Question 1

Which one of the following is not a primary problem associated with accounts receivable?

Accepted Answer

A)  Depreciating accounts receivable 
B)  Recognizing accounts receivable 
C)  Valuing accounts receivable 
D)  Disposing of accounts receivable 
A)  Depreciating accounts receivable 
B)  Recognizing accounts receivable 
C)  Valuing accounts receivable 
D)  Disposing of accounts receivable

Question 2

The maturity date of a 1-month note receivable dated June 30 is July 30.

Accepted Answer

A) True 
 B)False

Question 3

On February 7, Jackson Company sold goods on account to Phillips Enterprises for $5,200, terms 2/10, n/30. On March 9, Phillips gave Jackson a 60-day, 12% promissory note in settlement of the account. Record the sale and the acceptance of the promissory note on the books of Jackson Company.

Accepted Answer

The answer of On February 7, Jackson Company sold goods...

Question 4

Which board(s) has(have) faced bitter opposition when working to implement fair value measurement for financial instruments?

Accepted Answer

A)  FASB, but not IASB. 
B)  IASB, but not FASB. 
C)  both FASB and IASB. 
D)  neither FASB nor IASB.
IFRS: 
A)  FASB, but not IASB. 
B)  IASB, but not FASB. 
C)  both FASB and IASB. 
D)  neither FASB nor IASB.
IFRS:

Question 5

Under the allowance method of accounting for uncollectible accounts,

Accepted Answer

A)  the cash realizable value of accounts receivable is greater before an account is written off than after it is written off. 
B)  Bad Debt Expense is debited when a specific account is written off as uncollectible. 
C)  the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off. 
D)  Allowance for Doubtful Accounts is closed each year to Income Summary. 
A)  the cash realizable value of accounts receivable is greater before an account is written off than after it is written off. 
B)  Bad Debt Expense is debited when a specific account is written off as uncollectible. 
C)  the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off. 
D)  Allowance for Doubtful Accounts is closed each year to Income Summary.

Question 6

A debit balance in the Allowance for Doubtful Accounts

Accepted Answer

A)  is the normal balance for that account. 
B)  indicates that actual bad debt write-offs have exceeded previous provisions for bad debts. 
C)  indicates that actual bad debt write-offs have been less than what was estimated. 
D)  cannot occur if the percentage of sales method of estimating bad debts is used. 
A)  is the normal balance for that account. 
B)  indicates that actual bad debt write-offs have exceeded previous provisions for bad debts. 
C)  indicates that actual bad debt write-offs have been less than what was estimated. 
D)  cannot occur if the percentage of sales method of estimating bad debts is used.

Question 7

Short-term notes receivable are reported at

Accepted Answer

A)  cash (net) realizable value. 
B)  face value. 
C)  gross realizable value. 
D)  maturity value. 
A)  cash (net) realizable value. 
B)  face value. 
C)  gross realizable value. 
D)  maturity value.

Question 8

Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible.

Accepted Answer

A) True 
 B)False

Question 9

Allowance for Doubtful Accounts on the balance sheet

Accepted Answer

A)  is offset against total current assets. 
B)  increases the cash realizable value of accounts receivable. 
C)  appears under the heading "Other Assets." 
D)  is offset against accounts receivable. 
A)  is offset against total current assets. 
B)  increases the cash realizable value of accounts receivable. 
C)  appears under the heading "Other Assets." 
D)  is offset against accounts receivable.

Question 10

In 2018, Warehouse 13 had net credit sales of $750,000. On January 1, 2018, Allowance for Doubtful Accounts had a credit balance of $16,000. During 2018, $29,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivable basis). If the accounts receivable balance at December 31 was $150,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2018?

Accepted Answer

A)  $150,000 
B)  $29,000 
C)  $28,000 
D)  $31,000 
A)  $150,000 
B)  $29,000 
C)  $28,000 
D)  $31,000

Question 11

Syfy Company on July 15 sells merchandise on account to Eureka Co. for $5,000, terms 2/10, n/30. On July 20 Eureka Co. returns merchandise worth $2,000 to Syfy Company. On July 24 payment is received from Eureka Co. for the balance due. What is the amount of cash received?

Accepted Answer

A)  $2,900 
B)  $2,940 
C)  $3,000 
D)  $5,000 
A)  $2,900 
B)  $2,940 
C)  $3,000 
D)  $5,000

Question 12

Which of the following practices by a credit card company results in lower interest charges to the cardholder?

Accepted Answer

A)  The card company states interest as a monthly percentage rather than an annual percentage. 
B)  The card company allows a grace period before interest is accrued. 
C)  The card company allows cardholders to skip payments on their cards. 
D)  The card company calculates finance charges from the date of purchase to the date the amount is paid. 
A)  The card company states interest as a monthly percentage rather than an annual percentage. 
B)  The card company allows a grace period before interest is accrued. 
C)  The card company allows cardholders to skip payments on their cards. 
D)  The card company calculates finance charges from the date of purchase to the date the amount is paid.

Question 13

The direct write-off method of accounting for bad debts

Accepted Answer

A)  uses an allowance account. 
B)  uses a contra-asset account. 
C)  does not require estimates of bad debt losses. 
D)  is the preferred method under generally accepted accounting principles. 
A)  uses an allowance account. 
B)  uses a contra-asset account. 
C)  does not require estimates of bad debt losses. 
D)  is the preferred method under generally accepted accounting principles.

Question 14

Both the gross amount of receivables and the allowance for doubtful accounts should be reported in the financial statements.

Accepted Answer

A) True 
 B)False

Question 15

Joe's Supply Co. has the following transactions related to notes receivable during the last 2 months of 2018.
Nov. 1 Loaned $20,000 cash to Sara Rondelli on a 1-year, 12% note.
Dec. 11 Sold goods to Phair, Inc., receiving a $11,700, 90-day, 8% note.
16 Received an $12,000, 6-month, 9% note in exchange for Grace Tanner's outstanding accounts receivable.
31 Accrued interest revenue on all notes receivable.
Instructions
(a) Journalize the transactions for Joe's Supply Co.
(b) Record the collection of the Rondelli note at its maturity in 2019.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& *($20000

Question 16

If a company sells its accounts receivables to a factor,

Accepted Answer

A)  the seller pays a commission to the factor. 
B)  the factor pays a commission to the seller. 
C)  there is a gain on the sale of the receivables. 
D)  the seller defers recognition of sales revenue until the account is collected. 
A)  the seller pays a commission to the factor. 
B)  the factor pays a commission to the seller. 
C)  there is a gain on the sale of the receivables. 
D)  the seller defers recognition of sales revenue until the account is collected.

Question 17

Receivables are valued and reported in the balance sheet at their gross amount less any sales returns and allowances and less any cash discounts.

Accepted Answer

A) True 
 B)False

Question 18

Trade receivables occur when two companies trade or exchange notes receivables.

Accepted Answer

A) True 
 B)False

Question 19

Newton Company has the following accounts in its general ledger at July 31: Accounts Receivable $40,000 and Allowance for Doubtful Accounts $2,500. During August, the following transactions occurred.
Oct. 15 Sold $15,000 of accounts receivable to Fast Factors, Inc. who assesses a 3% finance charge.
25 Made sales of $800 on VISA credit cards. The credit card service charge is 2%.
Instructions
Journalize the transactions.

Accepted Answer

The answer of Newton Company has the following accounts in...

Question 20

The basic issues in accounting for notes receivable include each of the following except

Accepted Answer

A)  analyzing notes receivable. 
B)  disposing of notes receivable. 
C)  recognizing notes receivable. 
D)  valuing notes receivable. 
A)  analyzing notes receivable. 
B)  disposing of notes receivable. 
C)  recognizing notes receivable. 
D)  valuing notes receivable.

Which one of the following is not a primary problem associated with accounts receivable?

The maturity date of a 1-month note receivable dated June 30 is July 30.

On February 7, Jackson Company sold goods on account to Phillips Enterprises for $5,200, terms 2/10, n/30. On March 9, Phillips gave Jackson a 60-day, 12% promissory note in settlement of the account. Record the sale and the acceptance of the promissory note on the books of Jackson Company.

Which board(s) has(have) faced bitter opposition when working to implement fair value measurement for financial instruments?

Under the allowance method of accounting for uncollectible accounts,

A debit balance in the Allowance for Doubtful Accounts

Short-term notes receivable are reported at

Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible.

Allowance for Doubtful Accounts on the balance sheet

Syfy Company on July 15 sells merchandise on account to Eureka Co. for $5,000, terms 2/10, n/30. On July 20 Eureka Co. returns merchandise worth $2,000 to Syfy Company. On July 24 payment is received from Eureka Co. for the balance due. What is the amount of cash received?

Which of the following practices by a credit card company results in lower interest charges to the cardholder?

The direct write-off method of accounting for bad debts

Both the gross amount of receivables and the allowance for doubtful accounts should be reported in the financial statements.

If a company sells its accounts receivables to a factor,

Receivables are valued and reported in the balance sheet at their gross amount less any sales returns and allowances and less any cash discounts.

Trade receivables occur when two companies trade or exchange notes receivables.

The basic issues in accounting for notes receivable include each of the following except

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Exam 8: Accounting for Receivables

Which one of the following is not a primary problem associated with accounts receivable?

The maturity date of a 1-month note receivable dated June 30 is July 30.

On February 7, Jackson Company sold goods on account to Phillips Enterprises for $5,200, terms 2/10, n/30. On March 9, Phillips gave Jackson a 60-day, 12% promissory note in settlement of the account. Record the sale and the acceptance of the promissory note on the books of Jackson Company.

Which board(s) has(have) faced bitter opposition when working to implement fair value measurement for financial instruments?

Under the allowance method of accounting for uncollectible accounts,

A debit balance in the Allowance for Doubtful Accounts

Short-term notes receivable are reported at

Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible.

Allowance for Doubtful Accounts on the balance sheet

Syfy Company on July 15 sells merchandise on account to Eureka Co. for $5,000, terms 2/10, n/30. On July 20 Eureka Co. returns merchandise worth $2,000 to Syfy Company. On July 24 payment is received from Eureka Co. for the balance due. What is the amount of cash received?

Which of the following practices by a credit card company results in lower interest charges to the cardholder?

The direct write-off method of accounting for bad debts

Both the gross amount of receivables and the allowance for doubtful accounts should be reported in the financial statements.

If a company sells its accounts receivables to a factor,

Receivables are valued and reported in the balance sheet at their gross amount less any sales returns and allowances and less any cash discounts.

Trade receivables occur when two companies trade or exchange notes receivables.

The basic issues in accounting for notes receivable include each of the following except

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters