Question 1

The maturity value of a $5,000, 6%, 60-day note receivable dated February 10th is

Accepted Answer

A)  $5,050. 
B)  $5,025. 
C)  $5,000. 
D)  $5,300. 
A)  $5,050. 
B)  $5,025. 
C)  $5,000. 
D)  $5,300.

Question 2

The following data exists for Mather Company. $\begin{array}{lrr}&2014&2013\
\text { Accounts Receivable } & \$ 80,000 & \$ 70,000 \
\text { Net Sales } & 560,000 & 410,000
\end{array}$ Calculate the accounts receivable turnover and the average collection period for accounts receivable in days for 2014.

Accepted Answer

The answer of The following data exists for Mather Company....

Question 3

On December 31, 2013, when its Allowance for Doubtful Accounts had a credit balance of $1,500, Leeds Company estimates that 6% of its accounts receivable balance of $95,000 will become uncollectible. On March 3, 2014, Leeds Company determined that Megan Jost's account of $950 was uncollectible. On May 15, 2014, Jost paid the amount previously written off.
Instructions
Prepare the journal entries for December 31, 2013, March 3, 2014 and May 15, 2014.

Accepted Answer

The answer of On December 31, 2013, when its Allowance...

Question 4

Accounts receivable are valued and reported on the balance sheet

Accepted Answer

A)  in the investments section. 
B)  at gross amounts less sales returns and allowances. 
C)  at cash realizable value. 
D)  only if they are not past due. 
A)  in the investments section. 
B)  at gross amounts less sales returns and allowances. 
C)  at cash realizable value. 
D)  only if they are not past due.

Question 5

When customers make purchases with a national credit card, the retailer

Accepted Answer

A)  is responsible for maintaining customer accounts. 
B)  is not involved in the collection process. 
C)  absorbs any losses from uncollectible accounts. 
D)  receives cash equal to the full price of the merchandise sold from the credit card company. 
A)  is responsible for maintaining customer accounts. 
B)  is not involved in the collection process. 
C)  absorbs any losses from uncollectible accounts. 
D)  receives cash equal to the full price of the merchandise sold from the credit card company.

Question 6

On April 5 Donna's Boutique accepted a Visa card for a $600 purchase. Visa charges a 2% service fee. The entry to record this transaction would include a

Accepted Answer

A)  credit to Cash of $588. 
B)  debit to Cash of $600. 
C)  debit to Service Charge Expense of $12. 
D)  credit to Service Charge Expense of $12. 
A)  credit to Cash of $588. 
B)  debit to Cash of $600. 
C)  debit to Service Charge Expense of $12. 
D)  credit to Service Charge Expense of $12.

Question 7

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the balance of the Allowance for Doubtful Accounts is $11,000 debit before adjustment what is the balance after adjustment?

Accepted Answer

A)  $45,000 
B)  $11,000 
C)  $56,000 
D)  $34,000 
A)  $45,000 
B)  $11,000 
C)  $56,000 
D)  $34,000

Question 8

A company sells $900,000 of accounts receivable to a factor for cash less a 2% service charge. The entry to record the sale should not include a

Accepted Answer

A)  debit to Interest Expense for $18,000. 
B)  debit to Cash for $882,000. 
C)  debit to Service Charge Expense for $18,000. 
D)  credit to Accounts Receivable for $900,000. 
A)  debit to Interest Expense for $18,000. 
B)  debit to Cash for $882,000. 
C)  debit to Service Charge Expense for $18,000. 
D)  credit to Accounts Receivable for $900,000.

Question 9

The Allowance for Doubtful Accounts is necessary because

Accepted Answer

A)  when recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay. 
B)  uncollectible accounts that are written off must be accumulated in a separate account. 
C)  a liability results when a credit sale is made. 
D)  management needs to accumulate all the credit losses over the years. 
A)  when recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay. 
B)  uncollectible accounts that are written off must be accumulated in a separate account. 
C)  a liability results when a credit sale is made. 
D)  management needs to accumulate all the credit losses over the years.

Question 10

If a company sells its accounts receivables to a factor

Accepted Answer

A)  the seller pays a commission to the factor. 
B)  the factor pays a commission to the seller. 
C)  there is a gain on the sale of the receivables. 
D)  the seller defers recognition of sales revenue until the account is collected. 
A)  the seller pays a commission to the factor. 
B)  the factor pays a commission to the seller. 
C)  there is a gain on the sale of the receivables. 
D)  the seller defers recognition of sales revenue until the account is collected.

Question 11

The net amount expected to be received in cash from receivables is termed the

Accepted Answer

A)  cash realizable value. 
B)  cash-good value. 
C)  gross cash value. 
D)  cash-equivalent value. 
A)  cash realizable value. 
B)  cash-good value. 
C)  gross cash value. 
D)  cash-equivalent value.

Question 12

Accounts receivable are one of a company's least liquid assets.

Accepted Answer

A) True 
 B)False

Question 13

Receivables are

Accepted Answer

A)  one of the most liquid assets and thus are always considered current assets. 
B)  claims that are expected to be collected in cash. 
C)  shown on the income statement at cash realizable value. 
D)  always the result of revenue recognition. 
A)  one of the most liquid assets and thus are always considered current assets. 
B)  claims that are expected to be collected in cash. 
C)  shown on the income statement at cash realizable value. 
D)  always the result of revenue recognition.

Question 14

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 15

Receivables might be sold to

Accepted Answer

A)  lengthen the cash-to-cash operating cycle. 
B)  take advantage of deep discounts on the cash realizable value of receivables. 
C)  generate cash quickly. 
D)  finance companies at an amount greater than cash realizable value. 
A)  lengthen the cash-to-cash operating cycle. 
B)  take advantage of deep discounts on the cash realizable value of receivables. 
C)  generate cash quickly. 
D)  finance companies at an amount greater than cash realizable value.

Question 16

Rosen Company receives a $5,000, 3-month, 6% promissory note from Bay Company in settlement of an open accounts receivable. What entry will Rosen Company make upon receiving the note?

Accepted Answer

The answer of Rosen Company receives a $5,000, 3-month, 6%...

Question 17

In the table below the information for four companies is provided. $$\begin{array} { | l | c | c | } 
\hline \text { Compary } & \begin{array} { c } 
\text { Accounts Receivable } \
\text { turnover }
\end{array} & \text { Average collection period } \
\hline \text { Martin } & 13.9 & 26.3 \
\hline \text { Lewis } & 13.3 & 27.4 \
\hline \text { Danforth } & 10.4 & \mathbf { 3 5 . 1 } \
\hline \text { Gamer } & 14.5 & 25.2 \
\hline \text { Industry Average } & 13.0 & 28.1 \
\hline
\end{array}$$ If Garner's net credit sales are $290,000, what are its average net accounts receivable?

Accepted Answer

A)  $11,508 
B)  $20,000 
C)  $42,050 
D)  $73,080 
A)  $11,508 
B)  $20,000 
C)  $42,050 
D)  $73,080

Question 18

Which is part of IFRS accounting for financial instruments?

Accepted Answer

The answer of Which is part of IFRS accounting for...

Question 19

When the allowance method is used, the write-off of an account receivable results in an expense at the time of write-off.

Accepted Answer

A) True 
 B)False

Question 20

Both accounts receivable and notes receivable represent claims that are expected to be collected in cash.

Accepted Answer

A) True 
 B)False

The maturity value of a $5,000, 6%, 60-day note receivable dated February 10th is

The following data exists for Mather Company. 2014 2013 Accounts Receivable \ 80,000 \ 70,000 Net Sales 560,000 410,000 Calculate the accounts receivable turnover and the average collection period for accounts receivable in days for 2014.

Accounts receivable are valued and reported on the balance sheet

When customers make purchases with a national credit card, the retailer

On April 5 Donna's Boutique accepted a Visa card for a $600 purchase. Visa charges a 2% service fee. The entry to record this transaction would include a

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the balance of the Allowance for Doubtful Accounts is $11,000 debit before adjustment what is the balance after adjustment?

A company sells $900,000 of accounts receivable to a factor for cash less a 2% service charge. The entry to record the sale should not include a

The Allowance for Doubtful Accounts is necessary because

If a company sells its accounts receivables to a factor

The net amount expected to be received in cash from receivables is termed the

Accounts receivable are one of a company's least liquid assets.

Receivables are

A promissory note

Receivables might be sold to

Rosen Company receives a $5,000, 3-month, 6% promissory note from Bay Company in settlement of an open accounts receivable. What entry will Rosen Company make upon receiving the note?

Which is part of IFRS accounting for financial instruments?

When the allowance method is used, the write-off of an account receivable results in an expense at the time of write-off.

Both accounts receivable and notes receivable represent claims that are expected to be collected in cash.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

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

Understanding Investments and Acquisitions in Accounting

Filters

Exam 8: Reporting and Analyzing Receivables

The maturity value of a $5,000, 6%, 60-day note receivable dated February 10th is

The following data exists for Mather Company. 2014 2013 Accounts Receivable \ 80,000 \ 70,000 Net Sales 560,000 410,000 Calculate the accounts receivable turnover and the average collection period for accounts receivable in days for 2014.

Accounts receivable are valued and reported on the balance sheet

When customers make purchases with a national credit card, the retailer

On April 5 Donna's Boutique accepted a Visa card for a $600 purchase. Visa charges a 2% service fee. The entry to record this transaction would include a

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the balance of the Allowance for Doubtful Accounts is $11,000 debit before adjustment what is the balance after adjustment?

A company sells $900,000 of accounts receivable to a factor for cash less a 2% service charge. The entry to record the sale should not include a

The Allowance for Doubtful Accounts is necessary because

If a company sells its accounts receivables to a factor

The net amount expected to be received in cash from receivables is termed the

Accounts receivable are one of a company's least liquid assets.

Receivables are

A promissory note

Receivables might be sold to

Rosen Company receives a $5,000, 3-month, 6% promissory note from Bay Company in settlement of an open accounts receivable. What entry will Rosen Company make upon receiving the note?

Which is part of IFRS accounting for financial instruments?

When the allowance method is used, the write-off of an account receivable results in an expense at the time of write-off.

Both accounts receivable and notes receivable represent claims that are expected to be collected in cash.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

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

Understanding Investments and Acquisitions in Accounting

Filters