Question 1

A company had net sales of $600,000, total sales of $750,000, and an average accounts receivable of $75,000. Its accounts receivable turnover equals:

Accepted Answer

A) 7.75 
B) 10.00 
C) 8.00 
D) .13 
E) .80 
A) 7.75 
B) 10.00 
C) 8.00 
D) .13 
E) .80

Question 2

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

Accepted Answer

A) Percent of accounts receivable method. 
B) Percentage of sales method. 
C) Aging of investments method. 
D) Direct write-off method. 
E) Aging of accounts receivable method. 
A) Percent of accounts receivable method. 
B) Percentage of sales method. 
C) Aging of investments method. 
D) Direct write-off method. 
E) Aging of accounts receivable method.

Question 3

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Accepted Answer

A) Protesting a note. 
B) Dishonoring a note. 
C) Closing a note. 
D) Depreciating a note. 
E) Discounting a note. 
A) Protesting a note. 
B) Dishonoring a note. 
C) Closing a note. 
D) Depreciating a note. 
E) Discounting a note.

Question 4

Under IFRS, the term provision:

Accepted Answer

A) Means establishing an asset account. 
B) Refers to expense. 
C) Means establishing a provision for bad debts. 
D) Means establishing a contra-asset account. 
E) Usually refers to a liability whose amount or timing is uncertain. 
A) Means establishing an asset account. 
B) Refers to expense. 
C) Means establishing a provision for bad debts. 
D) Means establishing a contra-asset account. 
E) Usually refers to a liability whose amount or timing is uncertain.

Question 5

Installment accounts receivable is another name for aging of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 6

A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is
$3,500.

Accepted Answer

A) True 
 B)False

Question 7

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Accepted Answer

A) 7.1. 
B) 9.7. 
C) 68.3. 
D) 51.7. 
E) 37.8. 
A) 7.1. 
B) 9.7. 
C) 68.3. 
D) 51.7. 
E) 37.8.

Question 8

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4,000. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

Accepted Answer

A) Debit Notes Receivable $4,000; credit Cash $4,000 
B) Debit Notes Receivable $4,060; credit Sales $4,060 
C) Debit Cash $4,000; debit Interest Receivable $60; credit Sales $4,060 
D) Debit Cash $4,060; credit Notes Receivable $4,060 
E) Debit Cash $4,060; credit Interest Revenue $60; credit Notes Receivable $4,000 
A) Debit Notes Receivable $4,000; credit Cash $4,000 
B) Debit Notes Receivable $4,060; credit Sales $4,060 
C) Debit Cash $4,000; debit Interest Receivable $60; credit Sales $4,060 
D) Debit Cash $4,060; credit Notes Receivable $4,060 
E) Debit Cash $4,060; credit Interest Revenue $60; credit Notes Receivable $4,000

Question 9

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1)computing the percent uncollectible from the total accounts receivable or (2)aging accounts receivable.

Accepted Answer

A) True 
 B)False

A company had net sales of $600,000, total sales of $750,000, and an average accounts receivable of $75,000. Its accounts receivable turnover equals:

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Under IFRS, the term provision:

Installment accounts receivable is another name for aging of accounts receivable.

A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is $3,500.

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4,000. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1)computing the percent uncollectible from the total accounts receivable or (2)aging accounts receivable.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Filters

Exam 9: Accounting for Receivables

A company had net sales of $600,000, total sales of $750,000, and an average accounts receivable of $75,000. Its accounts receivable turnover equals:

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Under IFRS, the term provision:

Installment accounts receivable is another name for aging of accounts receivable.

A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is $3,500.

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4,000. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1)computing the percent uncollectible from the total accounts receivable or (2)aging accounts receivable.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Filters