Exam 10: Short-Term Operating Assets: Cash and Receivables

Ming Company assigns $2,000,000 of its accounts receivables for a finance charge of 4%.The finance company retains an amount equal to 8% of the accounts receivable for possible adjustments.What amount of cash would Ming receive as a result of this initial transaction?

What type of account is Allowance for Uncollectible Accounts?

Which ratio indicates the effectiveness of a company's credit extension policy?

What is a compensating balance?

The operating cycle is the length of time from when a product is sold until the cash is collected.

In which of the following transactions is a "hold back" feature applicable?

What is the company's inventory turnover ratio?

Cash equivalents may include Treasury bills and certificates of deposit.

Accounting standards require separate disclosure for cash and cash equivalents that are restricted from use in operations.

On June 1,Homart Wholesalers,Inc.sells 2,000 cases of facial products for $8 per case with terms of 3/15,n/30. a.If Homart uses the gross method,what is the journal entry to record the sale on June 1? b.If Homart uses the gross method,what is the journal entry to record customer payment on June 12? c.If Homart uses the gross method,what is the journal entry to record customer payment on June 30? d.If Homart uses the net method,what is the journal entry to record the sale on June 1? e.If Homart uses the net method,what is the journal entry to record customer payment on June 12? f.If Homart uses the net method,what is the journal entry to record customer payment on June 30

Which method of estimating bad debt expense focuses on income statement relationships?

Which of the following statements is true?

Companies that use the aging-of-receivables method must disclose the percentage of uncollectible amounts for each age categories.

Gant Company factored its receivables with recourse to Rowlin Bank.Gant received cash as a result of this transaction.This transaction is best described as a ________.

Which of the following is considered to be cash (not a cash equivalent)?

What is a non-interest-bearing note? How does accounting for a short-term non-interest-bearing note differ from a short-term interest-bearing note?

What is a bank overdraft?

On January 1,2016,Willett Company's account balances for Accounts Receivable and the related Allowance for Uncollectible Accounts were $3,600,000 and $90,000,respectively.During the year,sales revenue totaled $40 million,of which 70% were credit sales and the remainder were cash sales.Altogether,cash collections from all customers amounted to $30 million.Also,write-offs of accounts deemed to be uncollectible totaled $250,000.At the end of the year,an analysis of aged accounts receivable indicated that 2% of total gross receivables may be uncollectible. Required: Determine the amount of bad debt expense for the year and net realizable value of receivables at the end of the year.

The Sales Discounts Forfeited account is classified as a contra-revenue account.

Under what circumstances may cash in a bank account be classified as a non-current asset?