Question 1

A receivable is an amount due from another party.

Accepted Answer

A) True 
 B)False

Question 2

For legal reasons,it is not advisable to accept a note receivable in exchange for an overdue account receivable.

Accepted Answer

A) True 
 B)False

Question 3

The person that borrows money and signs a promissory note is called the maker.

Accepted Answer

A) True 
 B)False

Question 4

The following data are taken from the comparative balance sheets of Grayling Company.Compute and interpret its accounts receivable turnover for Year 2.Competitors average a turnover of 7.5.How is the company doing in relation to its competitors?
 $\begin{array}{lrr} 
& \text { Year 2 } & \text { Year 1 } \
\text { Accounts receivable, net } & 180,230 & 220,450 \
\text { Net sales } & 1,500,750 & 1,495,600
\end{array}$

Accepted Answer

Accounts Receivable Turnover = Net Sales

Question 5

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

Accepted Answer

A) True 
 B)False

Question 6

Companies can report credit card expense as a reduction in net sales or as a selling expense.

Accepted Answer

A) True 
 B)False

Question 7

Credit sales are recorded by increasing (crediting)Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 8

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 9

On July 9,Mifflin Company receives an $8,500,90-day,8% note from customer Payton Summers as payment on account.What entry should be made on July 9 to record receipt of the note?

Accepted Answer

A) Debit Accounts Receivable $8,500; credit Sales $8,500. 
B) Debit Notes Receivable $8,670; credit Sales $8,670. 
C) Debit Notes Receivable $8,500; credit Accounts Receivable $8,500. 
D) Debit Notes Receivable $8,500; credit Sales $8,500. 
E) Debit Notes Receivable $8,725; credit Interest Revenue $225; credit Accounts Receivable $8,500. 
A) Debit Accounts Receivable $8,500; credit Sales $8,500. 
B) Debit Notes Receivable $8,670; credit Sales $8,670. 
C) Debit Notes Receivable $8,500; credit Accounts Receivable $8,500. 
D) Debit Notes Receivable $8,500; credit Sales $8,500. 
E) Debit Notes Receivable $8,725; credit Interest Revenue $225; credit Accounts Receivable $8,500.

Question 10

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 net 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 11

The amount due on the maturity date of a $6,000,60-day 4%,note receivable is: (Use 360 days a year.)

Accepted Answer

A) $6,000. 
B) $6,240. 
C) $5,760. 
D) $6,040. 
E) $5,960. 
A) $6,000. 
B) $6,240. 
C) $5,760. 
D) $6,040. 
E) $5,960.

Question 12

A company has net sales of $1,200,000 and average accounts receivable of $400,000.What is its accounts receivable turnover for the period?

Accepted Answer

A) 0.33 
B) 5.00 
C) 20.0 
D) 73.0 
E) 3.0 
A) 0.33 
B) 5.00 
C) 20.0 
D) 73.0 
E) 3.0

Question 13

A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts.Experience suggests that 4% of outstanding receivables are uncollectible.The current balance (before adjustments)in the allowance for doubtful accounts is an $800 debit.The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

Accepted Answer

A) $3,600 
B) $3,568 
C) $3,632 
D) $2,800 
E) $4,400 
A) $3,600 
B) $3,568 
C) $3,632 
D) $2,800 
E) $4,400

Question 14

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

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 15

Federal laws prohibit the selling of accounts receivable to factors.

Accepted Answer

A) True 
 B)False

Question 16

________ refers to the expected proceeds from converting an asset into cash.

Accepted Answer

The answer of ________ refers to the expected proceeds from...

Question 17

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

Accepted Answer

July = 31 − 12 = 19 days,Augus

Question 18

The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense reports the following selected amounts:   All sales are made on credit.Based on past experience,the company estimates 3.5% of ending account receivable 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 $13,975; credit Allowance for Doubtful Accounts $13,975. 
B) Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225. 
C) Debit Bad Debts Expense $16,475; credit Allowance for Doubtful Accounts $16,475. 
D) Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350. 
E) Debit Bad Debts Expense $17,350; credit Allowance for Doubtful Accounts $17,350. 
A) Debit Bad Debts Expense $13,975; credit Allowance for Doubtful Accounts $13,975. 
B) Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225. 
C) Debit Bad Debts Expense $16,475; credit Allowance for Doubtful Accounts $16,475. 
D) Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350. 
E) Debit Bad Debts Expense $17,350; credit Allowance for Doubtful Accounts $17,350.

Question 19

The________ method of accounting for bad debts records the loss from an uncollectible account receivable at the time it is determined to be uncollectible (and not before).

Accepted Answer

The answer of The________ method of accounting for bad debts...

Question 20

When using the allowance method of accounting for uncollectible accounts,the entry to record the estimated bad debts expense is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts.

Accepted Answer

A) True 
 B)False

A receivable is an amount due from another party.

For legal reasons,it is not advisable to accept a note receivable in exchange for an overdue account receivable.

The person that borrows money and signs a promissory note is called the maker.

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

Companies can report credit card expense as a reduction in net sales or as a selling expense.

Credit sales are recorded by increasing (crediting)Accounts Receivable.

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

On July 9,Mifflin Company receives an $8,500,90-day,8% note from customer Payton Summers as payment on account.What entry should be made on July 9 to record receipt of the note?

The amount due on the maturity date of a $6,000,60-day 4%,note receivable is: (Use 360 days a year.)

A company has net sales of $1,200,000 and average accounts receivable of $400,000.What is its accounts receivable turnover for the period?

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

Federal laws prohibit the selling of accounts receivable to factors.

________ refers to the expected proceeds from converting an asset into cash.

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

The________ method of accounting for bad debts records the loss from an uncollectible account receivable at the time it is determined to be uncollectible (and not before).

When using the allowance method of accounting for uncollectible accounts,the entry to record the estimated bad debts expense is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 7: Reporting and Analyzing Receivables

A receivable is an amount due from another party.

For legal reasons,it is not advisable to accept a note receivable in exchange for an overdue account receivable.

The person that borrows money and signs a promissory note is called the maker.

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

Companies can report credit card expense as a reduction in net sales or as a selling expense.

Credit sales are recorded by increasing (crediting)Accounts Receivable.

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

On July 9,Mifflin Company receives an $8,500,90-day,8% note from customer Payton Summers as payment on account.What entry should be made on July 9 to record receipt of the note?

The amount due on the maturity date of a $6,000,60-day 4%,note receivable is: (Use 360 days a year.)

A company has net sales of $1,200,000 and average accounts receivable of $400,000.What is its accounts receivable turnover for the period?

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

Federal laws prohibit the selling of accounts receivable to factors.

________ refers to the expected proceeds from converting an asset into cash.

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

The________ method of accounting for bad debts records the loss from an uncollectible account receivable at the time it is determined to be uncollectible (and not before).

When using the allowance method of accounting for uncollectible accounts,the entry to record the estimated bad debts expense is a debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters