Question 1

When a note is written to settle an open account, no entry is necessary.

Accepted Answer

A) True 
 B)False

Question 2

Journalize the following transactions for Lucite Company.
November 14 Received a $4,800.00, 90-day, 9% note from Alan Albertson in payment of his account. December 31 Accrued interest on the Albertson note.
February 12 Received the amount due from Albertson on his note.

Accepted Answer

The answer of Journalize the following transactions for Lucite Company.
November...

Question 3

Determine the due date and the amount of interest due at maturity on the following notes:

Accepted Answer

The answer of Determine the due date and the amount...

Question 4

A note receivable due in 18 months is listed on the balance sheet under the caption

Accepted Answer

A)  long-term liabilities 
B)  fixed assets 
C)  current assets 
D)  investments 
A)  long-term liabilities 
B)  fixed assets 
C)  current assets 
D)  investments

Question 5

List at least three indicators that a receivable may be uncollectible.

Accepted Answer

Answers may vary and should include thre

Question 6

Jefferson uses the percent of method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

Accepted Answer

A)  Uncollectible accounts are estimated to be $55,500. 
B)  Uncollectible accounts are estimated to be $111,000. 
C)  Bad debt expense is estimated to be $5,550. 
D)  Bad debt expense is estimated to be $11,100. 
A)  Uncollectible accounts are estimated to be $55,500. 
B)  Uncollectible accounts are estimated to be $111,000. 
C)  Bad debt expense is estimated to be $5,550. 
D)  Bad debt expense is estimated to be $11,100.

Question 7

The amount for which a promissory note is written is called the

Accepted Answer

A)  realizable value 
B)  maturity value 
C)  face value 
D)  proceeds 
A)  realizable value 
B)  maturity value 
C)  face value 
D)  proceeds

Question 8

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

Accepted Answer

A) True 
 B)False

Question 9

Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note?

Accepted Answer

A)  Notes Receivable 6,000
Accounts Receivable-Dame Company 6,000 
B)  Notes Receivable 6,090
Accounts Receivable-Dame Company 6,090 
C)  Notes Receivable 6,090
Accounts Receivable-Dame Company 6,000
Interest Revenue 90 
D)  Notes Receivable 6,000
Interest Revenue 90
Accounts Receivable-Dame Company 6,000
Interest Revenue 90 
A)  Notes Receivable 6,000
Accounts Receivable-Dame Company 6,000 
B)  Notes Receivable 6,090
Accounts Receivable-Dame Company 6,090 
C)  Notes Receivable 6,090
Accounts Receivable-Dame Company 6,000
Interest Revenue 90 
D)  Notes Receivable 6,000
Interest Revenue 90
Accounts Receivable-Dame Company 6,000
Interest Revenue 90

Question 10

Which statement is not true?

Accepted Answer

A)  Current assets are normally reported in order of their liquidity. 
B)  Disclosures related to receivables are reported on the financial statement notes. 
C)  Cash and cash equivalents are the first items reported under current assets. 
D)  All receivables that are expected to be realized in cash beyond 265 days are reported in the non­current assets section. 
A)  Current assets are normally reported in order of their liquidity. 
B)  Disclosures related to receivables are reported on the financial statement notes. 
C)  Cash and cash equivalents are the first items reported under current assets. 
D)  All receivables that are expected to be realized in cash beyond 265 days are reported in the non­current assets section.

Question 11

On the basis of the following data related to assets due within one year for Webb Co., prepare a partial balance sheet in good form at December 31. Show total current assets.

Accepted Answer

The answer of On the basis of the following data...

Question 12

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000. What is the net realizable value of the accounts receivable?

Accepted Answer

A)  $51,000 
B)  $289,000 
C)  $340,000 
D)  $391,000 
A)  $51,000 
B)  $289,000 
C)  $340,000 
D)  $391,000

Question 13

The amount of the promissory note plus the interest earned on the due date is called the

Accepted Answer

A)  interest value 
B)  maturity value 
C)  face value 
D)  issuance value 
A)  interest value 
B)  maturity value 
C)  face value 
D)  issuance value

Question 14

The maturity value of a note receivable is always the same as its face value.

Accepted Answer

A) True 
 B)False

Question 15

Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

Accepted Answer

A)  at the end of each accounting period 
B)  when a credit sale is past due 
C)  whenever a predetermined amount of credit sales have been made 
D)  when an account is determined to be worthless 
A)  at the end of each accounting period 
B)  when a credit sale is past due 
C)  whenever a predetermined amount of credit sales have been made 
D)  when an account is determined to be worthless

Question 16

The following are the current assets of Barnes Co. as of December 31:   Prepare the current assets section of the balance sheet.

Accepted Answer

The answer of The following are the current assets of...

Question 17

Other receivables include nontrade receivables such as loans to company officers.

Accepted Answer

A) True 
 B)False

Question 18

Match each description to the appropriate term a-d). Each term may be used more than once.
-This method focuses on the balance sheet.

Accepted Answer

A) Direct write-off method 
B) Aging of receivables method 
C) Percent of sales method 
D) Allowance method 
A) Direct write-off method 
B) Aging of receivables method 
C) Percent of sales method 
D) Allowance method

Question 19

Match each description to the appropriate term a-h).
-The amount charged for using the money of another party

Accepted Answer

A) Face amount 
B) Term 
C) Interest 
D) Maturity value 
E) Dishonored note
F)Maker
G)Notes receivable
H)Interest rate 
A) Face amount 
B) Term 
C) Interest 
D) Maturity value 
E) Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Question 20

Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. Harper Company prepares financial statements on March 31. What adjusting entry should be made before the financial statements can be prepared?

Accepted Answer

A)  Cash 200 Interest Revenue 200 
B)  Interest Receivable Interest Revenue
800
800 
C)  Interest Receivable Interest Revenue
200
200 
D)  Note Receivable Cash
40,000
40,000 
A)  Cash 200 Interest Revenue 200 
B)  Interest Receivable Interest Revenue
800
800 
C)  Interest Receivable Interest Revenue
200
200 
D)  Note Receivable Cash
40,000
40,000

Exam 8: Receivables

When a note is written to settle an open account, no entry is necessary.

Journalize the following transactions for Lucite Company. November 14 Received a $4,800.00, 90-day, 9% note from Alan Albertson in payment of his account. December 31 Accrued interest on the Albertson note. February 12 Received the amount due from Albertson on his note.

Determine the due date and the amount of interest due at maturity on the following notes:

A note receivable due in 18 months is listed on the balance sheet under the caption

List at least three indicators that a receivable may be uncollectible.

Jefferson uses the percent of method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

The amount for which a promissory note is written is called the

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note?

Which statement is not true?

On the basis of the following data related to assets due within one year for Webb Co., prepare a partial balance sheet in good form at December 31. Show total current assets.

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000. What is the net realizable value of the accounts receivable?

The amount of the promissory note plus the interest earned on the due date is called the

The maturity value of a note receivable is always the same as its face value.

Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

The following are the current assets of Barnes Co. as of December 31: Prepare the current assets section of the balance sheet.

Other receivables include nontrade receivables such as loans to company officers.

Match each description to the appropriate term a-d). Each term may be used more than once. -This method focuses on the balance sheet.

Match each description to the appropriate term a-h). -The amount charged for using the money of another party

Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. Harper Company prepares financial statements on March 31. What adjusting entry should be made before the financial statements can be prepared?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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