Question 1

The accounts receivable turnover is calculated by:

Accepted Answer

A) Dividing net sales by average accounts receivable. 
B) Dividing net sales by average accounts receivable and multiplying by 365. 
C) Dividing average accounts receivable by net sales. 
D) Dividing average accounts receivable by net sales and multiplying by 365. 
E) Dividing net income by average accounts receivable. 
A) Dividing net sales by average accounts receivable. 
B) Dividing net sales by average accounts receivable and multiplying by 365. 
C) Dividing average accounts receivable by net sales. 
D) Dividing average accounts receivable by net sales and multiplying by 365. 
E) Dividing net income by average accounts receivable.

Question 2

The percent of accounts receivable method for bad debts estimation uses only income statement account balances to estimate bad debts.

Accepted Answer

A) True 
 B)False

Question 3

The quality of receivables refers to:

Accepted Answer

A) The creditworthiness of sellers. 
B) The speed of collection. 
C) The likelihood of collection without loss. 
D) Sales turnover. 
E) The interest rate. 
A) The creditworthiness of sellers. 
B) The speed of collection. 
C) The likelihood of collection without loss. 
D) Sales turnover. 
E) The interest rate.

Question 4

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

Accepted Answer

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

Question 5

Gamer Inc.determines that it cannot collect $60 owed to it by its customer T.Jacobs.Gamer uses the direct write-off method.How would the company record this transaction?

Accepted Answer

A) Debit Bad Debt Expense for $60 and credit Accounts Receivable-T.Jacobs for $60. 
B) Debit Allowance for Doubtful Accounts for $60 and credit Accounts Receivable-T.Jacobs for $60. 
C) Debit Bad Debt Expense for $60 and credit Allowance for Doubtful Accounts for $60. 
D) Debit Notes Receivable-T.Jacobs for $60 and credit Accounts Receivable-T.Jacobs for $60. 
E) Debit Accounts Receivable-T.Jacobs for $60 and credit Notes Receivable-T.Jacobs for $60. 
A) Debit Bad Debt Expense for $60 and credit Accounts Receivable-T.Jacobs for $60. 
B) Debit Allowance for Doubtful Accounts for $60 and credit Accounts Receivable-T.Jacobs for $60. 
C) Debit Bad Debt Expense for $60 and credit Allowance for Doubtful Accounts for $60. 
D) Debit Notes Receivable-T.Jacobs for $60 and credit Accounts Receivable-T.Jacobs for $60. 
E) Debit Accounts Receivable-T.Jacobs for $60 and credit Notes Receivable-T.Jacobs for $60.

Question 6

A company has net sales of $870,000 and average accounts receivable of $174,000.What is its accounts receivable turnover for the period?

Accepted Answer

A) 0.2 
B) 5.0 
C) 20.0 
D) 73.0 
E) 1,825.0 
A) 0.2 
B) 5.0 
C) 20.0 
D) 73.0 
E) 1,825.0

Question 7

Cairo Co.uses the allowance method of accounting for uncollectible accounts.Cairo Co.accepted a $5,000,12%,90-day note dated May 16,from Alexandria Co.in exchange for its past-due account receivable.Make the necessary general journal entries for Cairo Co.on May 16 and the August 14 maturity date,assuming that the:
a.Note is held until maturity and collected in full at that time.
b.Note is dishonored; the amount of the note and its interest are written off as uncollectible.

Accepted Answer

a. @#IMG-DLM&_TB6947_00_TB6947

Question 8

A company has the following unadjusted account balances at December 31,of the current year: Accounts Receivable of $185,700 and Allowance for Doubtful Accounts of $1,600 (credit balance).This company uses the aging of accounts receivable to estimate its bad debts.The following aging schedule reflects its accounts receivable at the current year-end:
   a.Calculate the amount of the allowance for doubtful accounts that should appear on the December 31 of the current year balance sheet.
b.Prepare the adjusting journal entry to record bad debts expense for the current year.

Accepted Answer

a. @#IMG-DLM&_TB6947_00_TB6947_00_TB6947_00 b. @#IMG-DLM&_TB

Question 9

The accounts receivable turnover ratio indicates how often accounts receivable are received and collected during the period.

Accepted Answer

A) True 
 B)False

Question 10

Prepare the adjusting journal entry to record the estimate for bad debts assuming:
On December 31 of the current year,a company's unadjusted trial balance revealed the following: accounts receivable of $185,600; sales revenue of $1,280,000; (75% were on credit); and allowance for doubtful accounts of $1,600 (credit balance).
a.Bad debts expense is estimated to be 1.5% of credit sales.
b.6% of the accounts receivable balance is assumed to be uncollectible.

Accepted Answer

a. @#IMG-DLM&_TB6947_00_TB6947

Question 11

A company received a $1,000,90-day,10% note receivable.The journal entry to record receipt of the note would include a debit to Notes Receivable.

Accepted Answer

A) True 
 B)False

Question 12

The following series of transactions occurred during 2014 and 2015 when Linwood Co.sold merchandise to John Moore.Linwood's annual accounting period ends on December 31.
   Prepare Linwood Co.'s journal entries to record the above transactions assuming they use the allowance method of accounting for uncollectible accounts.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 13

Ace Credit Card Company agrees to transfer cash to Seller Company immediately upon deposit of that company's credit card sales receipts.Ace charges a 2% fee for all credit card sales.If Seller Company deposits $57,300 credit card sales receipts,which of the following statements are true?

Accepted Answer

A) Ace will receive $56,154 cash from Seller Company. 
B) Seller Company will receive cash $56,154 from Ace. 
C) Ace will receive $57,300 cash from Seller Company. 
D) Seller Company will receive $57,300 cash from Ace. 
E) Ace will pay Seller Company a $1,146 credit card fee. 
A) Ace will receive $56,154 cash from Seller Company. 
B) Seller Company will receive cash $56,154 from Ace. 
C) Ace will receive $57,300 cash from Seller Company. 
D) Seller Company will receive $57,300 cash from Ace. 
E) Ace will pay Seller Company a $1,146 credit card fee.

Question 14

The practice of placing dishonored notes receivable into accounts receivable keeps only notes that have not matured in the Notes Receivable account.

Accepted Answer

A) True 
 B)False

Question 15

The interest accrued on $3,600 at 7% for 60 days is:

Accepted Answer

A) $36. 
B) $42. 
C) $252. 
D) $180. 
E) $420. 
A) $36. 
B) $42. 
C) $252. 
D) $180. 
E) $420.

Question 16

Myrex Corporation purchased $4,000 in merchandise from TechCom.Myrex signed a 60-day,10%,$4,000 promissory note.TechCom should record the sale with a journal entry debiting ____________________ for $________ and crediting __________________ for $________.

Accepted Answer

Notes Rece

Question 17

The following information is from the annual financial statements of Nancy Company.     
-What is the accounts receivable turnover ratio for 2012?

Accepted Answer

A) 6.41 
B) 4.97 
C) 6.72 
D) 5.40 
E) 5.20 
A) 6.41 
B) 4.97 
C) 6.72 
D) 5.40 
E) 5.20

Question 18

How does Kevin Plank of UnderArmour,view decisions involving sales on credit?

Accepted Answer

Kevin feels that decisions involving sal

Question 19

Describe how accounts receivable arise and how they are accounted for,including the use of a subsidiary ledger and an allowance account.

Accepted Answer

Accounts receivable arise from credit sa

Question 20

The aging method of determining bad debts expense is based on the knowledge that the longer a receivable is past due,the lower the likelihood of collection.

Accepted Answer

A) True 
 B)False

The accounts receivable turnover is calculated by:

The percent of accounts receivable method for bad debts estimation uses only income statement account balances to estimate bad debts.

The quality of receivables refers to:

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

Gamer Inc.determines that it cannot collect $60 owed to it by its customer T.Jacobs.Gamer uses the direct write-off method.How would the company record this transaction?

A company has net sales of $870,000 and average accounts receivable of $174,000.What is its accounts receivable turnover for the period?

The accounts receivable turnover ratio indicates how often accounts receivable are received and collected during the period.

A company received a $1,000,90-day,10% note receivable.The journal entry to record receipt of the note would include a debit to Notes Receivable.

Ace Credit Card Company agrees to transfer cash to Seller Company immediately upon deposit of that company's credit card sales receipts.Ace charges a 2% fee for all credit card sales.If Seller Company deposits $57,300 credit card sales receipts,which of the following statements are true?

The practice of placing dishonored notes receivable into accounts receivable keeps only notes that have not matured in the Notes Receivable account.

The interest accrued on $3,600 at 7% for 60 days is:

Myrex Corporation purchased $4,000 in merchandise from TechCom.Myrex signed a 60-day,10%,$4,000 promissory note.TechCom should record the sale with a journal entry debiting __________ for $ and crediting for $.

The following information is from the annual financial statements of Nancy Company. -What is the accounts receivable turnover ratio for 2012?

How does Kevin Plank of UnderArmour,view decisions involving sales on credit?

Describe how accounts receivable arise and how they are accounted for,including the use of a subsidiary ledger and an allowance account.

The aging method of determining bad debts expense is based on the knowledge that the longer a receivable is past due,the lower the likelihood of collection.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 7: Reporting and Analyzing Receivables

The accounts receivable turnover is calculated by:

The percent of accounts receivable method for bad debts estimation uses only income statement account balances to estimate bad debts.

The quality of receivables refers to:

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

Gamer Inc.determines that it cannot collect $60 owed to it by its customer T.Jacobs.Gamer uses the direct write-off method.How would the company record this transaction?

A company has net sales of $870,000 and average accounts receivable of $174,000.What is its accounts receivable turnover for the period?

The accounts receivable turnover ratio indicates how often accounts receivable are received and collected during the period.

A company received a $1,000,90-day,10% note receivable.The journal entry to record receipt of the note would include a debit to Notes Receivable.

Ace Credit Card Company agrees to transfer cash to Seller Company immediately upon deposit of that company's credit card sales receipts.Ace charges a 2% fee for all credit card sales.If Seller Company deposits $57,300 credit card sales receipts,which of the following statements are true?

The practice of placing dishonored notes receivable into accounts receivable keeps only notes that have not matured in the Notes Receivable account.

The interest accrued on $3,600 at 7% for 60 days is:

Myrex Corporation purchased $4,000 in merchandise from TechCom.Myrex signed a 60-day,10%,$4,000 promissory note.TechCom should record the sale with a journal entry debiting ____________________ for $________ and crediting __________________ for $________.

The following information is from the annual financial statements of Nancy Company. -What is the accounts receivable turnover ratio for 2012?

How does Kevin Plank of UnderArmour,view decisions involving sales on credit?

Describe how accounts receivable arise and how they are accounted for,including the use of a subsidiary ledger and an allowance account.

The aging method of determining bad debts expense is based on the knowledge that the longer a receivable is past due,the lower the likelihood of collection.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Myrex Corporation purchased $4,000 in merchandise from TechCom.Myrex signed a 60-day,10%,$4,000 promissory note.TechCom should record the sale with a journal entry debiting __________ for $ and crediting for $.