Question 1

The Allowance for Uncollectible Accounts has a normal debit balance because it is an asset account.

Accepted Answer

A) True 
 B)False

Question 2

Stelloh's Berry Farm accepted a bank-issued credit card in payment of a $1,600 sales transaction.Stelloh's bank charges 1% to process the transaction.The journal entry to record the sales transaction will include (Ignore cost of goods sold. ):

Accepted Answer

A) a debit to Accounts Receivable for $1,584 and a credit to Sales Revenue for $1,584. 
B) a debit to Cash for $1,600 and a credit to Sales Revenue for $1,600. 
C) a debit to Cash for $1,584,a debit to Credit Card Discount Expense for $16 and a credit to Sales Revenue for $1,600. 
D) a debit to Accounts Receivable for $1,600,a debit to Credit Card Revenue for $16 and a credit to Sales Revenue for $1,616. 
A) a debit to Accounts Receivable for $1,584 and a credit to Sales Revenue for $1,584. 
B) a debit to Cash for $1,600 and a credit to Sales Revenue for $1,600. 
C) a debit to Cash for $1,584,a debit to Credit Card Discount Expense for $16 and a credit to Sales Revenue for $1,600. 
D) a debit to Accounts Receivable for $1,600,a debit to Credit Card Revenue for $16 and a credit to Sales Revenue for $1,616.

Question 3

Under the allowance method,Uncollectible-Account Expense is recorded in the same accounting period as the sale.

Accepted Answer

A) True 
 B)False

Question 4

An aging-of-accounts-receivable indicates that the amount of uncollectible accounts is $3,910.The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $600.The Accounts Receivable balance is $44,620.The amount of the adjusting entry for uncollectible accounts should be for:

Accepted Answer

A) $600. 
B) $3,310. 
C) $3,910. 
D) $4,510. 
A) $600. 
B) $3,310. 
C) $3,910. 
D) $4,510.

Question 5

In order to effectively evaluate the days' sales outstanding,it should be compared to the company's credit terms.

Accepted Answer

A) True 
 B)False

Question 6

The transaction price:

Accepted Answer

A) is the retail price and the same price to all customers. 
B) may include a trade discount. 
C) is always the list price. 
D) is always the price that competitors see. 
A) is the retail price and the same price to all customers. 
B) may include a trade discount. 
C) is always the list price. 
D) is always the price that competitors see.

Question 7

Under the allowance method,the entry to write off a $11,600 uncollectible account includes a:

Accepted Answer

A) debit to Uncollectible Account Expense for $11,600 and credit to Allowance for Uncollectible Accounts for $11,600. 
B) debit to Accounts Receivable for $11,600 and credit to Uncollectible-Account Expense for $11,600. 
C) debit to Accounts Receivable for $11,600 and credit to Allowance for Uncollectible Accounts for $11,600. 
D) debit to Allowance for Uncollectible Accounts for $11,600 and credit to Accounts Receivable for $11,600. 
A) debit to Uncollectible Account Expense for $11,600 and credit to Allowance for Uncollectible Accounts for $11,600. 
B) debit to Accounts Receivable for $11,600 and credit to Uncollectible-Account Expense for $11,600. 
C) debit to Accounts Receivable for $11,600 and credit to Allowance for Uncollectible Accounts for $11,600. 
D) debit to Allowance for Uncollectible Accounts for $11,600 and credit to Accounts Receivable for $11,600.

Question 8

Days' sales outstanding can be computed in two logical steps.In the second step:

Accepted Answer

A) the collection period must be determined. 
B) the average daily sales are computed. 
C) the average daily sales are divided by the average net receivables. 
D) the average net receivables are divided by the average daily sales. 
A) the collection period must be determined. 
B) the average daily sales are computed. 
C) the average daily sales are divided by the average net receivables. 
D) the average net receivables are divided by the average daily sales.

Question 9

Most companies will use:

Accepted Answer

A) the direct write-off method for interim statements and the allowance method at the end of the year. 
B) the allowance method for interim statements and the direct write-off method at the end of the year. 
C) the percent-of-sales method for interim statements and the aging-of-receivables method at the end of the year. 
D) the aging-of-receivables method for interim statements and the percent-of-sales method at the end of the year. 
A) the direct write-off method for interim statements and the allowance method at the end of the year. 
B) the allowance method for interim statements and the direct write-off method at the end of the year. 
C) the percent-of-sales method for interim statements and the aging-of-receivables method at the end of the year. 
D) the aging-of-receivables method for interim statements and the percent-of-sales method at the end of the year.

Question 10

We sell to a customer paying with Visa and the fee is 2%.Part of the transaction would include a debit to:

Accepted Answer

A) Sales Revenue. 
B) Sales Discount. 
C) Accounts Receivable. 
D) Credit Card Discount Expense. 
A) Sales Revenue. 
B) Sales Discount. 
C) Accounts Receivable. 
D) Credit Card Discount Expense.

Question 11

The shipping terms in the sales contract determine when ownership of goods changes hands between the buyer and the seller.

Accepted Answer

A) True 
 B)False

Question 12

Excalibur Company has calculated the following ratios:   Did the company's liquidity improve in 2019?

Accepted Answer

A) No. 
B) Yes,all the ratios improved. 
C) There is conflicting information.Two ratios improved and one ratio declined. 
D) There is not enough information to assess. 
A) No. 
B) Yes,all the ratios improved. 
C) There is conflicting information.Two ratios improved and one ratio declined. 
D) There is not enough information to assess.

Question 13

When computing the quick ratio,the numerator will include all of the following EXCEPT for:

Accepted Answer

A) net current receivables. 
B) short-term investments. 
C) inventory. 
D) cash and cash equivalents. 
A) net current receivables. 
B) short-term investments. 
C) inventory. 
D) cash and cash equivalents.

Question 14

Which of the following statements regarding contracts is INCORRECT?

Accepted Answer

A) The process of revenue recognition is based on contracts that the entity has with outsiders. 
B) A contract is an agreement between two parties that creates enforceable rights or performance obligations. 
C) Only written contracts are valid. 
D) Identifying the contract with the customer is the first step of the revenue recognition model. 
A) The process of revenue recognition is based on contracts that the entity has with outsiders. 
B) A contract is an agreement between two parties that creates enforceable rights or performance obligations. 
C) Only written contracts are valid. 
D) Identifying the contract with the customer is the first step of the revenue recognition model.

Question 15

Revenue should be recognized when it is earned,and not before.

Accepted Answer

A) True 
 B)False

Question 16

Uncollectible-Account Expense is included in Cost of Goods Sold on the income statement.

Accepted Answer

A) True 
 B)False

Question 17

When goods are shipped FOB destination,revenue is recognized by the seller when the goods leave the seller's shipping dock.

Accepted Answer

A) True 
 B)False

Question 18

Emporium Bank lends money to a customer on a six month note.What journal entry does the bank prepare?

Accepted Answer

A) debit Note Receivable and credit Service Revenue 
B) debit Cash and credit Note Payable 
C) debit Note Receivable and credit Cash 
D) debit Cash and credit Note Receivable 
A) debit Note Receivable and credit Service Revenue 
B) debit Cash and credit Note Payable 
C) debit Note Receivable and credit Cash 
D) debit Cash and credit Note Receivable

Question 19

On October 11,Younger Company sold merchandise with a selling price of $6,000 on account to Main Street Office Supplies,with a 10% trade discount.Journalize the 1)sale on account if cost of goods sold was $4,000.2)the collection of cash payment on October 20th.

Accepted Answer

The answer of On October 11,Younger Company sold merchandise with...

Question 20

When a note matures:

Accepted Answer

A) the debtor must pay the creditor only the interest on the note. 
B) the creditor must pay the debtor only the interest on the note. 
C) the debtor must pay the creditor the maturity value of the note. 
D) the creditor must pay the debtor the maturity value of the note. 
A) the debtor must pay the creditor only the interest on the note. 
B) the creditor must pay the debtor only the interest on the note. 
C) the debtor must pay the creditor the maturity value of the note. 
D) the creditor must pay the debtor the maturity value of the note.

The Allowance for Uncollectible Accounts has a normal debit balance because it is an asset account.

Stelloh's Berry Farm accepted a bank-issued credit card in payment of a $1,600 sales transaction.Stelloh's bank charges 1% to process the transaction.The journal entry to record the sales transaction will include (Ignore cost of goods sold. ):

Under the allowance method,Uncollectible-Account Expense is recorded in the same accounting period as the sale.

In order to effectively evaluate the days' sales outstanding,it should be compared to the company's credit terms.

The transaction price:

Under the allowance method,the entry to write off a $11,600 uncollectible account includes a:

Days' sales outstanding can be computed in two logical steps.In the second step:

Most companies will use:

We sell to a customer paying with Visa and the fee is 2%.Part of the transaction would include a debit to:

The shipping terms in the sales contract determine when ownership of goods changes hands between the buyer and the seller.

Excalibur Company has calculated the following ratios: Did the company's liquidity improve in 2019?

When computing the quick ratio,the numerator will include all of the following EXCEPT for:

Which of the following statements regarding contracts is INCORRECT?

Revenue should be recognized when it is earned,and not before.

Uncollectible-Account Expense is included in Cost of Goods Sold on the income statement.

When goods are shipped FOB destination,revenue is recognized by the seller when the goods leave the seller's shipping dock.

Emporium Bank lends money to a customer on a six month note.What journal entry does the bank prepare?

On October 11,Younger Company sold merchandise with a selling price of $6,000 on account to Main Street Office Supplies,with a 10% trade discount.Journalize the 1)sale on account if cost of goods sold was $4,000.2)the collection of cash payment on October 20th.

When a note matures:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 5: Receivables and Revenue

The Allowance for Uncollectible Accounts has a normal debit balance because it is an asset account.

Stelloh's Berry Farm accepted a bank-issued credit card in payment of a $1,600 sales transaction.Stelloh's bank charges 1% to process the transaction.The journal entry to record the sales transaction will include (Ignore cost of goods sold. ):

Under the allowance method,Uncollectible-Account Expense is recorded in the same accounting period as the sale.

In order to effectively evaluate the days' sales outstanding,it should be compared to the company's credit terms.

The transaction price:

Under the allowance method,the entry to write off a $11,600 uncollectible account includes a:

Days' sales outstanding can be computed in two logical steps.In the second step:

Most companies will use:

We sell to a customer paying with Visa and the fee is 2%.Part of the transaction would include a debit to:

The shipping terms in the sales contract determine when ownership of goods changes hands between the buyer and the seller.

Excalibur Company has calculated the following ratios: Did the company's liquidity improve in 2019?

When computing the quick ratio,the numerator will include all of the following EXCEPT for:

Which of the following statements regarding contracts is INCORRECT?

Revenue should be recognized when it is earned,and not before.

Uncollectible-Account Expense is included in Cost of Goods Sold on the income statement.

When goods are shipped FOB destination,revenue is recognized by the seller when the goods leave the seller's shipping dock.

Emporium Bank lends money to a customer on a six month note.What journal entry does the bank prepare?

On October 11,Younger Company sold merchandise with a selling price of $6,000 on account to Main Street Office Supplies,with a 10% trade discount.Journalize the 1)sale on account if cost of goods sold was $4,000.2)the collection of cash payment on October 20th.

When a note matures:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters