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

Eurobake Inc.made a $10,000 sale on account with terms: of 1/15,n/30.If the company uses the net method,which of the following will be included in the journal entry to record the sale on account?

The two acceptable approaches to recording sales discounts are ________.

How long is the company's operating cycle?

The percentage-of-sales method estimates current-period bad debt expense by focusing on balance sheet relationships.

Grisson Enterprises provides the following information: * Restricted fund for bond retirement Following U.S.GAAP,what is the dollar amount of Cash and Cash Equivalents reported on Grisson's balance sheet?

Which of the following is a reduction of a catalog price whenever a company sells to a reseller in the same industry?

Lithotech,Inc had net sales in 2016 of $700,000.At December 31,2016,before adjusting entries,the balances in selected accounts were: accounts receivable $125,000 debit,and allowance for doubtful accounts $1,200 credit.Lithotech estimates that 2% of its net sales will prove to be uncollectible.What is the cash realizable value of the receivables reported on the statement of financial position at December 31,2016? A)$109,800 B)$111,000 C)$112,200 D)$122,500

The market rate is the interest rate that the holder of the note will receive.

Under the allowance method,the recovery of an account previously written-off ________.

Marston Company has outstanding accounts receivable totaling €6.5 million as of December 31 and sales on credit during the year of €24 million.There is also a credit balance of €12,000 in the allowance for doubtful accounts.After aging its receivables,the company estimates that 2% of its credit sales will be uncollectible.What will be the balance for the Allowance for Uncollectible Accounts after the year-end adjustment is made to record bad debt expense?

On May 1,2016,Fitz installed a $475,000 sound system for International Arena.Fitz agreed to accept a $500,000 six-month,noninterest bearing note due on December 1,2016.Fitz prepares financial statements at the end of every calendar year.Fitz's journal entry to record the collection of the note plus accrued interest on December 1,2016,will include a ________.

A trade discount reduces the list price for customers purchasing a large quantity of merchandise.

The two acceptable approaches to estimating bad debt expense are ________.

The aging-of-receivable method focuses on matching bad debt expense to the revenues that generated those revenues.

Securitization of receivables eliminates the risk of non-collection.

Lithotech,Inc had net sales in 2016 of $700,000.At December 31,2016,before adjusting entries,the balances in selected accounts were: accounts receivable $125,000 debit,and allowance for doubtful accounts $1,200 debit.Lithotech estimates that 2% of its net sales will prove to be uncollectible.What is the cash realizable value of the receivables reported on the statement of financial position at December 31,2016?

Bordelain Company has cash in bank of $20,000,restricted cash in a separate account of $6,000,and a bank overdraft in an account at another bank of $2,000.Kennison should report cash of ________.

Notes receivable are classified as current or noncurrent on the balance sheet based on the expected collection date.

Which of the following is true when accounts receivable are factored without recourse?

Under U.S.GAAP,which of the following would be included in the journal entry to record the sale of receivables to a factor without recourse?