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

The aging-of-receivable method focuses on matching bad debt expense to the revenues that generated those revenues.

What is the normal journal entry for recording bad debt expense?

The following company information is available: Average accounts receivable \ 500,000 Average inventories 130,000 Average accounts payable 140,000 Net sales 3,000,000 Cost of goods sold 1,600,000 Purchases 1,140,000 What is the company's inventory turnover ratio? (Round your answer to one decimal place, X.X.)

To be recognized as a sale under IFRS, factored receivables do not have to be isolated.

The following company information is available: Days sales outstanding 28 Days sales in inventory 17 Days accounts payable outstanding 24 How long is the company's operating cycle?

Bad debt expense represents the amount of ________.

Fraxon Inc. made a $40,000 sale on account with terms of 1/15, n/30. If the company uses the gross method, which of the following will be included in the journal entry to record customer payment within the discount period?

Discounting a note receivable is most similar to ________.

In which of the following transactions is a "hold back" feature applicable?

What are the objectives of the allowance method of accounting for uncollectible receivables?

Pledged receivables are reported as current assets while assigned receivables are reported as non-current assets. The pledged and assigned receivables are used as collateral for a long-term obligation.

The following company information is available: Average accounts receivable \ 700,000 Average inventories 140,000 Average accounts payable 130,000 Net sales 1,000,000 Cost of goods sold 1,600,000 Purchases 1,160,000 What is the company's operating cycle (in days)? (Assume all sales are made on credit. Round your answer to the nearest day.)

On December 31, 2018, Perly Company performed environmental consulting services for Brocade Corporation. Brocade was short of cash, so Perly agreed to accept a $300,000 noninterest-bearing note due on December 31, 2020. Brocade is somewhat of a credit risk and Perly determines that 10% is an appropriate market rate. Use the present value of $1 table below: Periods 10\% 11\% 1 .90909 .90090 2 .82645 .81162 3 .75132 .73119 4 .68301 .65873 a. Prepare the journal entry to record the receipt of the note on December 31, 2018. b. Prepare the adjusting entry on December 31, 2019. Use two decimal places. c. Prepare the journal entry to record the receipt of the payment on December 31, 2020.

Which of the following is not a requirement for recognizing that a transaction can be recorded as a sale of receivables?

What disclosures concerning accounts receivable are required?

Under what circumstances may cash in a bank account be classified as a noncurrent asset?

The holder of a non-interest-bearing note does not recognize any interest revenue over the term of the note.

Which of the following would be classified as a cash equivalent?

According to U.S. GAAP, checks written in excess of the balance of a bank account are deducted from the cash account on the balance sheet.

Monochrome Printers established a $500 petty cash imprest fund at the beginning of the year. During the year, the following expenditures were paid from the petty cash fund: Postage \ 200 Parking and Tolls 250 Supplies 30 At the end of the year, there was $10 remaining in the fund. Prepare the journal entries to record the current year's activity in the petty cash fund including the establishment of the fund and the expenses of the fund.