Question 1

Three accounting issues associated with accounts receivable are

Accepted Answer

A) depreciating, returns, and valuing. 
B) depreciating, valuing, and collecting. 
C) recognizing, valuing, and disposing. 
D) accrual, bad debts, and disposing. 
A) depreciating, returns, and valuing. 
B) depreciating, valuing, and collecting. 
C) recognizing, valuing, and disposing. 
D) accrual, bad debts, and disposing.

Question 2

The maturity value of a $5,000, 9%, 60-day note receivable dated February 10th is

Accepted Answer

A) $5,000. 
B) $5,038. 
C) $5,075. 
D) $5,450. 
A) $5,000. 
B) $5,038. 
C) $5,075. 
D) $5,450.

Question 3

The allowance method of accounting for uncollectible accounts is required if

Accepted Answer

A) the company makes any credit sales. 
B) bad debts are significant in amount. 
C) the company is a retailer. 
D) the company charges interest on accounts receivable. 
A) the company makes any credit sales. 
B) bad debts are significant in amount. 
C) the company is a retailer. 
D) the company charges interest on accounts receivable.

Question 4

An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 debit balance, the adjustment to record bad debts for the period will require a

Accepted Answer

A) debit to Bad Debt Expense for $2,200. 
B) debit to Bad Debt Expense for $3,000. 
C) debit to Bad Debt Expense for $3,800. 
D) credit to Allowance for Doubtful Accounts for $800. 
A) debit to Bad Debt Expense for $2,200. 
B) debit to Bad Debt Expense for $3,000. 
C) debit to Bad Debt Expense for $3,800. 
D) credit to Allowance for Doubtful Accounts for $800.

Question 5

Using the following information:   During 2015, sales on account were $145,000 and collections on account were $100,000. Also during 2015, the company wrote off $4,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectible accounts should be estimated at $40,000. Bad debt expense for 2015 is

Accepted Answer

A) $4,000. 
B) $5,000. 
C) $9,000 
D) $40,000. 
A) $4,000. 
B) $5,000. 
C) $9,000 
D) $40,000.

Question 6

The two key parties to a note are the maker and the payee.

Accepted Answer

A) True 
 B)False

Question 7

Receivables might be sold to

Accepted Answer

A) lengthen the cash-to-cash operating cycle. 
B) take advantage of deep discounts on the cash realizable value of receivables. 
C) generate cash quickly. 
D) finance companies at an amount greater than cash realizable value. 
A) lengthen the cash-to-cash operating cycle. 
B) take advantage of deep discounts on the cash realizable value of receivables. 
C) generate cash quickly. 
D) finance companies at an amount greater than cash realizable value.

Question 8

The retailer considers Visa and MasterCard sales as

Accepted Answer

A) cash sales. 
B) promissory sales. 
C) credit sales. 
D) contingent sales. 
A) cash sales. 
B) promissory sales. 
C) credit sales. 
D) contingent sales.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

Accepted Answer

A) will increase income in the period it is collected. 
B) will decrease income in the period it is collected. 
C) requires a correcting entry for the period in which the account was written off. 
D) does not affect income in the period it is collected. 
A) will increase income in the period it is collected. 
B) will decrease income in the period it is collected. 
C) requires a correcting entry for the period in which the account was written off. 
D) does not affect income in the period it is collected.

Question 11

An alternative name for Bad Debt Expense is

Accepted Answer

A) Deadbeat Expense. 
B) Uncollectible Accounts Expense. 
C) Collection Expense. 
D) Credit Loss Expense. 
A) Deadbeat Expense. 
B) Uncollectible Accounts Expense. 
C) Collection Expense. 
D) Credit Loss Expense.

Question 12

Which of the following would be considered as an unlikely occurrence?

Accepted Answer

A) Manufacturer offers a cash discount to a wholesaler. 
B) Wholesaler offers a cash discount to a retailer. 
C) Retailer offers a cash discount to a customer. 
D) All of these answers are correct. 
A) Manufacturer offers a cash discount to a wholesaler. 
B) Wholesaler offers a cash discount to a retailer. 
C) Retailer offers a cash discount to a customer. 
D) All of these answers are correct.

Question 13

The method of accounting for uncollectible accounts that results in a better matching of expenses with revenues is the

Accepted Answer

A) aging accounts receivable method. 
B) direct write-off method. 
C) percentage of receivables method. 
D) percentage of sales method. 
A) aging accounts receivable method. 
B) direct write-off method. 
C) percentage of receivables method. 
D) percentage of sales method.

Question 14

A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services.

Accepted Answer

A) True 
 B)False

Question 15

Accounts receivable are the result of cash and credit sales.

Accepted Answer

A) True 
 B)False

Question 16

A company that receives an interest bearing note receivable will

Accepted Answer

A) debit Notes Receivable for the maturity value of the note. 
B) credit Notes Receivable for the maturity value of the note. 
C) debit Notes Receivable for the face value of the note. 
D) credit Notes Receivable for the face value of the note. 
A) debit Notes Receivable for the maturity value of the note. 
B) credit Notes Receivable for the maturity value of the note. 
C) debit Notes Receivable for the face value of the note. 
D) credit Notes Receivable for the face value of the note.

Question 17

The average collection period is computed by dividing

Accepted Answer

A) net credit sales by average gross accounts receivable. 
B) net credit sales by ending gross accounts receivable. 
C) the accounts receivable turnover by 365 days. 
D) 365 days by the accounts receivable turnover. 
A) net credit sales by average gross accounts receivable. 
B) net credit sales by ending gross accounts receivable. 
C) the accounts receivable turnover by 365 days. 
D) 365 days by the accounts receivable turnover.

Question 18

If a retailer regularly sells its receivables to a factor, the service charge of the factor should be classified as a(n)

Accepted Answer

A) selling expense. 
B) interest expense. 
C) other expense. 
D) contra asset. 
A) selling expense. 
B) interest expense. 
C) other expense. 
D) contra asset.

Question 19

A note receivable is a negotiable instrument which

Accepted Answer

A) eliminates the need for a bad debts allowance. 
B) can be transferred to another party by endorsement. 
C) takes the place of checks in a business firm. 
D) can only be collected by a bank. 
A) eliminates the need for a bad debts allowance. 
B) can be transferred to another party by endorsement. 
C) takes the place of checks in a business firm. 
D) can only be collected by a bank.

Question 20

The percentage of sales basis for estimating uncollectible accounts always results in more Bad Debt Expense being recognized than the percentage of receivables basis.

Accepted Answer

A) True 
 B)False

Three accounting issues associated with accounts receivable are

The maturity value of a $5,000, 9%, 60-day note receivable dated February 10th is

The allowance method of accounting for uncollectible accounts is required if

An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 debit balance, the adjustment to record bad debts for the period will require a

The two key parties to a note are the maker and the payee.

Receivables might be sold to

The retailer considers Visa and MasterCard sales as

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

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

An alternative name for Bad Debt Expense is

Which of the following would be considered as an unlikely occurrence?

The method of accounting for uncollectible accounts that results in a better matching of expenses with revenues is the

A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services.

Accounts receivable are the result of cash and credit sales.

A company that receives an interest bearing note receivable will

The average collection period is computed by dividing

If a retailer regularly sells its receivables to a factor, the service charge of the factor should be classified as a(n)

A note receivable is a negotiable instrument which

The percentage of sales basis for estimating uncollectible accounts always results in more Bad Debt Expense being recognized than the percentage of receivables basis.

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

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Exam 8: Accounting for Receivables

Three accounting issues associated with accounts receivable are

The maturity value of a $5,000, 9%, 60-day note receivable dated February 10th is

The allowance method of accounting for uncollectible accounts is required if

An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 debit balance, the adjustment to record bad debts for the period will require a

The two key parties to a note are the maker and the payee.

Receivables might be sold to

The retailer considers Visa and MasterCard sales as

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

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

An alternative name for Bad Debt Expense is

Which of the following would be considered as an unlikely occurrence?

The method of accounting for uncollectible accounts that results in a better matching of expenses with revenues is the

A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services.

Accounts receivable are the result of cash and credit sales.

A company that receives an interest bearing note receivable will

The average collection period is computed by dividing

If a retailer regularly sells its receivables to a factor, the service charge of the factor should be classified as a(n)

A note receivable is a negotiable instrument which

The percentage of sales basis for estimating uncollectible accounts always results in more Bad Debt Expense being recognized than the percentage of receivables basis.

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters