Question 1

U.S.GAAP permits the reversal of impairment losses recorded on receivables.

Accepted Answer

A) True 
 B)False

Question 2

Under IFRS, there is a specific standard that mandates segregation of receivables with different characteristics.

Accepted Answer

A) True 
 B)False

Question 3

In which account are postage stamps classified?

Accepted Answer

A)  Cash. 
B)  Office supplies. 
C)  Receivables. 
D)  Inventory. 
A)  Cash. 
B)  Office supplies. 
C)  Receivables. 
D)  Inventory.

Question 4

What is a possible reason for accounts receivable turnover to increase from one year to the next year

Accepted Answer

A)  Decreased credit sales during a recession. 
B)  Write-off uncollectible receivables. 
C)  Granting credit to customers with lower credit quality. 
D)  Improved collection process. 
A)  Decreased credit sales during a recession. 
B)  Write-off uncollectible receivables. 
C)  Granting credit to customers with lower credit quality. 
D)  Improved collection process.

Question 5

Trade discounts are used to avoid frequent changes in catalogs and to alter prices for different quantities purchased.

Accepted Answer

A) True 
 B)False

Question 6

At the close of its first year of operations, December 31, 2014, Ming Company had accounts receivable of $1,080,000, after deducting the related allowance for doubtful accounts. During 2014, the company had charges to bad debt expense of $180,000 and wrote off, as uncollectible, accounts receivable of $80,000. What should the company report on its balance sheet at December 31, 2014, as accounts receivable before the allowance for doubtful accounts?

Accepted Answer

A)  $1,340,000 
B)  $1,180,000 
C)  $980,000 
D)  $880,000 
A)  $1,340,000 
B)  $1,180,000 
C)  $980,000 
D)  $880,000

Question 7

Companies record and report long-term notes receivable at the present value of the cash they expect to collect.

Accepted Answer

A) True 
 B)False

Question 8

Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and sales on credit during the year of $24 million. There is also a credit balance of $12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year?

Accepted Answer

A)  $ 532,000. 
B)  $ 520,000. 
C)  $1,920,000. 
D)  $ 508,000. 
A)  $ 532,000. 
B)  $ 520,000. 
C)  $1,920,000. 
D)  $ 508,000.

Question 9

Geary Co. assigned $800,000 of accounts receivable to Kwik Finance Co. as security for a loan of $670,000. Kwik charged a 2% commission on the amount of the loan; the interest rate on the note was 10%. During the first month, Geary collected $220,000 on assigned accounts after deducting $760 of discounts. Geary accepted returns worth $2,700 and wrote off assigned accounts totaling $5,960.The amount of cash Geary received from Kwik at the time of the assignment was

Accepted Answer

A)  $603,000. 
B)  $654,000. 
C)  $656,600. 
D)  $670,000. 
A)  $603,000. 
B)  $654,000. 
C)  $656,600. 
D)  $670,000.

Question 10

If a company purchases merchandise on terms of 1/10, n/30, the cash discount available (assuming a 360-day year) is equivalent to an effective annual interest rate of

Accepted Answer

A)  1% 
B)  12% 
C)  18% 
D)  30% 
A)  1% 
B)  12% 
C)  18% 
D)  30%

Question 11

Which of the following is considered cash?

Accepted Answer

A)  Certificates of deposit (CDs) 
B)  Money market checking accounts 
C)  Money market savings certificates 
D)  Postdated checks 
A)  Certificates of deposit (CDs) 
B)  Money market checking accounts 
C)  Money market savings certificates 
D)  Postdated checks

Question 12

Steinert Company has the following items at year-end:   Steinert should report cash and cash equivalents of

Accepted Answer

A)  $35,000. 
B)  $35,500. 
C)  $43,700. 
D)  $45,800. 
A)  $35,000. 
B)  $35,500. 
C)  $43,700. 
D)  $45,800.

Question 13

The IFRS approach for derecognizing a receivable focuses on which of the following?

Accepted Answer

A)  Risks 
B)  Rewards 
C)  Loss of control 
D)  All of these answers choices are correct. 
A)  Risks 
B)  Rewards 
C)  Loss of control 
D)  All of these answers choices are correct.

U.S.GAAP permits the reversal of impairment losses recorded on receivables.

Under IFRS, there is a specific standard that mandates segregation of receivables with different characteristics.

In which account are postage stamps classified?

What is a possible reason for accounts receivable turnover to increase from one year to the next year

Trade discounts are used to avoid frequent changes in catalogs and to alter prices for different quantities purchased.

Companies record and report long-term notes receivable at the present value of the cash they expect to collect.

If a company purchases merchandise on terms of 1/10, n/30, the cash discount available (assuming a 360-day year) is equivalent to an effective annual interest rate of

Which of the following is considered cash?

Steinert Company has the following items at year-end: Steinert should report cash and cash equivalents of

The IFRS approach for derecognizing a receivable focuses on which of the following?

Financial Accounting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

Filters

Exam 7: Cash and Receivables

U.S.GAAP permits the reversal of impairment losses recorded on receivables.

Under IFRS, there is a specific standard that mandates segregation of receivables with different characteristics.

In which account are postage stamps classified?

What is a possible reason for accounts receivable turnover to increase from one year to the next year

Trade discounts are used to avoid frequent changes in catalogs and to alter prices for different quantities purchased.

Companies record and report long-term notes receivable at the present value of the cash they expect to collect.

If a company purchases merchandise on terms of 1/10, n/30, the cash discount available (assuming a 360-day year) is equivalent to an effective annual interest rate of

Which of the following is considered cash?

Steinert Company has the following items at year-end: Steinert should report cash and cash equivalents of

The IFRS approach for derecognizing a receivable focuses on which of the following?

Financial Accounting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

Filters