fa

Question 7

On July 9,Mifflin Company receives a $8,500,90-day,8% note from customer Payton Summers as payment on account.Compute the amount due at maturity for the note.

Accepted Answer

A) $8,628 
B) $8,192 
C) $8,613 
D) $8,500 
E) $8,670 
A) $8,628 
B) $8,192 
C) $8,613 
D) $8,500 
E) $8,670

Question 8

The _________________________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.

Accepted Answer

The answer of The _________________________ method of computing uncollectible accounts...

Question 9

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Accepted Answer

A) Protesting a note. 
B) Closing a note. 
C) Dishonoring a note. 
D) Discounting a note. 
E) Depreciating a note. 
A) Protesting a note. 
B) Closing a note. 
C) Dishonoring a note. 
D) Discounting a note. 
E) Depreciating a note.

Question 10

The ________________________ methods of computing uncollectible accounts use balance sheet relations to estimate bad debts-mainly the relation between accounts receivable and the allowance amount.

Accepted Answer

The answer of The ________________________ methods of computing uncollectible accounts...

Question 11

A supplementary record created to maintain a separate account for each customer is called the ________________________.

Accepted Answer

accounts r

Question 12

The account receivable turnover measures:

Accepted Answer

A) How long it takes to sell accounts receivable to a factor. 
B) How often,on average,receivables are received and collected during the period. 
C) The relation of cash sales to credit sales. 
D) How long it takes to sell merchandise inventory. 
E) All of the options are correct. 
A) How long it takes to sell accounts receivable to a factor. 
B) How often,on average,receivables are received and collected during the period. 
C) The relation of cash sales to credit sales. 
D) How long it takes to sell merchandise inventory. 
E) All of the options are correct.

Question 13

Felton Corporation purchased $4,000 in merchandise from Marita Co.Felton signed a 60-day,10%,$4,000 promissory note.Marita should record the sale with a journal entry debiting ____________________ for ________ and crediting __________________ for ________.
answers need to appear in this order

Accepted Answer

es receiva

Question 14

On November 19,Nicholson Company receives a $15,000,60-day,8% note from a customer as payment on account.What adjusting entry should be made on the December 31 year-end?

Accepted Answer

A) Debit Interest Receivable $1,200;credit Interest Revenue $1,200. 
B) Debit Interest Receivable $140;credit Interest Revenue $140. 
C) Debit Interest Receivable $200;credit Interest Revenue $200. 
D) Debit Interest Revenue $140;credit Interest Receivable $140. 
E) Debit Interest Revenue $200;credit Interest Receivable $200. 
A) Debit Interest Receivable $1,200;credit Interest Revenue $1,200. 
B) Debit Interest Receivable $140;credit Interest Revenue $140. 
C) Debit Interest Receivable $200;credit Interest Revenue $200. 
D) Debit Interest Revenue $140;credit Interest Receivable $140. 
E) Debit Interest Revenue $200;credit Interest Receivable $200.

Question 15

A company had net sales of $600,000,total sales of $750,000,and an average accounts receivable of $75,000.Its accounts receivable turnover equals:

Accepted Answer

A) .13 
B) .80 
C) 7.75 
D) 8.00 
E) 10.00 
A) .13 
B) .80 
C) 7.75 
D) 8.00 
E) 10.00

Question 16

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes)to report all relevant information?

Accepted Answer

A) Relevance. 
B) Full disclosure. 
C) Evaluation. 
D) Materiality. 
E) Matching. 
A) Relevance. 
B) Full disclosure. 
C) Evaluation. 
D) Materiality. 
E) Matching.

Question 17

At December 31,Yarrow Company reports the following results for its calendar year from the adjusted trial balance.   a.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 1.1% of credit sales.
b.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be .8% of total sales.
c.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 7.0% of year-end accounts receivable.

Accepted Answer

The answer of At December 31,Yarrow Company reports the following...

Question 18

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the collection of the note and interest at maturity should be:

Accepted Answer

A) Debit Cash for $25,000;credit Notes Receivable $25,000. 
B) Debit Cash $25,437.50;credit Interest Revenue $437.50;credit Notes Receivable $25,000. 
C) Debit Cash $25,437.50;credit Notes Receivable for $25,437.50. 
D) Debit Notes Payable $25,000;Debit Interest Expense $1,750;credit Cash $26,750. 
E) Debit Cash $26,750;credit Interest Revenue $1,750,credit Notes Receivable $25,000. 
A) Debit Cash for $25,000;credit Notes Receivable $25,000. 
B) Debit Cash $25,437.50;credit Interest Revenue $437.50;credit Notes Receivable $25,000. 
C) Debit Cash $25,437.50;credit Notes Receivable for $25,437.50. 
D) Debit Notes Payable $25,000;Debit Interest Expense $1,750;credit Cash $26,750. 
E) Debit Cash $26,750;credit Interest Revenue $1,750,credit Notes Receivable $25,000.

Question 19

A company receives a 10%,120-day note for $1,500.The total interest due on the maturity date is:

Accepted Answer

A) $50.00. 
B) $150.00. 
C) $75.00. 
D) $37.50. 
E) $87.50. 
A) $50.00. 
B) $150.00. 
C) $75.00. 
D) $37.50. 
E) $87.50.

Question 20

A credit sale of $5,275 to a customer would result in which of the following?

Accepted Answer

A) A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger. 
B) A credit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger. 
C) A debit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger. 
D) A credit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger. 
E) A credit to Sales and a credit to the customer's account in the accounts receivable subsidiary ledger. 
A) A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger. 
B) A credit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger. 
C) A debit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger. 
D) A credit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger. 
E) A credit to Sales and a credit to the customer's account in the accounts receivable subsidiary ledger.

Exam 9: Accounting for Receivables

The quality of receivables refers to:

Which of the following is not true about the Allowance for Doubtful Accounts?

Lemming makes an $18,750,120-day,8% cash loan to Notions Co.on November 2.Lemming's end-of-period adjusting entry on December 31 should be:

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is:

Converting receivables to cash before they are due is usually done by either (1)_______________________ or (2)________________________________. answers can appear in any order

On July 9,Mifflin Company receives a $8,500,90-day,8% note from customer Payton Summers as payment on account.Compute the amount due at maturity for the note.

The _________________________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

The ________________________ methods of computing uncollectible accounts use balance sheet relations to estimate bad debts-mainly the relation between accounts receivable and the allowance amount.

A supplementary record created to maintain a separate account for each customer is called the ________________________.

The account receivable turnover measures:

Felton Corporation purchased $4,000 in merchandise from Marita Co.Felton signed a 60-day,10%,$4,000 promissory note.Marita should record the sale with a journal entry debiting ____________________ for ________ and crediting __________________ for ________. answers need to appear in this order

On November 19,Nicholson Company receives a $15,000,60-day,8% note from a customer as payment on account.What adjusting entry should be made on the December 31 year-end?

A company had net sales of $600,000,total sales of $750,000,and an average accounts receivable of $75,000.Its accounts receivable turnover equals:

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes)to report all relevant information?

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the collection of the note and interest at maturity should be:

A company receives a 10%,120-day note for $1,500.The total interest due on the maturity date is:

A credit sale of $5,275 to a customer would result in which of the following?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

Filters

Converting receivables to cash before they are due is usually done by either (1)_ or (2)__________. answers can appear in any order

Felton Corporation purchased $4,000 in merchandise from Marita Co.Felton signed a 60-day,10%,$4,000 promissory note.Marita should record the sale with a journal entry debiting __________ for and crediting for . answers need to appear in this order