Question 1

Non-trade receivables should be reported separately from trade receivables. Why is this statement either true or false?

Accepted Answer

A)  It is true because trade receivables are current assets and non-trade receivables are long term. 
B)  It is false because all current receivables must be grouped together in one account. 
C)  It is true because non-trade receivables do not result from business operations and should not be included with accounts receivable. 
D)  It is false because management can decide how to report receivables. 
A)  It is true because trade receivables are current assets and non-trade receivables are long term. 
B)  It is false because all current receivables must be grouped together in one account. 
C)  It is true because non-trade receivables do not result from business operations and should not be included with accounts receivable. 
D)  It is false because management can decide how to report receivables.

Question 2

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 3

A dishonored note receivable

Accepted Answer

A)  Is no longer negotiable. 
B)  Must be written off by the lender. 
C)  Creates a claim against the maker for the amount of principal only. 
D)  Is one that is not paid in full within 10 days of maturity. 
A)  Is no longer negotiable. 
B)  Must be written off by the lender. 
C)  Creates a claim against the maker for the amount of principal only. 
D)  Is one that is not paid in full within 10 days of maturity.

Question 4

The following information is related to December 31, 2013 balances. $\begin{array}{lr}
\text { Accounts receivable } & \$ 2,100,000 \
\text { Allowance for doubtful accounts (credit) } & (180,000) \
\text { Cash realizable value } & \$ 1,920,000
\end{array}$ During 2014 sales on account were $580,000 and collections on account were $344,000. Also during 2014 the company wrote off $32,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $216,000. The change in the cash realizable value from the balance at 12/31/13 to 12/31/14 was a

Accepted Answer

A)  $200,000 increase. 
B)  $236,000 increase. 
C)  $168,000 increase. 
D)  $204,000 increase. 
A)  $200,000 increase. 
B)  $236,000 increase. 
C)  $168,000 increase. 
D)  $204,000 increase.

Question 5

Which board(s) has(have) worked to implement fair value measurement for financial instruments?

Accepted Answer

A)  FASB, but not IASB. 
B)  IASB, but not FASB. 
C)  both FASB and IASB. 
D)  neither FASB nor IASB. 
A)  FASB, but not IASB. 
B)  IASB, but not FASB. 
C)  both FASB and IASB. 
D)  neither FASB nor IASB.

Question 6

Prepare journal entries to record the following transactions entered into by the Castagno Company:

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 7

The direct write-off method of accounting for uncollectible accounts

Accepted Answer

A)  emphasizes the matching of expenses with revenues. 
B)  emphasizes balance sheet relationships. 
C)  emphasizes cash realizable value. 
D)  is not generally accepted as a basis for estimating bad debts. 
A)  emphasizes the matching of expenses with revenues. 
B)  emphasizes balance sheet relationships. 
C)  emphasizes cash realizable value. 
D)  is not generally accepted as a basis for estimating bad debts.

Question 8

Schofield Retailers accepted $60,000 of Silver Bank MasterCard credit card charges for merchandise sold on August 1. Silver Bank charges 4% for its credit card use. The entry to record this transaction by Schofield Retailers will include a credit to Sales Revenue of $60,000 and a debit(s) to

Accepted Answer

A)  Cash for $57,600 and Service Charge Expense for $2,400. 
B)  Accounts receivable for $57,600 and Service Charge Expense for $2,400. 
C)  Cash for $60,000. 
D)  Accounts Receivable for $60,000. 
A)  Cash for $57,600 and Service Charge Expense for $2,400. 
B)  Accounts receivable for $57,600 and Service Charge Expense for $2,400. 
C)  Cash for $60,000. 
D)  Accounts Receivable for $60,000.

Question 9

Erickson Company had a $300 credit balance in Allowance for Doubtful Accounts at December 31, 2014, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following: 
  
Instructions
(a) Prepare the adjusting entry on December 31, 2014, to recognize bad debts expense.
(b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $300 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's provision for uncollectible accounts.

Accepted Answer

@#IMG-DLM& (a) Bad Debt Expense 6020
Allowance for

Question 10

Presented here is basic financial information (in millions) from the annual reports of Nike and Adidas.   Instructions
Calculate the accounts receivable turnover and average collection period for both companies. Comment on the difference in their collection experiences.

Accepted Answer

The answer of Presented here is basic financial information (in...

Question 11

Young Company lends Dobson industries $40,000 on August 1, 2014, accepting a 9-month, 12% interest note. If Young prepares it financial statements as of December 31, 2014, what adjusting entry must it make?

Accepted Answer

The answer of Young Company lends Dobson industries $40,000 on...

Question 12

Nichols Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?

Accepted Answer

The answer of Nichols Company uses the percentage of receivables...

Question 13

Which of the following is a way of disposing of a note receivable?

Accepted Answer

A)  Honoring it on maturity date. 
B)  Selling it to receive cash before the maturity date. 
C)  Default by the maker. 
D)  All of these are ways to dispose of notes receivable. 
A)  Honoring it on maturity date. 
B)  Selling it to receive cash before the maturity date. 
C)  Default by the maker. 
D)  All of these are ways to dispose of notes receivable.

Question 14

The accounts receivable turnover is needed to calculate

Accepted Answer

A)  the average collection period in days. 
B)  market risk. 
C)  return on assets. 
D)  current ratio. 
A)  the average collection period in days. 
B)  market risk. 
C)  return on assets. 
D)  current ratio.

Question 15

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

Question 16

During 2014 Wheeler Inc. had sales on account of $528,000, cash sales of $216,000, and collections on account of $336,000. In addition, they collected $5,800 which had been written off as uncollectible in 2013. As a result of these transactions the change in the accounts receivable indicates a

Accepted Answer

A)  $402,200 increase. 
B)  $192,000 increase. 
C)  $186,200 increase. 
D)  $408,000 increase. 
A)  $402,200 increase. 
B)  $192,000 increase. 
C)  $186,200 increase. 
D)  $408,000 increase.

Question 17

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

Accepted Answer

A)  net income will be understated. 
B)  stockholders' equity will be understated. 
C)  Allowance for Doubtful accounts will be overstated. 
D)  net Accounts Receivable will be overstated. 
A)  net income will be understated. 
B)  stockholders' equity will be understated. 
C)  Allowance for Doubtful accounts will be overstated. 
D)  net Accounts Receivable will be overstated.

Question 18

Dorman Company had the following items to report on its balance sheet:   Based on this information, what amount should appear in the "Other Receivables" category?

Accepted Answer

A)  $18,300 
B)  $11,650 
C)  $13,030 
D)  $15,250 
A)  $18,300 
B)  $11,650 
C)  $13,030 
D)  $15,250

Question 19

Wilton sells softball equipment. On November 14, they shipped $3,000 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 $1,800 worth of custom printed bats to be produced in December. On November 30, Paola Middle School returned $300 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)  $4,800 
B)  $4,500 
C)  $3,000 
D)  $2,700 
A)  $4,800 
B)  $4,500 
C)  $3,000 
D)  $2,700

Question 20

Douglas Company has a $51,000 note that carries an annual interest rate of 10%. If the amount of the total interest on the note is equal to $3,400, then what is the duration of the note in months?

Accepted Answer

A)  6 months 
B)  4 months 
C)  12 months 
D)  8 months 
A)  6 months 
B)  4 months 
C)  12 months 
D)  8 months

Non-trade receivables should be reported separately from trade receivables. Why is this statement either true or false?

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

A dishonored note receivable

Which board(s) has(have) worked to implement fair value measurement for financial instruments?

Prepare journal entries to record the following transactions entered into by the Castagno Company:

The direct write-off method of accounting for uncollectible accounts

Schofield Retailers accepted $60,000 of Silver Bank MasterCard credit card charges for merchandise sold on August 1. Silver Bank charges 4% for its credit card use. The entry to record this transaction by Schofield Retailers will include a credit to Sales Revenue of $60,000 and a debit(s) to

Presented here is basic financial information (in millions) from the annual reports of Nike and Adidas. Instructions Calculate the accounts receivable turnover and average collection period for both companies. Comment on the difference in their collection experiences.

Young Company lends Dobson industries $40,000 on August 1, 2014, accepting a 9-month, 12% interest note. If Young prepares it financial statements as of December 31, 2014, what adjusting entry must it make?

Which of the following is a way of disposing of a note receivable?

The accounts receivable turnover is needed to calculate

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

During 2014 Wheeler Inc. had sales on account of $528,000, cash sales of $216,000, and collections on account of $336,000. In addition, they collected $5,800 which had been written off as uncollectible in 2013. As a result of these transactions the change in the accounts receivable indicates a

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

Dorman Company had the following items to report on its balance sheet: Based on this information, what amount should appear in the "Other Receivables" category?

Douglas Company has a $51,000 note that carries an annual interest rate of 10%. If the amount of the total interest on the note is equal to $3,400, then what is the duration of the note in months?

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

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Exam 8: Reporting and Analyzing Receivables

Non-trade receivables should be reported separately from trade receivables. Why is this statement either true or false?

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

A dishonored note receivable

Which board(s) has(have) worked to implement fair value measurement for financial instruments?

Prepare journal entries to record the following transactions entered into by the Castagno Company:

The direct write-off method of accounting for uncollectible accounts

Schofield Retailers accepted $60,000 of Silver Bank MasterCard credit card charges for merchandise sold on August 1. Silver Bank charges 4% for its credit card use. The entry to record this transaction by Schofield Retailers will include a credit to Sales Revenue of $60,000 and a debit(s) to

Presented here is basic financial information (in millions) from the annual reports of Nike and Adidas. Instructions Calculate the accounts receivable turnover and average collection period for both companies. Comment on the difference in their collection experiences.

Young Company lends Dobson industries $40,000 on August 1, 2014, accepting a 9-month, 12% interest note. If Young prepares it financial statements as of December 31, 2014, what adjusting entry must it make?

Which of the following is a way of disposing of a note receivable?

The accounts receivable turnover is needed to calculate

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

During 2014 Wheeler Inc. had sales on account of $528,000, cash sales of $216,000, and collections on account of $336,000. In addition, they collected $5,800 which had been written off as uncollectible in 2013. As a result of these transactions the change in the accounts receivable indicates a

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

Dorman Company had the following items to report on its balance sheet: Based on this information, what amount should appear in the "Other Receivables" category?

Douglas Company has a $51,000 note that carries an annual interest rate of 10%. If the amount of the total interest on the note is equal to $3,400, then what is the duration of the note in months?

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