Question 1

To satisfy a performance obligation means that:

Accepted Answer

A) the provider has substantially completed the service for the customer. 
B) the goods have been transferred to the customer who has assumed ownership and control over goods. 
C) the selling entity has done everything required to earn the revenue. 
D) All of the above statements are correct. 
A) the provider has substantially completed the service for the customer. 
B) the goods have been transferred to the customer who has assumed ownership and control over goods. 
C) the selling entity has done everything required to earn the revenue. 
D) All of the above statements are correct.

Question 2

On October 11,Younger Company sold merchandise with a selling price of $6,000 on account to Main Street Office Supplies,with terms 2/10,n/30.No sales returns are expected.On October 20,Younger received the full amount due from Main Street.
Ignoring cost of goods sold,prepare the journal entries for Younger Company using the gross method.Omit explanations.

Accepted Answer

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

Question 3

Days' sales outstanding tells a company how long it takes to collect its average level of receivables.

Accepted Answer

A) True 
 B)False

Question 4

At December 31 of the current year,Accounts Receivable has a balance of $900,000,the Allowance for Uncollectible Accounts has a debit balance of $1,000 and net credit sales for the year are $3,000,000.Using the aging-of-receivables method,the balance of Allowance for Uncollectible Accounts is estimated at $30,000.
Required:
1.Journalize the adjusting entry.Omit the explanation.
   2.Determine the net realizable value of accounts receivable at the end of the year.

Accepted Answer

1.
 @#IMG-DLM& 2.Net realizable value =

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 $1,300.Under the aging-of-receivables method,the Uncollectible-Account Expense at year-end is:

Accepted Answer

A) $1,950. 
B) $9,000. 
C) $10,300. 
D) $11,600. 
A) $1,950. 
B) $9,000. 
C) $10,300. 
D) $11,600.

Question 6

The maturity value of a $55,000 note at 10% for 7 months is: (Round your final answer to the nearest dollar. )

Accepted Answer

A) $55,000. 
B) $58,208. 
C) $57,750. 
D) $60,500. 
A) $55,000. 
B) $58,208. 
C) $57,750. 
D) $60,500.

Question 7

When a merchant sells merchandise and lets the customer pay with a VISA credit card:

Accepted Answer

A) The strategy may increase sales dramatically,with no additional costs involved. 
B) At the time of sale,Credit Card Receivable is debited and Sales Revenue is credited for the discounted portion of the sale amount. 
C) The merchant's point-of-sale terminal is linked to a VISA server which automatically credits the merchant's bank account for the full sale amount. 
D) The credit card discount is similar to interest expense and is reported on the income statement separately from operating income as other income (expense). 
A) The strategy may increase sales dramatically,with no additional costs involved. 
B) At the time of sale,Credit Card Receivable is debited and Sales Revenue is credited for the discounted portion of the sale amount. 
C) The merchant's point-of-sale terminal is linked to a VISA server which automatically credits the merchant's bank account for the full sale amount. 
D) The credit card discount is similar to interest expense and is reported on the income statement separately from operating income as other income (expense).

Question 8

Smith and Son's Department Store has a policy that allows customers to return merchandise for up to 45 days for a full refund.Based on prior experience,approximately 8% of merchandise sold will be returned.
In November,the store's total sales were $2,500,000,all for cash.The cost of the merchandise sold was $1,600,000.
On November 30,the company prepared the adjusting entries for sales returns.
In December,within the allowable return period,customers returned merchandise that retailed for $100,000 and that cost $66,000 for a refund.
Prepare the journal entries for these transactions.Omit explanations.

Accepted Answer

The answer of Smith and Son's Department Store has a...

Question 9

On December 31,2017,the lender on a $5,700,120-day,10% note dated November 5,2017,will recognize: (Use a 365 day year and round your final answer to the nearest dollar. )

Accepted Answer

A) interest receivable,$187. 
B) interest receivable,$87. 
C) interest payable,$187. 
D) interest payable,$87. 
A) interest receivable,$187. 
B) interest receivable,$87. 
C) interest payable,$187. 
D) interest payable,$87.

Question 10

The direct write-off method records Uncollectible-Account Expense:

Accepted Answer

A) in the accounting period each sale occurs. 
B) at the end of the accounting period. 
C) when the specific account receivable is determined to be uncollectible. 
D) in the accounting period one year after the sale date. 
A) in the accounting period each sale occurs. 
B) at the end of the accounting period. 
C) when the specific account receivable is determined to be uncollectible. 
D) in the accounting period one year after the sale date.

Question 11

If a company wants to increase its quick ratio,it should consider:

Accepted Answer

A) buying equipment on account. 
B) paying off long-term notes payable. 
C) issuing long-term notes payable. 
D) collecting an accounts receivable. 
A) buying equipment on account. 
B) paying off long-term notes payable. 
C) issuing long-term notes payable. 
D) collecting an accounts receivable.

Question 12

Bird's Nest had net credit sales for the current period of $510,000 and average net receivables were $55,000.What is the days' sales outstanding? (Round any intermediary calculations to two decimal places and your final answer to the nearest day. )

Accepted Answer

A) 9 days 
B) 151 days 
C) 39 days 
D) 30 days 
A) 9 days 
B) 151 days 
C) 39 days 
D) 30 days

Question 13

An aging-of-accounts-receivable indicates that the amount of uncollectible accounts is $3,410.The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $300.The Accounts Receivable balance is $44,720.The amount of the adjusting entry for uncollectible accounts should be for:

Accepted Answer

A) $300. 
B) $3,110. 
C) $3,710. 
D) $3,410. 
A) $300. 
B) $3,110. 
C) $3,710. 
D) $3,410.

Question 14

The Daisy Company had net credit sales of $830,000 for the year.Cash sales for the year were $1,170,000.Its receivables at the beginning of the year were $45,000 and at the end of the year they had increased to $90,000.The Daisy Company has credit terms of net 30 days.Compute the days' sales outstanding and evaluate the ratio as strong or weak.(Round any intermediary calculations to two decimal places and your final answer to the nearest day. )

Accepted Answer

A) Days' sales outstanding 30 days;strong 
B) Days' sales outstanding 30 days;weak 
C) Days' sales outstanding 12 days;strong 
D) Days' sales outstanding 12 days;weak 
A) Days' sales outstanding 30 days;strong 
B) Days' sales outstanding 30 days;weak 
C) Days' sales outstanding 12 days;strong 
D) Days' sales outstanding 12 days;weak

Question 15

Which balance sheet account shows the amount of accounts receivable that the business does NOT expect to collect?

Accepted Answer

A) Unearned Sales Revenue 
B) Accounts Receivable 
C) Allowance for Uncollectible Accounts 
D) Uncollectible-Account Expense 
A) Unearned Sales Revenue 
B) Accounts Receivable 
C) Allowance for Uncollectible Accounts 
D) Uncollectible-Account Expense

Question 16

With regard to notes receivable,which of the following statements is CORRECT?

Accepted Answer

A) Notes receivable are less formal contracts than accounts receivable. 
B) Notes receivable are also called promissory notes because a written promise to pay is not required. 
C) All notes receivable require the borrower to pledge collateral. 
D) The borrower signs a written promise to pay the lender a definite sum at the maturity date,with interest. 
A) Notes receivable are less formal contracts than accounts receivable. 
B) Notes receivable are also called promissory notes because a written promise to pay is not required. 
C) All notes receivable require the borrower to pledge collateral. 
D) The borrower signs a written promise to pay the lender a definite sum at the maturity date,with interest.

Question 17

The balance in Accounts Receivable was $650,000 at the beginning of the year and $760,000 at the end of the year.Credit sales for the year totaled $4,130,000.During the year,$410,000 in customer accounts were written off.How much cash was collected from customers during the period?

Accepted Answer

A) $3,610,000 
B) $4,020,000 
C) $4,430,000 
D) $4,650,000 
A) $3,610,000 
B) $4,020,000 
C) $4,430,000 
D) $4,650,000

Question 18

The direct write-off method for uncollectible accounts receivable:

Accepted Answer

A) reports receivables at their net realizable value. 
B) does not use an Allowance for Uncollectible Accounts. 
C) is considered to follow Generally Accepted Accounting Principles. 
D) estimates uncollectible accounts as a percentage of sales. 
A) reports receivables at their net realizable value. 
B) does not use an Allowance for Uncollectible Accounts. 
C) is considered to follow Generally Accepted Accounting Principles. 
D) estimates uncollectible accounts as a percentage of sales.

Question 19

The two major types of receivables are accounts receivable and trade receivables.

Accepted Answer

A) True 
 B)False

Question 20

The percent-of-sales method of computing uncollectible accounts for Accounts Receivable is used by some companies because:

Accepted Answer

A) it ensures that Accounts Receivable are reported at net realizable value. 
B) it is more accurate than the aging method. 
C) it is easier and quicker to apply. 
D) it fine tunes their allowance for uncollectibles. 
A) it ensures that Accounts Receivable are reported at net realizable value. 
B) it is more accurate than the aging method. 
C) it is easier and quicker to apply. 
D) it fine tunes their allowance for uncollectibles.

To satisfy a performance obligation means that:

Days' sales outstanding tells a company how long it takes to collect its average level of receivables.

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 $1,300.Under the aging-of-receivables method,the Uncollectible-Account Expense at year-end is:

The maturity value of a $55,000 note at 10% for 7 months is: (Round your final answer to the nearest dollar. )

When a merchant sells merchandise and lets the customer pay with a VISA credit card:

On December 31,2017,the lender on a $5,700,120-day,10% note dated November 5,2017,will recognize: (Use a 365 day year and round your final answer to the nearest dollar. )

The direct write-off method records Uncollectible-Account Expense:

If a company wants to increase its quick ratio,it should consider:

Bird's Nest had net credit sales for the current period of $510,000 and average net receivables were $55,000.What is the days' sales outstanding? (Round any intermediary calculations to two decimal places and your final answer to the nearest day. )

Which balance sheet account shows the amount of accounts receivable that the business does NOT expect to collect?

With regard to notes receivable,which of the following statements is CORRECT?

The balance in Accounts Receivable was $650,000 at the beginning of the year and $760,000 at the end of the year.Credit sales for the year totaled $4,130,000.During the year,$410,000 in customer accounts were written off.How much cash was collected from customers during the period?

The direct write-off method for uncollectible accounts receivable:

The two major types of receivables are accounts receivable and trade receivables.

The percent-of-sales method of computing uncollectible accounts for Accounts Receivable is used by some companies because:

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

To satisfy a performance obligation means that:

Days' sales outstanding tells a company how long it takes to collect its average level of receivables.

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 $1,300.Under the aging-of-receivables method,the Uncollectible-Account Expense at year-end is:

The maturity value of a $55,000 note at 10% for 7 months is: (Round your final answer to the nearest dollar. )

When a merchant sells merchandise and lets the customer pay with a VISA credit card:

On December 31,2017,the lender on a $5,700,120-day,10% note dated November 5,2017,will recognize: (Use a 365 day year and round your final answer to the nearest dollar. )

The direct write-off method records Uncollectible-Account Expense:

If a company wants to increase its quick ratio,it should consider:

Bird's Nest had net credit sales for the current period of $510,000 and average net receivables were $55,000.What is the days' sales outstanding? (Round any intermediary calculations to two decimal places and your final answer to the nearest day. )

Which balance sheet account shows the amount of accounts receivable that the business does NOT expect to collect?

With regard to notes receivable,which of the following statements is CORRECT?

The balance in Accounts Receivable was $650,000 at the beginning of the year and $760,000 at the end of the year.Credit sales for the year totaled $4,130,000.During the year,$410,000 in customer accounts were written off.How much cash was collected from customers during the period?

The direct write-off method for uncollectible accounts receivable:

The two major types of receivables are accounts receivable and trade receivables.

The percent-of-sales method of computing uncollectible accounts for Accounts Receivable is used by some companies because:

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