Exam 7: Reporting and Analyzing Receivables

Young Company lends Dobson industries $40,000 on August 1, 2017, accepting a 9-month, 9% interest note. If Young prepares its financial statements as of December 31, 2017, what adjusting entry must it make?

In the table below the information for four companies is provided. Company Accounts Receivable turnover Average collection period Martin 13.9 26.3 Lewis 13.3 27.4 D anforth 10.4 35.1 Gamer 14.5 25.2 Industry Average 13.0 28.1 If Garner's net credit sales are $435,000, what are its average net accounts receivable?

Trade receivables can be an account receivable or a note receivable.

The direct write-off method is acceptable for financial reporting purposes only if the bad debt losses are insignificant.

The direct write-off method of accounting for uncollectible accounts

IFRS requires loans and receivables to be recorded at

Which requires a two-tiered approach to test whether the value of loans and receivables are impaired?

The Allowance for Doubtful Accounts is necessary because

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when

The sale of receivables by a business

A high accounts receivable turnover ratio indicates

ABC Company accepted a national credit card for a $9,000 purchase. The cost of the goods sold is $7,200. The credit card company charges a 3% fee. What is the impact of this transaction on net operating income?

The maturity value of a $60,000, 9%, 40-day note receivable dated July 3 is

If the amount of uncollectible account expense is overstated at year end

An analysis and aging of the accounts receivable of Watts Company at December 31 reveal these data: What is the cash realizable value of the accounts receivable at December 31 after adjustment?

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $44,000. If the balance of the Allowance for Doubtful Accounts is $9,000 debit before adjustment, what is the amount of bad debt expense for that period?

When an account receivable that was previously written off is collected, it is first necessary to reverse the entry to reinstate the customer's account before recording the collection.

In a promissory note, the party to whom payment is to be made is called the maker.

Which one of the following is not a principle of sound accounts receivable management?

A concentration of credit risk is a threat of nonpayment from a single customer or class of customers that could adversely affect the financial health of the company.