Exam 8: Reporting and Analyzing Receivables

Calculate the maturity value associated with each of the following notes receivable, assuming interest is due at maturity. (Round your answers to the nearest cent.) a. A $10,000, 7%, 3-month note dated April 20. b. A $5,000, 5.5%, 4-month note dated March 5. c. An $8,000, 3%, 1-month note dated September 10.

The following data are presented for Ratalan Ltd. for 2018: InstructionsCalculate the receivables turnover and the average collection period for accounts receivable in days.

Which of the following statements is false?

Under the allowance method for uncollectible accounts,

When an account becomes uncollectible and must be written off

Under the allowance method for uncollectible accounts, Bad Debts Expense is recorded

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

Other receivables include nontrade receivables such as loans to company officers.

The Allowance for Doubtful Accounts is a liability account and has a normal credit balance.

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

Under the allowance method for uncollectible accounts, writing off an uncollectible account

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

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

Trade receivables

Advances to employees are a type of accounts receivable.

An aging of accounts receivable schedule is based on the premise that the longer the period an account remains unpaid, the greater the probability that it will eventually be collected.

The general ledger of Grangehill Corporation at December 31, 2018 shows the following balances, all of which are normal: Management estimates the carrying amount of accounts receivable should be $158,000.Instructions a. Prepare the adjusting entry for bad debts for 2018. b. Show how the current assets would be presented on the statement of financial position at December 31, 2018.

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

Estimated uncollectibles are recorded as a debit to

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