Question 1

A 30-day note dated June 13 has a maturity date of

Accepted Answer

A)  July 14. 
B)  July 13. 
C)  July 12. 
D)  July 11. 
A)  July 14. 
B)  July 13. 
C)  July 12. 
D)  July 11.

Question 2

If a company fails to record estimated bad debts expense

Accepted Answer

A)  cash realizable value is understated. 
B)  expenses are understated. 
C)  revenues are understated. 
D)  receivables are understated. 
A)  cash realizable value is understated. 
B)  expenses are understated. 
C)  revenues are understated. 
D)  receivables are understated.

Question 3

Which board(s) has(have) worked 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. 
A)  FASB but not IASB. 
B)  IASB but not FASB. 
C)  both FASB and IASB. 
D)  neither FASB nor IASB.

Question 4

Which receivables accounting and reporting issue is not essentially the same for IFRS and GAAP?

Accepted Answer

A)  The use of allowance accounts and the allowance method. 
B)  How to record discounts. 
C)  How to record factoring. 
D)  All of these are essentially the same for IFRS and GAAP. 
A)  The use of allowance accounts and the allowance method. 
B)  How to record discounts. 
C)  How to record factoring. 
D)  All of these are essentially the same for IFRS and GAAP.

Question 5

The financial statements of Georgi Manufacturing Company report net sales of $595000 and accounts receivable of $80000 and $60000 at the beginning and end of the year respectively. What is the accounts receivable turnover for Georgi?

Accepted Answer

A)  7.4 times 
B)  8.5 times 
C)  4.3 times 
D)  9.9 times 
A)  7.4 times 
B)  8.5 times 
C)  4.3 times 
D)  9.9 times

Question 6

An aging of a company's accounts receivable indicates that $6000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 credit balance the adjustment to record bad debts for the period will require a

Accepted Answer

A)  debit to Bad Debt Expense for $6000. 
B)  debit to Allowance for Doubtful Accounts for $5200. 
C)  debit to Bad Debt Expense for $5200. 
D)  credit to Allowance for Doubtful Accounts for $6000. 
A)  debit to Bad Debt Expense for $6000. 
B)  debit to Allowance for Doubtful Accounts for $5200. 
C)  debit to Bad Debt Expense for $5200. 
D)  credit to Allowance for Doubtful Accounts for $6000.

Question 7

In 2016 Winslow Company had net credit sales of $1250000. On January 1 2016 Allowance for Doubtful Accounts had a credit balance of $25000. During 2016 $32000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $360000 what is the required adjustment to the Allowance for Doubtful Accounts at December 31 2016?

Accepted Answer

A)  $29000 
B)  $36000 
C)  $43000 
D)  $6000 
A)  $29000 
B)  $36000 
C)  $43000 
D)  $6000

Question 8

When the due date of a note is stated in months the time factor in computing interest is the number of months divided by 360 days.

Accepted Answer

A) True 
 B)False

Question 9

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 10

The following information is available for Edmiston Company. $\begin{array}{lr}
\text { Beginning accounts receivable } & \$ 70,000 \
\text { Ending accounts receivable } & 110,000 \
\text { Net sales } & 990,000
\end{array}$ Instructions
Compute the accounts receivable turnover and the average collection period.

Accepted Answer

Accounts receivable turnover =

Question 11

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 12

Rivers Company had accounts receivable of $150000 on January 1 2016. The only transactions that affected accounts receivable during 2016 were net credit sales of $1500000 cash collections of $1400000 and accounts written off of $50000.
Instructions
(a) Compute the ending balance of accounts receivable.
(b) Compute the accounts receivable turnover for 2016.
(c) Compute the average collection period in days.

Accepted Answer

(a) 
 (b) $1500000/[

Question 13

Two bases for estimating uncollectible accounts are:

Accepted Answer

A)  percentage of assets and percentage of sales. 
B)  percentage of receivables and percentage of total revenue. 
C)  percentage of current assets and percentage of sales. 
D)  percentage of receivables and percentage of sales. 
A)  percentage of assets and percentage of sales. 
B)  percentage of receivables and percentage of total revenue. 
C)  percentage of current assets and percentage of sales. 
D)  percentage of receivables and percentage of sales.

Question 14

Interest is usually associated with

Accepted Answer

A)  accounts receivable. 
B)  notes receivable. 
C)  doubtful accounts. 
D)  bad debts. 
A)  accounts receivable. 
B)  notes receivable. 
C)  doubtful accounts. 
D)  bad debts.

Question 15

Retailers generally consider sales from the use of national credit card sales as a

Accepted Answer

A)  credit sale. 
B)  collection of an accounts receivable. 
C)  cash sale. 
D)  collection of a note receivable. 
A)  credit sale. 
B)  collection of an accounts receivable. 
C)  cash sale. 
D)  collection of a note receivable.

Question 16

A reasonable amount of uncollectible accounts is evidence

Accepted Answer

A)  that the credit policy is too strict. 
B)  that the credit policy is too lenient. 
C)  of a sound credit policy. 
D)  of poor judgments on the part of the credit manager. 
A)  that the credit policy is too strict. 
B)  that the credit policy is too lenient. 
C)  of a sound credit policy. 
D)  of poor judgments on the part of the credit manager.

Question 17

Your roommate is uncertain about the advantages of a promissory note. Compare the advantages of a note receivable with those of an account receivable.

Accepted Answer

A promissory note gives the holder a str

Question 18

Which of the following would require a compound journal entry?

Accepted Answer

A)  To record merchandise returned that was previously purchased on account. 
B)  To record sales on account. 
C)  To record purchases of inventory when a discount is offered for prompt payment. 
D)  To record collection of accounts receivable when a cash discount is taken. 
A)  To record merchandise returned that was previously purchased on account. 
B)  To record sales on account. 
C)  To record purchases of inventory when a discount is offered for prompt payment. 
D)  To record collection of accounts receivable when a cash discount is taken.

Question 19

Allowance for Doubtful Accounts is a contra asset account.

Accepted Answer

A) True 
 B)False

Question 20

In 2016 Warehouse 13 had net credit sales of $850000. On January 1 2016 Allowance for Doubtful Accounts had a credit balance of $18000. During 2016 $27000 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 $160000 what is the required adjustment to the Allowance for Doubtful Accounts at December 31 2016?

Accepted Answer

A)  $160000 
B)  $27000 
C)  $25000 
D)  $16000 
A)  $160000 
B)  $27000 
C)  $25000 
D)  $16000

Exam 9: Accounting for Receivables

A 30-day note dated June 13 has a maturity date of

If a company fails to record estimated bad debts expense

Which board(s) has(have) worked to implement fair value measurement for financial instruments?

Which receivables accounting and reporting issue is not essentially the same for IFRS and GAAP?

The financial statements of Georgi Manufacturing Company report net sales of $595000 and accounts receivable of $80000 and $60000 at the beginning and end of the year respectively. What is the accounts receivable turnover for Georgi?

An aging of a company's accounts receivable indicates that $6000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 credit balance the adjustment to record bad debts for the period will require a

When the due date of a note is stated in months the time factor in computing interest is the number of months divided by 360 days.

If a company sells its accounts receivables to a factor

The following information is available for Edmiston Company. Beginning accounts receivable \ 70,000 Ending accounts receivable 110,000 Net sales 990,000 Instructions Compute the accounts receivable turnover and the average collection period.

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

Two bases for estimating uncollectible accounts are:

Interest is usually associated with

Retailers generally consider sales from the use of national credit card sales as a

A reasonable amount of uncollectible accounts is evidence

Your roommate is uncertain about the advantages of a promissory note. Compare the advantages of a note receivable with those of an account receivable.

Which of the following would require a compound journal entry?

Allowance for Doubtful Accounts is a contra asset account.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

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