Question 1

A ____________________ is a signed agreement to pay a specified amount of money either on demand or at a definite future date.

Accepted Answer

The answer of A ____________________ is a signed agreement to...

Question 2

A company borrowed $10,000 by signing a 180-day promissory note at 9%. The total interest due on the maturity date is.

Accepted Answer

A) $900 
B) $75 
C) $450 
D) $300 
E) $1,800 
A) $900 
B) $75 
C) $450 
D) $300 
E) $1,800

Question 3

Converting receivables to cash before they are due is usually done by either (1) _______________________ or (2) ________________________________.

Accepted Answer

selling them to a fa

Question 4

A supplementary record created to maintain a separate account for each customer is called the ________________________.

Accepted Answer

accounts r

Question 5

Prudence Co. receives a $26,000, 90-day, 4% note receivable. What is the amount of interest that is due at maturity?

Accepted Answer

$26,000 *

Question 6

The person to whom a note is payable is known as the ______________.

Accepted Answer

The answer of The person to whom a note is...

Question 7

The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense reports the following selected amounts:   All sales are made on credit. Based on past experience, the company estimates 3.5% of ending account receivable to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Accepted Answer

A) Debit Bad Debts Expense $13,975; credit Allowance for Doubtful Accounts $13,975. 
B) Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225. 
C) Debit Bad Debts Expense $16,475; credit Allowance for Doubtful Accounts $16,475. 
D) Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350. 
E) Debit Bad Debts Expense $17,350; credit Allowance for Doubtful Accounts $17,350. 
A) Debit Bad Debts Expense $13,975; credit Allowance for Doubtful Accounts $13,975. 
B) Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225. 
C) Debit Bad Debts Expense $16,475; credit Allowance for Doubtful Accounts $16,475. 
D) Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350. 
E) Debit Bad Debts Expense $17,350; credit Allowance for Doubtful Accounts $17,350.

Question 8

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?

Accepted Answer

A) Relevance. 
B) Full disclosure. 
C) Evaluation. 
D) Materiality. 
E) Matching. 
A) Relevance. 
B) Full disclosure. 
C) Evaluation. 
D) Materiality. 
E) Matching.

Question 9

After adjustment, the balance in the Allowance for Doubtful Accounts has the effect of reducing Accounts Receivable to its estimated realizable value.

Accepted Answer

A) True 
 B)False

Question 10

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Accepted Answer

A) 37.8. 
B) 9.7. 
C) 68.3. 
D) 7.1. 
E) 51.7. 
A) 37.8. 
B) 9.7. 
C) 68.3. 
D) 7.1. 
E) 51.7.

Question 11

Jordan Co. uses the allowance method of accounting for uncollectible accounts. Jordan Co. accepted a $5,000, 12%, 90-day note dated May 16, from Beckam Co. in exchange for its past-due account receivable. Make the necessary general journal entries for Jordan 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

The answer of Jordan Co. uses the allowance method of...

Question 12

On May 31, Cray has $375,800 of accounts receivable. Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $14,250.
1. Prepare journal entries to record the following selected May transactions. The company uses the perpetual inventory system.
2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 balance sheet.
a. Sold $415,200 of merchandise (that cost $249,000) to customers on credit.
b. Received $465,800 cash in payment of accounts receivable.
c. Wrote off $15,800 of uncollectible accounts receivable.
d. In adjusting the accounts on May 31, its fiscal year-end, the company estimated that 4.0% of accounts receivable will be uncollectible.

Accepted Answer

@#IMG-DLM& Calculation: Accounts Receivable $375,8

Question 13

The maturity date of a note receivable:

Accepted Answer

A) Is the day of the credit sale. 
B) Is the day the note was signed. 
C) Is the day the note is due to be repaid. 
D) Is the date of the first payment. 
E) Is the last day of the month. 
A) Is the day of the credit sale. 
B) Is the day the note was signed. 
C) Is the day the note is due to be repaid. 
D) Is the date of the first payment. 
E) Is the last day of the month.

Question 14

The matching principle permits the use of the direct write-off method of accounting for uncollectible accounts when bad debts are very large in relation to a company's other financial statement items such as sales and net income.

Accepted Answer

A) True 
 B)False

Question 15

A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is an $800 debit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

Accepted Answer

A) $3,600 
B) $3,568 
C) $3,632 
D) $2,800 
E) $4,400 
A) $3,600 
B) $3,568 
C) $3,632 
D) $2,800 
E) $4,400

Question 16

Since pledged accounts receivables only serve as collateral for a loan and are not sold, it is not necessary to disclose the pledging.

Accepted Answer

A) True 
 B)False

Question 17

Companies follow both the matching principle and the materiality constraint when applying the direct write-off method.

Accepted Answer

A) True 
 B)False

Question 18

Owens Company uses the direct write-off method of accounting for uncollectible accounts receivable. On December 6, Year 1, Owens sold $6,300 of merchandise to the Valley Company. On August 8, Year 2, after numerous attempts to collect the account, Owens determined that the account of the Valley Company was uncollectible.
a. Prepare the journal entry required to record the transactions on August 8.
b. Assuming that the $6,300 is material, explain how the direct write-off method violates the matching principle in this case.

Accepted Answer

a. @#IMG-DLM& b. In this case, the Bad Debts Expen

Question 19

Jaspreet Industries accepts a $5,000, 90-day, 5% note receivable from a customer on an overdue Accounts Receivable. The amount due upon maturity is $5,062.50.
Interest = $5,000 × .05 × 90/360 = $62.50
Maturity value = $5,000 + 62.50 = $5,062.50

Accepted Answer

A) True 
 B)False

Question 20

The quality of receivables refers to the likelihood of collection without loss.

Accepted Answer

A) True 
 B)False

A ____________________ is a signed agreement to pay a specified amount of money either on demand or at a definite future date.

A company borrowed $10,000 by signing a 180-day promissory note at 9%. The total interest due on the maturity date is.

Converting receivables to cash before they are due is usually done by either (1) _ or (2) __________.

A supplementary record created to maintain a separate account for each customer is called the ________________________.

Prudence Co. receives a $26,000, 90-day, 4% note receivable. What is the amount of interest that is due at maturity?

The person to whom a note is payable is known as the ______________.

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?

After adjustment, the balance in the Allowance for Doubtful Accounts has the effect of reducing Accounts Receivable to its estimated realizable value.

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

The maturity date of a note receivable:

The matching principle permits the use of the direct write-off method of accounting for uncollectible accounts when bad debts are very large in relation to a company's other financial statement items such as sales and net income.

Since pledged accounts receivables only serve as collateral for a loan and are not sold, it is not necessary to disclose the pledging.

Companies follow both the matching principle and the materiality constraint when applying the direct write-off method.

Jaspreet Industries accepts a $5,000, 90-day, 5% note receivable from a customer on an overdue Accounts Receivable. The amount due upon maturity is $5,062.50. Interest = $5,000 × .05 × 90/360 = $62.50 Maturity value = $5,000 + 62.50 = $5,062.50

The quality of receivables refers to the likelihood of collection without loss.

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

Reporting and Analyzing Partnerships

Filters

Exam 7: Reporting and Analyzing Receivables

A ____________________ is a signed agreement to pay a specified amount of money either on demand or at a definite future date.

A company borrowed $10,000 by signing a 180-day promissory note at 9%. The total interest due on the maturity date is.

Converting receivables to cash before they are due is usually done by either (1) _______________________ or (2) ________________________________.

A supplementary record created to maintain a separate account for each customer is called the ________________________.

Prudence Co. receives a $26,000, 90-day, 4% note receivable. What is the amount of interest that is due at maturity?

The person to whom a note is payable is known as the ______________.

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?

After adjustment, the balance in the Allowance for Doubtful Accounts has the effect of reducing Accounts Receivable to its estimated realizable value.

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

The maturity date of a note receivable:

The matching principle permits the use of the direct write-off method of accounting for uncollectible accounts when bad debts are very large in relation to a company's other financial statement items such as sales and net income.

Since pledged accounts receivables only serve as collateral for a loan and are not sold, it is not necessary to disclose the pledging.

Companies follow both the matching principle and the materiality constraint when applying the direct write-off method.

Jaspreet Industries accepts a $5,000, 90-day, 5% note receivable from a customer on an overdue Accounts Receivable. The amount due upon maturity is $5,062.50. Interest = $5,000 × .05 × 90/360 = $62.50 Maturity value = $5,000 + 62.50 = $5,062.50

The quality of receivables refers to the likelihood of collection without loss.

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

Reporting and Analyzing Partnerships

Filters

Converting receivables to cash before they are due is usually done by either (1) _ or (2) __________.