Question 1

As items are actually returned,the company reduces its sales refunds payable account for the amount of cash or accounts receivable credit it gives back to customers.

Accepted Answer

A) True 
 B)False

Question 2

The current ratio is a more stringent measure of a firm's ability to pay current liabilities than the quick ratio.

Accepted Answer

A) True 
 B)False

Question 3

With regard to Accounts Receivable,a separate account for each customer is kept in a(n):

Accepted Answer

A) control account. 
B) subsidiary ledger. 
C) general ledger. 
D) control ledger. 
A) control account. 
B) subsidiary ledger. 
C) general ledger. 
D) control ledger.

Question 4

Jumpin Corporation uses the percent-of-sales method to estimate uncollectibles.Net credit sales for the current year amount to $2,030,000,and management estimates 5% will be uncollectible.The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $1,300.The amount of Uncollectible-Account Expense reported on the income statement will be:

Accepted Answer

A) $1,300. 
B) $100,200. 
C) $101,500. 
D) $102,800. 
A) $1,300. 
B) $100,200. 
C) $101,500. 
D) $102,800.

Question 5

A year-end review of Accounts Receivable and estimated uncollectible percentages revealed the following:   Before the year-end adjustment,the credit balance in Allowance for Uncollectible Accounts was $900.Under the aging-of-receivables method,the balance in the Allowance for Uncollectible Accounts will be ________ after the adjusting entry is made.

Accepted Answer

A) $380 
B) $7,600 
C) $8,500 
D) $9,400 
A) $380 
B) $7,600 
C) $8,500 
D) $9,400

Question 6

Under the allowance method,when a company determines that a specific customer's Accounts Receivable will not be collected,its accounting department will debit:

Accepted Answer

A) Uncollectible-Account Expense and credit Accounts Receivable. 
B) Accounts Receivable and credit Allowance for Uncollectible Accounts. 
C) Allowance for Uncollectible Accounts and credit Uncollectible Account Expense. 
D) Allowance for Uncollectible Accounts and credit Accounts Receivable. 
A) Uncollectible-Account Expense and credit Accounts Receivable. 
B) Accounts Receivable and credit Allowance for Uncollectible Accounts. 
C) Allowance for Uncollectible Accounts and credit Uncollectible Account Expense. 
D) Allowance for Uncollectible Accounts and credit Accounts Receivable.

Question 7

When evaluating the collectability of accounts receivable:

Accepted Answer

A) the Uncollectible-Account Expense is a contra account. 
B) the Allowance for Uncollectible Accounts is an operating expense in the selling,general and administrative category. 
C) the allowance method uses estimates developed from the company's collection experience. 
D) the direct write-off method uses the Allowance for Uncollectible Accounts to record bad debts. 
A) the Uncollectible-Account Expense is a contra account. 
B) the Allowance for Uncollectible Accounts is an operating expense in the selling,general and administrative category. 
C) the allowance method uses estimates developed from the company's collection experience. 
D) the direct write-off method uses the Allowance for Uncollectible Accounts to record bad debts.

Question 8

Jensen Corporation uses the percentage-of-sales method to estimate uncollectibles.Net credit sales for the current year amount to $2,010,000 and management estimates 3% will be uncollectible.The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $18,000.After all adjusting entries are made,the balance in Allowance for Uncollectible Accounts will be:

Accepted Answer

A) $18,000. 
B) $18,540. 
C) $42,300. 
D) $60,300. 
A) $18,000. 
B) $18,540. 
C) $42,300. 
D) $60,300.

Question 9

Following Generally Accepted Accounting Principles,which method of estimating uncollectible accounts is NOT acceptable?

Accepted Answer

A) allowance method 
B) percent-of-sales method 
C) aging-of-receivables method 
D) direct write-off method 
A) allowance method 
B) percent-of-sales method 
C) aging-of-receivables method 
D) direct write-off method

Question 10

The direct-write off method for uncollectible accounts receivable may ________ net income and ________ total assets in the year of the sale:

Accepted Answer

A) understate;understate. 
B) overstate;overstate. 
C) understate;overstate. 
D) overstate;understate. 
A) understate;understate. 
B) overstate;overstate. 
C) understate;overstate. 
D) overstate;understate.

Question 11

Estimating uncollectible accounts by analyzing receivables from specific customers according to how long each has been outstanding is known as the:

Accepted Answer

A) direct write-off method. 
B) percent-of-sales method. 
C) allowance method. 
D) aging-of-receivables method. 
A) direct write-off method. 
B) percent-of-sales method. 
C) allowance method. 
D) aging-of-receivables method.

Question 12

The journal entry to record lending money on a note receivable is:

Accepted Answer

A) Debit Cash,credit Notes Receivable 
B) Debit Notes Receivable,credit Cash. 
C) Debit Cash,credit Accounts Receivable. 
D) Credit Accounts Receivable,credit Cash. 
A) Debit Cash,credit Notes Receivable 
B) Debit Notes Receivable,credit Cash. 
C) Debit Cash,credit Accounts Receivable. 
D) Credit Accounts Receivable,credit Cash.

Question 13

A company borrows $10,000 from the bank at 10% interest for sixty days.$10,000 is the ________ of the note.The maturity value of the note is ________.For computation of interest,use a 365-day year.(Round your final answer to the nearest dollar. )

Accepted Answer

A) maturity value;$10,164 
B) present value;$10,000 
C) future value;$10,000 
D) principal;$10,164 
A) maturity value;$10,164 
B) present value;$10,000 
C) future value;$10,000 
D) principal;$10,164

Question 14

When goods are shipped FOB destination:

Accepted Answer

A) revenue is recognized when the goods leave the shipping dock. 
B) revenue is recognized when the invoice is mailed to the customer. 
C) revenue is recognized only after cash payment is received. 
D) revenue is recognized when the goods are received by the customer. 
A) revenue is recognized when the goods leave the shipping dock. 
B) revenue is recognized when the invoice is mailed to the customer. 
C) revenue is recognized only after cash payment is received. 
D) revenue is recognized when the goods are received by the customer.

Question 15

A trade discount is not considered in the transaction price.

Accepted Answer

A) True 
 B)False

Question 16

The income statement approach to estimating uncollectible accounts is called the ________ method.The balance sheet approach to estimating uncollectible accounts is called the ________ method.

Accepted Answer

A) direct write-off;allowance 
B) allowance;direct write-off 
C) percent-of-sales;aging-of-receivables 
D) aging-of-receivables;percent-of-sales 
A) direct write-off;allowance 
B) allowance;direct write-off 
C) percent-of-sales;aging-of-receivables 
D) aging-of-receivables;percent-of-sales

Question 17

On December 1,Macy Company sold merchandise with a selling price of $3,000 on account to Mrs.Jorgensen,with terms 1/10,n/30.Using the gross method and ignoring cost of goods sold,what journal entry did Macy Company prepare on December 1? Macy expects no sales returns.

Accepted Answer

A) Debit Cash for $3,000 and credit Accounts Receivable for $3,000. 
B) Debit Accounts Receivable for $2,970 and credit Cash for $2,970. 
C) Debit Accounts Receivable for $2,970 and credit Sales Revenue for $2,970. 
D) Debit Accounts Receivable for $3,000 and and credit Sales Revenue for $3,000. 
A) Debit Cash for $3,000 and credit Accounts Receivable for $3,000. 
B) Debit Accounts Receivable for $2,970 and credit Cash for $2,970. 
C) Debit Accounts Receivable for $2,970 and credit Sales Revenue for $2,970. 
D) Debit Accounts Receivable for $3,000 and and credit Sales Revenue for $3,000.

Question 18

The journal entry to record accrued interest on a note receivable at year end is:

Accepted Answer

A) debit Interest Receivable and credit Interest Revenue. 
B) debit Note Receivable and credit Interest Revenue. 
C) debit Interest Receivable and credit Note Receivable. 
D) debit Cash and credit Interest Receivable. 
A) debit Interest Receivable and credit Interest Revenue. 
B) debit Note Receivable and credit Interest Revenue. 
C) debit Interest Receivable and credit Note Receivable. 
D) debit Cash and credit Interest Receivable.

Question 19

Lennon Company signed a 12-month,$53,000,10% note on June 1,2019.The amount of interest to be accrued on December 31,2019,is: (Round your final answer to the nearest dollar. )

Accepted Answer

A) $442. 
B) $2,650. 
C) $3,092. 
D) $5,300. 
A) $442. 
B) $2,650. 
C) $3,092. 
D) $5,300.

Question 20

The maturity value of a 6 month,7% note for $70,000,dated May 12 is: (Round your final answer to the nearest dollar. )

Accepted Answer

A) $2,450. 
B) $70,000. 
C) $74,900. 
D) $72,450. 
A) $2,450. 
B) $70,000. 
C) $74,900. 
D) $72,450.

As items are actually returned,the company reduces its sales refunds payable account for the amount of cash or accounts receivable credit it gives back to customers.

The current ratio is a more stringent measure of a firm's ability to pay current liabilities than the quick ratio.

With regard to Accounts Receivable,a separate account for each customer is kept in a(n):

Under the allowance method,when a company determines that a specific customer's Accounts Receivable will not be collected,its accounting department will debit:

When evaluating the collectability of accounts receivable:

Following Generally Accepted Accounting Principles,which method of estimating uncollectible accounts is NOT acceptable?

The direct-write off method for uncollectible accounts receivable may net income and total assets in the year of the sale:

Estimating uncollectible accounts by analyzing receivables from specific customers according to how long each has been outstanding is known as the:

The journal entry to record lending money on a note receivable is:

A company borrows $10,000 from the bank at 10% interest for sixty days.$10,000 is the of the note.The maturity value of the note is .For computation of interest,use a 365-day year.(Round your final answer to the nearest dollar. )

When goods are shipped FOB destination:

A trade discount is not considered in the transaction price.

The income statement approach to estimating uncollectible accounts is called the method.The balance sheet approach to estimating uncollectible accounts is called the method.

On December 1,Macy Company sold merchandise with a selling price of $3,000 on account to Mrs.Jorgensen,with terms 1/10,n/30.Using the gross method and ignoring cost of goods sold,what journal entry did Macy Company prepare on December 1? Macy expects no sales returns.

The journal entry to record accrued interest on a note receivable at year end is:

Lennon Company signed a 12-month,$53,000,10% note on June 1,2019.The amount of interest to be accrued on December 31,2019,is: (Round your final answer to the nearest dollar. )

The maturity value of a 6 month,7% note for $70,000,dated May 12 is: (Round your final answer to the nearest dollar. )

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

As items are actually returned,the company reduces its sales refunds payable account for the amount of cash or accounts receivable credit it gives back to customers.

The current ratio is a more stringent measure of a firm's ability to pay current liabilities than the quick ratio.

With regard to Accounts Receivable,a separate account for each customer is kept in a(n):

Under the allowance method,when a company determines that a specific customer's Accounts Receivable will not be collected,its accounting department will debit:

When evaluating the collectability of accounts receivable:

Following Generally Accepted Accounting Principles,which method of estimating uncollectible accounts is NOT acceptable?

The direct-write off method for uncollectible accounts receivable may ________ net income and ________ total assets in the year of the sale:

Estimating uncollectible accounts by analyzing receivables from specific customers according to how long each has been outstanding is known as the:

The journal entry to record lending money on a note receivable is:

A company borrows $10,000 from the bank at 10% interest for sixty days.$10,000 is the ________ of the note.The maturity value of the note is ________.For computation of interest,use a 365-day year.(Round your final answer to the nearest dollar. )

When goods are shipped FOB destination:

A trade discount is not considered in the transaction price.

The income statement approach to estimating uncollectible accounts is called the ________ method.The balance sheet approach to estimating uncollectible accounts is called the ________ method.

On December 1,Macy Company sold merchandise with a selling price of $3,000 on account to Mrs.Jorgensen,with terms 1/10,n/30.Using the gross method and ignoring cost of goods sold,what journal entry did Macy Company prepare on December 1? Macy expects no sales returns.

The journal entry to record accrued interest on a note receivable at year end is:

Lennon Company signed a 12-month,$53,000,10% note on June 1,2019.The amount of interest to be accrued on December 31,2019,is: (Round your final answer to the nearest dollar. )

The maturity value of a 6 month,7% note for $70,000,dated May 12 is: (Round your final answer to the nearest dollar. )

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

The direct-write off method for uncollectible accounts receivable may net income and total assets in the year of the sale:

A company borrows $10,000 from the bank at 10% interest for sixty days.$10,000 is the of the note.The maturity value of the note is .For computation of interest,use a 365-day year.(Round your final answer to the nearest dollar. )

The income statement approach to estimating uncollectible accounts is called the method.The balance sheet approach to estimating uncollectible accounts is called the method.