Question 1

The average collection period is frequently used to assess the effectiveness of a company's credit and collection policies.

Accepted Answer

A) True 
 B)False

Question 2

The collection of an account that had been previously written off under the allowance method for uncollectible accounts

Accepted Answer

A) increases net income in the period it is collected. 
B) decreases net income in the period it is collected. 
C) requires a correcting entry for the period in which the account was written off. 
D) does not affect net income in the period it is collected. 
A) increases net income in the period it is collected. 
B) decreases net income in the period it is collected. 
C) requires a correcting entry for the period in which the account was written off. 
D) does not affect net income in the period it is collected.

Question 3

When the due date of a note is stated in months, the time factor in calculating interest, if it is due monthly, is the number of months divided by 12.

Accepted Answer

A) True 
 B)False

Question 4

Notes or accounts receivables that result from sales transactions are often called

Accepted Answer

A) sales receivables. 
B) nontrade receivables. 
C) trade receivables. 
D) merchandise receivables. 
A) sales receivables. 
B) nontrade receivables. 
C) trade receivables. 
D) merchandise receivables.

Question 5

Bad Debts Expense is a contra account to the Sales account.

Accepted Answer

A) True 
 B)False

Question 6

Writing off an uncollectible account involves

Accepted Answer

A) a debit to Bad Debts Expense. 
B) a debit to Allowance for Doubtful Accounts. 
C) a debit to Refund Liability. 
D) a debit to Accounts Receivable. 
A) a debit to Bad Debts Expense. 
B) a debit to Allowance for Doubtful Accounts. 
C) a debit to Refund Liability. 
D) a debit to Accounts Receivable.

Question 7

Atlas Inc.borrowed money from a bank; therefore, it is regarded as the payee.

Accepted Answer

A) True 
 B)False

Question 8

When collecting a previously written-off account

Accepted Answer

A) Cash is debited and Bad Debts Expense is credited. 
B) Accounts Receivable is debited and Sales is credited. 
C) Accounts Receivable is debited and credited. 
D) Accounts Receivable is not affected. 
A) Cash is debited and Bad Debts Expense is credited. 
B) Accounts Receivable is debited and Sales is credited. 
C) Accounts Receivable is debited and credited. 
D) Accounts Receivable is not affected.

Question 9

Which of the following is not true regarding promissory notes?

Accepted Answer

A) Promissory notes are not shown at carrying amount on the statement of financial position. 
B) Promissory notes are usually interest-bearing. 
C) Promissory notes give a stronger legal claim to the holder than accounts receivable. 
D) Promissory notes are frequently accepted from customers who need to extend the payment of an outstanding account receivable. 
A) Promissory notes are not shown at carrying amount on the statement of financial position. 
B) Promissory notes are usually interest-bearing. 
C) Promissory notes give a stronger legal claim to the holder than accounts receivable. 
D) Promissory notes are frequently accepted from customers who need to extend the payment of an outstanding account receivable.

Question 10

The carrying amount of the Accounts Receivable is $19,000 before the write off of a $2,500 account.What is the carrying amount after the write off?

Accepted Answer

A) $21,500 
B) $19,000 
C) $16,500 
D) $2,500 
A) $21,500 
B) $19,000 
C) $16,500 
D) $2,500

Question 11

Right Corp.receives a $5,000, 4-month, 6% note from Wrong Corp.in settlement of a past-due account receivable.What entry will Night Corp.make upon receiving the note?

Accepted Answer

The answer of Right Corp.receives a $5,000, 4-month, 6% note...

Question 12

The two key parties to a promissory note are the

Accepted Answer

A) maker and a bank. 
B) debtor and the payee. 
C) maker and the payee. 
D) sender and the receiver. 
A) maker and a bank. 
B) debtor and the payee. 
C) maker and the payee. 
D) sender and the receiver.

Question 13

To find the balance due from an individual customer, the accountant would refer to the

Accepted Answer

A) General Journal. 
B) Sales account in the general ledger. 
C) Accounts Receivable subsidiary ledger. 
D) Accounts Receivable account in the general ledger. 
A) General Journal. 
B) Sales account in the general ledger. 
C) Accounts Receivable subsidiary ledger. 
D) Accounts Receivable account in the general ledger.

Question 14

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

Accepted Answer

A) Accounts Receivable and a credit to Allowance for Doubtful Accounts. 
B) Bad Debts Expense and a credit to Allowance for Doubtful Accounts. 
C) Allowance for Doubtful Accounts and a credit to Accounts Receivable. 
D) Bad Debts Expense and a credit to Accounts Receivable. 
A) Accounts Receivable and a credit to Allowance for Doubtful Accounts. 
B) Bad Debts Expense and a credit to Allowance for Doubtful Accounts. 
C) Allowance for Doubtful Accounts and a credit to Accounts Receivable. 
D) Bad Debts Expense and a credit to Accounts Receivable.

Question 15

Use the following information for questions 
The financial statements of Andreo Manufacturing Inc.report credit sales of $600,000 and accounts receivable of $60,000 and $40,000 at the beginning of the year and end of the year, respectively.
-What is the receivables turnover ratio for Bolero?

Accepted Answer

A) 7.5 times 
B) 11.25 times 
C) 12.0 times 
D) 22.5 times 
A) 7.5 times 
B) 11.25 times 
C) 12.0 times 
D) 22.5 times

Question 16

Use the following information for questions 
Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $10,000.The unadjusted balance for the Allowance for Doubtful Accounts is $1,500 credit.
-What is the balance in the Allowance for Doubtful Accounts account after adjustment?

Accepted Answer

A) $11,500 
B) $10,000 
C) $1,500 
D) $7,000 
A) $11,500 
B) $10,000 
C) $1,500 
D) $7,000

Question 17

In a promissory note, the party

Accepted Answer

A) making the promise to pay is called the payee. 
B) who is paid is called the maker. 
C) making the promise to pay is called the recipient. 
D) who is paid is called the payee. 
A) making the promise to pay is called the payee. 
B) who is paid is called the maker. 
C) making the promise to pay is called the recipient. 
D) who is paid is called the payee.

Question 18

Use the following information for questions 
Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $10,000.The unadjusted balance for the Allowance for Doubtful Accounts is $1,500 credit.
-What is the amount of bad debts expense for the year?

Accepted Answer

A) $11,500 
B) $10,000 
C) $1,500 
D) $8,500 
A) $11,500 
B) $10,000 
C) $1,500 
D) $8,500

Question 19

If a company fails to record estimated bad debts expense, then

Accepted Answer

A) the carrying amount is understated. 
B) expenses are understated. 
C) revenues are understated. 
D) receivables are understated. 
A) the carrying amount is understated. 
B) expenses are understated. 
C) revenues are understated. 
D) receivables are understated.

Question 20

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

Accepted Answer

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

The average collection period is frequently used to assess the effectiveness of a company's credit and collection policies.

The collection of an account that had been previously written off under the allowance method for uncollectible accounts

When the due date of a note is stated in months, the time factor in calculating interest, if it is due monthly, is the number of months divided by 12.

Notes or accounts receivables that result from sales transactions are often called

Bad Debts Expense is a contra account to the Sales account.

Writing off an uncollectible account involves

Atlas Inc.borrowed money from a bank; therefore, it is regarded as the payee.

When collecting a previously written-off account

Which of the following is not true regarding promissory notes?

The carrying amount of the Accounts Receivable is $19,000 before the write off of a $2,500 account.What is the carrying amount after the write off?

Right Corp.receives a $5,000, 4-month, 6% note from Wrong Corp.in settlement of a past-due account receivable.What entry will Night Corp.make upon receiving the note?

The two key parties to a promissory note are the

To find the balance due from an individual customer, the accountant would refer to the

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

Use the following information for questions The financial statements of Andreo Manufacturing Inc.report credit sales of $600,000 and accounts receivable of $60,000 and $40,000 at the beginning of the year and end of the year, respectively. -What is the receivables turnover ratio for Bolero?

In a promissory note, the party

Use the following information for questions Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $10,000.The unadjusted balance for the Allowance for Doubtful Accounts is $1,500 credit. -What is the amount of bad debts expense for the year?

If a company fails to record estimated bad debts expense, then

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

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 8: Reporting and Analyzing Receivables

The average collection period is frequently used to assess the effectiveness of a company's credit and collection policies.

The collection of an account that had been previously written off under the allowance method for uncollectible accounts

When the due date of a note is stated in months, the time factor in calculating interest, if it is due monthly, is the number of months divided by 12.

Notes or accounts receivables that result from sales transactions are often called

Bad Debts Expense is a contra account to the Sales account.

Writing off an uncollectible account involves

Atlas Inc.borrowed money from a bank; therefore, it is regarded as the payee.

When collecting a previously written-off account

Which of the following is not true regarding promissory notes?

The carrying amount of the Accounts Receivable is $19,000 before the write off of a $2,500 account.What is the carrying amount after the write off?

Right Corp.receives a $5,000, 4-month, 6% note from Wrong Corp.in settlement of a past-due account receivable.What entry will Night Corp.make upon receiving the note?

The two key parties to a promissory note are the

To find the balance due from an individual customer, the accountant would refer to the

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

Use the following information for questions The financial statements of Andreo Manufacturing Inc.report credit sales of $600,000 and accounts receivable of $60,000 and $40,000 at the beginning of the year and end of the year, respectively. -What is the receivables turnover ratio for Bolero?

In a promissory note, the party

Use the following information for questions Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $10,000.The unadjusted balance for the Allowance for Doubtful Accounts is $1,500 credit. -What is the amount of bad debts expense for the year?

If a company fails to record estimated bad debts expense, then

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

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters