Question 1

IFRS

Accepted Answer

A) implies that receivables with different characteristics should be reported separately. 
B) requires that receivables with different characteristics should be reported separately. 
C) implies that receivables with different characteristics should be reported as one unsegregated amount. 
D) requires that receivables with different characteristics should be reported as one unsegregated amount. 
A) implies that receivables with different characteristics should be reported separately. 
B) requires that receivables with different characteristics should be reported separately. 
C) implies that receivables with different characteristics should be reported as one unsegregated amount. 
D) requires that receivables with different characteristics should be reported as one unsegregated amount.

Question 2

Bad Debt Expense is reported on the income statement as

Accepted Answer

A) part of cost of goods sold. 
B) an expense subtracted from net sales to determine gross profit. 
C) an operating expense. 
D) a contra revenue account. 
A) part of cost of goods sold. 
B) an expense subtracted from net sales to determine gross profit. 
C) an operating expense. 
D) a contra revenue account.

Question 3

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

Accepted Answer

A) total assets decrease. 
B) total assets are unchanged. 
C) net income is unchanged. 
D) liabilities decrease. 
A) total assets decrease. 
B) total assets are unchanged. 
C) net income is unchanged. 
D) liabilities decrease.

Question 4

One might infer from a debit balance in Allowance for Doubtful Accounts that

Accepted Answer

A) a posting error has been made. 
B) more accounts have been written off than had been estimated. 
C) the direct method is being used. 
D) Bad Debt Expense has been overestimated. 
A) a posting error has been made. 
B) more accounts have been written off than had been estimated. 
C) the direct method is being used. 
D) Bad Debt Expense has been overestimated.

Question 5

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a

Accepted Answer

A) debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts. 
B) debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts. 
C) debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable. 
D) debit to Loss on Credit Sales and a credit to Accounts Receivable. 
A) debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts. 
B) debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts. 
C) debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable. 
D) debit to Loss on Credit Sales and a credit to Accounts Receivable.

Question 6

The receivable that is usually evidenced by a formal instrument of credit is a(n)

Accepted Answer

A) trade receivable. 
B) note receivable. 
C) accounts receivable. 
D) income tax receivable. 
A) trade receivable. 
B) note receivable. 
C) accounts receivable. 
D) income tax receivable.

Question 7

Thompson Corporation's unadjusted trial balance includes the following balances (assume normal balances): - Accounts receivable $\quad \quad \quad \quad \quad \$ 1,865,000$
- Allowance for doubtful accounts $\quad \$ 35,500$ Bad debts are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record?

Accepted Answer

A) $119,400 
B) $76,400 
C) $74,270 
D) $114,030 
A) $119,400 
B) $76,400 
C) $74,270 
D) $114,030

Question 8

Wilton sells softball equipment. On November 14, they shipped $4,000 worth of softball uniforms to Paola Middle School, terms 2/10, n/30. On November 21, they received an order from Douglas High School for $2,400 worth of custom printed bats to be produced in December. On November 30, Paola Middle School returned $400 of defective merchandise. Wilton has received no payments from either school as of month end. What amount will be recognized as net accounts receivable on the balance sheet as of November 30?

Accepted Answer

A) $6,400 
B) $6,000 
C) $4,000 
D) $3,600 
A) $6,400 
B) $6,000 
C) $4,000 
D) $3,600

Question 9

A note receivable is a written promise by the maker to the payee to pay a specified amount of money at a definite time.

Accepted Answer

A) True 
 B)False

Question 10

When using the allowance method year-end adjustments for bad debt expense must be made.

Accepted Answer

A) True 
 B)False

Question 11

The bookkeeper recorded the following journal entry   Which one of the following statements is false?

Accepted Answer

A) This entry is only prepared on the last day of the accounting period. 
B) There should be written authorization for this transaction from someone who does not have responsibilities related to recording cash. 
C) There could be a violation of internal control policies. 
D) James' account was written off because it was determined to be uncollectible. 
A) This entry is only prepared on the last day of the accounting period. 
B) There should be written authorization for this transaction from someone who does not have responsibilities related to recording cash. 
C) There could be a violation of internal control policies. 
D) James' account was written off because it was determined to be uncollectible.

Question 12

All of the following statements regarding the financial statement presentation of receivables are true except:

Accepted Answer

A) Short-term receivables are reported in the current assets section of the balance sheet. 
B) The gross amount of receivables less the allowance for doubtful accounts is equal to the net receivables. 
C) Short-term receivables are reported above the short-term investments in the balance sheet. 
D) Companies report bad debts expense under "Selling Expenses" in the operating expenses section of the income statement. 
A) Short-term receivables are reported in the current assets section of the balance sheet. 
B) The gross amount of receivables less the allowance for doubtful accounts is equal to the net receivables. 
C) Short-term receivables are reported above the short-term investments in the balance sheet. 
D) Companies report bad debts expense under "Selling Expenses" in the operating expenses section of the income statement.

Question 13

The term "receivables" refers to

Accepted Answer

A) amounts due from individuals or companies. 
B) merchandise to be collected from individuals or companies. 
C) cash to be paid to creditors. 
D) cash to be paid to debtors. 
A) amounts due from individuals or companies. 
B) merchandise to be collected from individuals or companies. 
C) cash to be paid to creditors. 
D) cash to be paid to debtors.

Question 14

Dorman Company had the following items to report on its balance sheet: $\begin{array}{|l|r|}
\hline \text { Em ployee advances } & \$ 1,580 \
\hline \text { Amounts owed by customers for the sale of services (due in 30 days) } & 3,050 \
\hline \text { Refundable income taxes } & 1,120 \\hline \text { Interest receivable } & 950 \
\hline \text { Accepted a formal instrum ent of credit for services (due in 18 months) } & 2,220 \
\hline \text { A loan to company president } & 10,000 \
\hline \text { Dishonored a note for principal and interest which will eventually be collected } & 1,380 \
\hline
\end{array}$ Based on this information, what amount should appear in the "Other Receivables" category?

Accepted Answer

A) $20,300 
B) $13,650 
C) $15,030 
D) $17,250 
A) $20,300 
B) $13,650 
C) $15,030 
D) $17,250

Question 15

A promissory note

Accepted Answer

A) is not a formal credit instrument. 
B) may be used to settle an accounts receivable. 
C) has the party to whom the money is due as the maker. 
D) cannot be factored to another party. 
A) is not a formal credit instrument. 
B) may be used to settle an accounts receivable. 
C) has the party to whom the money is due as the maker. 
D) cannot be factored to another party.

Question 16

When an account is written off using the allowance method, the

Accepted Answer

A) cash realizable value of total accounts receivable will increase. 
B) net accounts receivable will decrease. 
C) allowance account will increase. 
D) net accounts receivable will stay the same. 
A) cash realizable value of total accounts receivable will increase. 
B) net accounts receivable will decrease. 
C) allowance account will increase. 
D) net accounts receivable will stay the same.

Question 17

Windsor Corporation sells its goods on terms of 2/10, n/30. It has an accounts receivable turnover of 6. What is its average collection period (days)?

Accepted Answer

A) 90 
B) 40 
C) 61 
D) 48 
A) 90 
B) 40 
C) 61 
D) 48

Question 18

The accounts receivable turnover ratio is computed by dividing total sales by the average net receivables during the year.

Accepted Answer

A) True 
 B)False

Question 19

Under the allowance method, Bad Debt Expense is debited when an account is deemed uncollectible and must be written off.

Accepted Answer

A) True 
 B)False

Question 20

If a retailer accepts a national credit card such as Visa, the retailer must maintain detailed records of customer accounts.

Accepted Answer

A) True 
 B)False

IFRS

Bad Debt Expense is reported on the income statement as

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

One might infer from a debit balance in Allowance for Doubtful Accounts that

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a

The receivable that is usually evidenced by a formal instrument of credit is a(n)

A note receivable is a written promise by the maker to the payee to pay a specified amount of money at a definite time.

When using the allowance method year-end adjustments for bad debt expense must be made.

The bookkeeper recorded the following journal entry Which one of the following statements is false?

All of the following statements regarding the financial statement presentation of receivables are true except:

The term "receivables" refers to

A promissory note

When an account is written off using the allowance method, the

Windsor Corporation sells its goods on terms of 2/10, n/30. It has an accounts receivable turnover of 6. What is its average collection period (days)?

The accounts receivable turnover ratio is computed by dividing total sales by the average net receivables during the year.

Under the allowance method, Bad Debt Expense is debited when an account is deemed uncollectible and must be written off.

If a retailer accepts a national credit card such as Visa, the retailer must maintain detailed records of customer accounts.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 7: Reporting and Analyzing Receivables

IFRS

Bad Debt Expense is reported on the income statement as

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

One might infer from a debit balance in Allowance for Doubtful Accounts that

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a

The receivable that is usually evidenced by a formal instrument of credit is a(n)

A note receivable is a written promise by the maker to the payee to pay a specified amount of money at a definite time.

When using the allowance method year-end adjustments for bad debt expense must be made.

The bookkeeper recorded the following journal entry Which one of the following statements is false?

All of the following statements regarding the financial statement presentation of receivables are true except:

The term "receivables" refers to

A promissory note

When an account is written off using the allowance method, the

Windsor Corporation sells its goods on terms of 2/10, n/30. It has an accounts receivable turnover of 6. What is its average collection period (days)?

The accounts receivable turnover ratio is computed by dividing total sales by the average net receivables during the year.

Under the allowance method, Bad Debt Expense is debited when an account is deemed uncollectible and must be written off.

If a retailer accepts a national credit card such as Visa, the retailer must maintain detailed records of customer accounts.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters