Exam 8: Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Establishing a note receivable by loaning cash to another company will have which of the following net effects on the accounting equation?

(Multiple Choice)

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Question 41

The financial statements of Orion Frozen Foods contained the following information: -Use the information above to answer the following question.The average length of time it takes for Orion Frozen Foods to collect accounts receivable is approximately:

(Multiple Choice)

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Question 42

Which of the following situations depicts the best receivables management?

(Multiple Choice)

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Question 43

A company lends its supplier $150,000 for 3 years at a 6% annual interest rate.Interest payments are to be made twice a year.The entry to record this lending transaction includes a debit to:

(Multiple Choice)

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Question 44

The advantage of extending credit to customers is that it helps customers to buy products and services,thereby increasing the seller's revenue.The disadvantages of extending credit are costs related to:

(Multiple Choice)

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Question 45

Momentum Products Inc.just recorded an adjusting journal entry for the current year's estimate of bad debts.Assuming all else is equal,this adjusting journal entry will cause:

(Multiple Choice)

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Question 46

ABC Corp.received a 3-month,8% per year,$1,500 note receivable on December 1.The adjusting entry on December 31 will include a:

(Multiple Choice)

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Question 47

On December 1,2015,a company lends a new employee $20,000 to assist with her relocation expenses.The employee signs a 6-month note,with interest of 9%.The company prepares year-end financial statements at December 31.What is the required adjusting entry at December 31 as a result of this note transaction?

(Multiple Choice)

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Question 48

What is the annual rate of interest being charged on a 9-month note receivable of $50,000 if the total interest is $3,000?

(Multiple Choice)

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Question 49

Geisel,Inc.reported net sales revenue of $600,000 in 2015 and $500,000 in 2016.The company's average net receivables were $120,000 during 2014 and $130,000 during 2015.At December 31,2016,the company had Accounts Receivable of $148,000 and an unadjusted debit balance in its Allowance for Doubtful Accounts account of $1,000.The company reported Bad Debt Expense of $6,000 during 2015. Required: Part a.Determine the net receivables at December 31,2016. Part b.Calculate the receivables turnover ratio for 2015 and 2016.(Round each calculation to one decimal place). Part c.Calculate the days to collect for 2015 and 2016.(Round each calculation to one decimal place). Part d.Interpret the results of this analysis. Part e.Identify possible reasons for the changes in these two ratios from 2015 to 2016.

(Essay)

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Question 50

Which of the following statements about the recording of interest on notes receivable is correct?

(Multiple Choice)

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Question 51

The days-to-collect measures the:

(Multiple Choice)

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Question 52

Your company uses the aging of accounts receivable method.Net credit sales are unchanged from last year,the year-end balance in Accounts Receivable is unchanged from the previous year's ending balance,and there were no write-offs during the current year.The company previously averaged about 20% of its total accounts receivable in the "over 90 days past due" category and now has 35% in this category at the end of the current year.The dollar amount of the adjustment to record Bad Debt Expense in the current year:

(Multiple Choice)

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Question 53

Using its aging of accounts receivable,Age Old,Inc.estimates that $90,000 of its $4,000,000 of accounts receivable will be uncollectible.Prior to making its adjusting entry,the unadjusted Allowance for Doubtful Accounts has a credit balance of $1,000.After the adjustment,the:

(Multiple Choice)

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Question 54

Given the unadjusted Allowance for Doubtful Accounts has a $50 debit balance,the amount of receivables written off was than the amount estimated in the prior period.Thus,bad debt expense will be in the current period than had the unadjusted balance been a credit balance.

(Multiple Choice)

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Question 55

The percentage of credit sales method focuses on estimating the ending balance to be reported in the Allowance for Doubtful Account,whereas the aging of accounts receivable method focuses on estimating Bad Debt Expense for the period.

(True/False)

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Question 56

A company decides to start allowing its customers to pay with national credit cards and PayPal.This decision would:

(Multiple Choice)

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Question 57

The entry to record a recovery causes:

(Multiple Choice)

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Question 58

Which of the following statements about the Allowance for Doubtful Accounts is correct?

(Multiple Choice)

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Question 59

A company lent $10,000 to an employee who signed a 9%,6-month promissory note.The entry made by the company to record this loan to the employee will include a:

(Multiple Choice)

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Question 60

Showing 41 - 60 of 230

Establishing a note receivable by loaning cash to another company will have which of the following net effects on the accounting equation?

The financial statements of Orion Frozen Foods contained the following information: -Use the information above to answer the following question.The average length of time it takes for Orion Frozen Foods to collect accounts receivable is approximately:

Which of the following situations depicts the best receivables management?

A company lends its supplier $150,000 for 3 years at a 6% annual interest rate.Interest payments are to be made twice a year.The entry to record this lending transaction includes a debit to:

The advantage of extending credit to customers is that it helps customers to buy products and services,thereby increasing the seller's revenue.The disadvantages of extending credit are costs related to:

Momentum Products Inc.just recorded an adjusting journal entry for the current year's estimate of bad debts.Assuming all else is equal,this adjusting journal entry will cause:

ABC Corp.received a 3-month,8% per year,$1,500 note receivable on December 1.The adjusting entry on December 31 will include a:

What is the annual rate of interest being charged on a 9-month note receivable of $50,000 if the total interest is $3,000?

Which of the following statements about the recording of interest on notes receivable is correct?

The days-to-collect measures the:

Using its aging of accounts receivable,Age Old,Inc.estimates that $90,000 of its $4,000,000 of accounts receivable will be uncollectible.Prior to making its adjusting entry,the unadjusted Allowance for Doubtful Accounts has a credit balance of $1,000.After the adjustment,the:

Given the unadjusted Allowance for Doubtful Accounts has a $50 debit balance,the amount of receivables written off was than the amount estimated in the prior period.Thus,bad debt expense will be in the current period than had the unadjusted balance been a credit balance.

The percentage of credit sales method focuses on estimating the ending balance to be reported in the Allowance for Doubtful Account,whereas the aging of accounts receivable method focuses on estimating Bad Debt Expense for the period.

A company decides to start allowing its customers to pay with national credit cards and PayPal.This decision would:

The entry to record a recovery causes:

Which of the following statements about the Allowance for Doubtful Accounts is correct?

A company lent $10,000 to an employee who signed a 9%,6-month promissory note.The entry made by the company to record this loan to the employee will include a:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 8: Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Establishing a note receivable by loaning cash to another company will have which of the following net effects on the accounting equation?

The financial statements of Orion Frozen Foods contained the following information: -Use the information above to answer the following question.The average length of time it takes for Orion Frozen Foods to collect accounts receivable is approximately:

Which of the following situations depicts the best receivables management?

A company lends its supplier $150,000 for 3 years at a 6% annual interest rate.Interest payments are to be made twice a year.The entry to record this lending transaction includes a debit to:

The advantage of extending credit to customers is that it helps customers to buy products and services,thereby increasing the seller's revenue.The disadvantages of extending credit are costs related to:

Momentum Products Inc.just recorded an adjusting journal entry for the current year's estimate of bad debts.Assuming all else is equal,this adjusting journal entry will cause:

ABC Corp.received a 3-month,8% per year,$1,500 note receivable on December 1.The adjusting entry on December 31 will include a:

What is the annual rate of interest being charged on a 9-month note receivable of $50,000 if the total interest is $3,000?

Which of the following statements about the recording of interest on notes receivable is correct?

The days-to-collect measures the:

Using its aging of accounts receivable,Age Old,Inc.estimates that $90,000 of its $4,000,000 of accounts receivable will be uncollectible.Prior to making its adjusting entry,the unadjusted Allowance for Doubtful Accounts has a credit balance of $1,000.After the adjustment,the:

Given the unadjusted Allowance for Doubtful Accounts has a $50 debit balance,the amount of receivables written off was ______ than the amount estimated in the prior period.Thus,bad debt expense will be ______ in the current period than had the unadjusted balance been a credit balance.

The percentage of credit sales method focuses on estimating the ending balance to be reported in the Allowance for Doubtful Account,whereas the aging of accounts receivable method focuses on estimating Bad Debt Expense for the period.

A company decides to start allowing its customers to pay with national credit cards and PayPal.This decision would:

The entry to record a recovery causes:

Which of the following statements about the Allowance for Doubtful Accounts is correct?

A company lent $10,000 to an employee who signed a 9%,6-month promissory note.The entry made by the company to record this loan to the employee will include a:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Given the unadjusted Allowance for Doubtful Accounts has a $50 debit balance,the amount of receivables written off was than the amount estimated in the prior period.Thus,bad debt expense will be in the current period than had the unadjusted balance been a credit balance.