Question 1

If the interest rate on a note is 12% and the principal was $60,000,what is the interest expense for the 8 month note? (Round your final answer to the nearest dollar. )

Accepted Answer

A)  $3,600
B)  $4,800
C)  $7,200
D)  $7,800 B

Question 2

The balance in Accounts Receivable at the beginning of the year was $530,000.The balance in Accounts Receivable at the end of the year was $710,000.Customer accounts of $480,000 were written off.The company collected $4,100,000 from credit customers and $1,030,000 from cash customers.What are credit sales for the year?

Accepted Answer

A)  $4,400,000
B)  $4,100,000
C)  $4,580,000
D)  $4,760,000 D

Question 3

Johnsen Company earned service revenue on account of $300,000 and had cash collections of $130,000 for the year.During the year,uncollectible accounts receivable of $2,000 were written off.At December 31,an aging-of-accounts receivable schedule indicated that Johnsen Company will not collect $10,000 of accounts receivable.There was a credit balance of $2,100 in the Allowance for Uncollectible Accounts at the beginning of the year.
Required:
Journalize the entries to record (1)service revenue, (2)cash collections, (3)write-off of the uncollectible receivables and (4)the adjusting entry to record Uncollectible-Account Expense.Ignore Cost of Goods Sold.Explanations are not required.

Accepted Answer

The answer of Johnsen Company earned service revenue on account...

Question 4

The principal amount of a note is the amount borrowed by the creditor.

Accepted Answer

A) True 
 B)False

Question 5

A company has $28,000 in cash and cash equivalents,$88,000 in short-term investments,$122,000 in net current receivables,$64,000 in inventory,$14,000 of prepaid insurance and $11,000 of supplies.The total current liabilities of the firm are $304,000.The quick ratio of the company is: (Round your final answer to two decimal places. )

Accepted Answer

A)  0.38.
B)  0.78.
C)  0.99.
D)  1.08.

Question 6

Tanya Company has the following information:  What are collections from customers during the current year?

Accepted Answer

A)  $1,626,000
B)  $1,640,000
C)  $2,626,000
D)  $2,640,000

Question 7

Complete the following chart by filling in the missing items.Use a 365-day year.

Accepted Answer

The answer of Complete the following chart by filling in...

Question 8

Regarding the two parties to a note,the:

Accepted Answer

A)  creditor has a note receivable and the debtor has a note payable.
B)  creditor has a note payable and the debtor has a note receivable.
C)  creditor is also called the maker of the note.
D)  debtor is also called the lender.

Question 9

Fourth Company receives a note from a customer for a $15,000 sale.On the date of sale,what journal entry did Fourth Company prepare? Ignore cost of goods sold.

Accepted Answer

A)  debit Accounts Receivable for $15,000 and credit Sales Revenue for $15,000
B)  debit Notes Receivable for $15,000 and credit Cash for $15,000
C)  debit Notes Receivable for $15,000 and credit Sales Revenue for $15,000
D)  debit Cash for $15,000 and credit Notes Receivable for $15,000

Question 10

The maturity value of a note is the sum of the principal amount of a note plus the interest over the term of the note.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is considered to be a more stringent measure of a company's ability to pay its current liabilities than the current ratio?

Accepted Answer

A)  accounts payable
B)  quick ratio
C)  liquidity ratio
D)  collection period

Question 12

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.The company uses the percent-of-sales method.Its credit department has determined that uncollectible accounts will amount to 2% of net credit sales.
Required:
1.Prepare the year- end adjusting journal entry.Omit the explanation.
  2.Determine the adjusted balances for Accounts Receivable and the Allowance for Uncollectible Accounts.
3.Determine the net realizable value of accounts receivable at the end of the year.

Accepted Answer

The answer of At December 31 of the current year,Accounts...

Question 13

Emma Jones Company has the following information available:  Did the quick ratio improve from 2018 to 2019?

Accepted Answer

A)  No.
B)  Yes.
C)  It stayed the same.
D)  There is not enough information.

Question 14

Robin's Nest had net credit sales for the current period of $580,000 and average net receivables were $45,000.What is Robin's Nest's average daily sales? (Use a 365-day year for your calculations.Round your final answer to the nearest dollar. )

Accepted Answer

A)  $13
B)  $28
C)  $123
D)  $1,589

Question 15

Consider the following INDEPENDENT situations for Tommy Company:
a.The Allowance for Uncollectible Accounts has a $1,200 credit balance prior to adjustment.Net credit sales during the year are $830,000 and 2% are estimated to be uncollectible.Accounts Receivable has a balance of $110,000 at the end of the year.The company uses the percent-of-sales method.
b.The Allowance for Uncollectible Accounts has a $900 credit balance prior to adjustment.Based on an aging schedule of accounts receivable prepared at the end of the year,$20,000 of accounts receivable are estimated to be uncollectible.Accounts Receivable has a balance of $104,000 at the end of the year.
c.The Allowance for Uncollectible Accounts has a $16,300 debit balance prior to adjustment.Based on an aging schedule of accounts receivable prepared at the end of the year,$200,000 of accounts receivable are estimated to be uncollectible.Accounts Receivable has a balance of $958,000 at the end of the year.
d.The Allowance for Uncollectible Accounts has a $500 credit balance prior to adjustment.Net credit sales during the year are $900,000 and 1% are estimated to be uncollectible.Accounts Receivable has a balance of $825,000 at the end of the year.The company uses the percent-of-sales method.
Required:
Prepare the adjusting journal entries for uncollectible accounts for each INDEPENDENT situation.Explanations are not required.

Accepted Answer

The answer of Consider the following INDEPENDENT situations for Tommy...

Question 16

When calculating the quick ratio,________ is included in the numerator.

Accepted Answer

A)  inventory
B)  prepaid insurance
C)  supplies
D)  short-term marketable securities

Question 17

Accounts receivable are reported on the balance sheet at their net realizable value.

Accepted Answer

A) True 
 B)False

Question 18

The allowance method records Uncollectible-Account Expense:

Accepted Answer

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

Question 19

Companies are not required to estimate expected future returns as part of the end-of-period adjusting entry process.

Accepted Answer

A) True 
 B)False

Question 20

The following item appeared on a balance sheet:  The gross balance in Accounts Receivable before the allowance was deducted was:

Accepted Answer

A)  $1,406,888.
B)  $1,435,600.
C)  $1,464,312.
D)  none of the above

Exam 5: Receivables and Revenue

If the interest rate on a note is 12% and the principal was $60,000,what is the interest expense for the 8 month note? (Round your final answer to the nearest dollar. )

The principal amount of a note is the amount borrowed by the creditor.

Tanya Company has the following information: What are collections from customers during the current year?

Complete the following chart by filling in the missing items.Use a 365-day year.

Regarding the two parties to a note,the:

Fourth Company receives a note from a customer for a $15,000 sale.On the date of sale,what journal entry did Fourth Company prepare? Ignore cost of goods sold.

The maturity value of a note is the sum of the principal amount of a note plus the interest over the term of the note.

Which of the following is considered to be a more stringent measure of a company's ability to pay its current liabilities than the current ratio?

Emma Jones Company has the following information available: Did the quick ratio improve from 2018 to 2019?

Robin's Nest had net credit sales for the current period of $580,000 and average net receivables were $45,000.What is Robin's Nest's average daily sales? (Use a 365-day year for your calculations.Round your final answer to the nearest dollar. )

When calculating the quick ratio,________ is included in the numerator.

Accounts receivable are reported on the balance sheet at their net realizable value.

The allowance method records Uncollectible-Account Expense:

Companies are not required to estimate expected future returns as part of the end-of-period adjusting entry process.

The following item appeared on a balance sheet: The gross balance in Accounts Receivable before the allowance was deducted was: