Exam 9: Short-Term Operating Assets: Cash and Receivables

The market rate is the interest rate that the holder of the note will receive.

Separation of duties is an internal control technique that requires all of the following except:

Vladulac Corporation began 2018 with accounts receivable of $180,000 and an allowance for uncollectible accounts of $13,000 (credit balance). Bad debt expense for the year was $25,000 and the ending balance in the allowance for uncollectible accounts account was $16,000. The accounts receivable turnover ratio for 2018 was 10.0. NOTE: This ratio was calculated using the average of gross accounts receivable in the denominator (that is, [$180,000 + year-end accounts receivable] divided by 2). The following additional information is also available: Inventory turnover ratio 8.0 Average inventory \ 150,000 Gross profit ratio 40 Required: a. What was the amount of accounts receivable written off during the year? b. What was the amount of cash collected from customers during the year? Assume that all sales are made on a credit basis and that there were no collections of previously written off receivables or sales returns.

The following company information is available: Average accounts receivable \ 500,000 Average inventories 130,000 Average accounts payable 110,000 Net sales 8,000,000 Cost of goods sold 1,200,000 Purchases 1,140,000 What is the company's days sales outstanding? (Assume all sales are made on credit. Round your answer to one decimal place, X.X.)

During the year, Liptom Company made an entry to write off a $4,000 uncollectible account. Before this entry was made, the balance in accounts receivable was $60,000 and the balance in the allowance account was $4,500 (normal balance). What is the net realizable value of accounts receivable after the write-off entry?

Danzig Inc. factors $10,000,000 of its accounts receivables without recourse for a finance charge of 4%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. What would be recorded by Danzig as a gain (loss) on the transfer of receivables?

Cash equivalents may include Treasury bills and certificates of deposit.

The length of time it takes a company to generate cash from its operations is called the ________.

Factored receivables sold without recourse are classified as a liability.

Gappule Corp. made a $30,000 sale on account with terms of 2/15, n/30. If the company uses the net method, which of the following will be included in the journal entry to record customer payment within the discount period?

The balance-sheet value of the asset Accounts Receivable (accounts receivable less the allowance for doubtful accounts) represents the amount of cash the company is expected to collect from its customers.

In which of the following situations are a company's receivables sold to another entity?

Which of the following would not be included when valuing cash and cash equivalents on the balance sheet?

What type of account is Allowance for Uncollectible Accounts?

What is a non-interest-bearing note? How does accounting for a short-term non-interest-bearing note differ from a short-term interest-bearing note?

What type of account is Discount on Note Receivable?

How does a note receivable differ from an account receivable?

When the market interest rate on a short-term note receivable is greater than the stated rate, ________.

Net realizable value (NRV) describes the estimated amount of a company's expected cost of uncollectible accounts.

Complete the following disclosures of trade accounts receivables from Cheris Corp.'s notes to the financial statements. Trade Receivables Year (Ending 12/31) Trade Receivables \ 4,500 Allowance Net Receivables \3 ,705 Allowance for Uncollectible Accounts January 1 \ 145 Bad Debt Expense 425 Write-off December 31 \ 180