Question 1

The party to a promissory note that agrees to repay money on the maturity date of the note is called the

Accepted Answer

A) Lender 
B) Maker of the note 
C) Payee of the note 
D) Recipient of the note 
A) Lender 
B) Maker of the note 
C) Payee of the note 
D) Recipient of the note

Question 2

The maker of a note recognizes on its income statement.

Accepted Answer

The answer of The maker of a note recognizes on...

Question 3

Under the allowance method of accounting for bad debts, the company estimates the amount of bad debts before those debts actually occur.

Accepted Answer

A) True 
 B)False

Question 4

An aging schedule typically categorizes the various accounts by the length of time each invoice is outstanding.

Accepted Answer

A) True 
 B)False

Question 5

Verilux Company sold merchandise to Flight Corp.on November 1, 2014, for $10,000.Verilux accepted a promissory note from Flight Corp.for $10,000.The note has a term of 5 months and a stated interest rate of 7%.Verilux's accounting period ends on December 31, 2014.What amount should Verilux recognize as interest revenue on the maturity date of the note?

Accepted Answer

A) $ -0- 
B) $ 175.00 
C) $ 291.67 
D) $ 420.00 
A) $ -0- 
B) $ 175.00 
C) $ 291.67 
D) $ 420.00

Question 6

Over the life of a note, the maker of a note recognizes ____________ on the balance sheet and _____________ on the income statement.

Accepted Answer

Note payab

Question 7

When are consolidated financial statements prepared?

Accepted Answer

A) At the option of an investee company 
B) At the option of an investor company 
C) If one company owns more than 50% of another company 
D) Only if one company owns 100% of another company 
A) At the option of an investee company 
B) At the option of an investor company 
C) If one company owns more than 50% of another company 
D) Only if one company owns 100% of another company

Question 8

Which one of the following statements is true?

Accepted Answer

A) When a company uses a subsidiary ledger, the balance in the control account, Accounts Receivable, shows only the amount the company expects to collect from the accounts receivable, net of any expected uncollectible accounts. 
B) An accounts receivable subsidiary ledger represents amounts due to vendors and suppliers. 
C) The balance in the control account, Accounts Receivable, should be equal to the sum of the balances in the subsidiary ledger for accounts receivable. 
D) A subsidiary ledger takes the place of the control account for some companies. 
A) When a company uses a subsidiary ledger, the balance in the control account, Accounts Receivable, shows only the amount the company expects to collect from the accounts receivable, net of any expected uncollectible accounts. 
B) An accounts receivable subsidiary ledger represents amounts due to vendors and suppliers. 
C) The balance in the control account, Accounts Receivable, should be equal to the sum of the balances in the subsidiary ledger for accounts receivable. 
D) A subsidiary ledger takes the place of the control account for some companies.

Question 9

On January 15, 2015, the accounts receivable balance was $7,000 and the balance in the allowance for doubtful accounts was $700.On January 16, 2015, a $200 uncollectible account was written-off.The net realizable value of accounts receivable on January 16 immediately after the write-off is:

Accepted Answer

A) $6,300 
B) $6,800 
C) $6,500 
D) $7,900 
A) $6,300 
B) $6,800 
C) $6,500 
D) $7,900

Question 10

Utah Co.sold merchandise to Big Sky Corp.on December 1, 2014, for $9,000, and accepted a promissory note for payment in the same amount.The note has a term of 90 days and a stated interest rate of 8%.Utah's accounting period ends on December 31.
What is the actual maturity date of the note?

Accepted Answer

A) December 31, 2014 
B) January 29, 2015 
C) February 28, 2015 
D) March 1, 2015 
A) December 31, 2014 
B) January 29, 2015 
C) February 28, 2015 
D) March 1, 2015

Question 11

Cushion Sports accepted a credit card account receivable in exchange for $5,000 of services provided to a customer.The credit card company charges a 5% service charge.Recording the transaction in the company's accounting records will have what effect on the accounting equation?

Accepted Answer

A) Increase assets and equity by $4,750 
B) Decrease assets and equity by $250 
C) Increase assets by $5,000 
D) Increase equity by $5,000 
A) Increase assets and equity by $4,750 
B) Decrease assets and equity by $250 
C) Increase assets by $5,000 
D) Increase equity by $5,000

Question 12

How will the payee of the promissory note record the note on its books?

Accepted Answer

A) The promissory note will be recorded as an asset. 
B) The promissory note will be recorded as a liability. 
C) The promissory note will be recorded as revenue. 
D) The promissory note will be recorded as an expense. 
A) The promissory note will be recorded as an asset. 
B) The promissory note will be recorded as a liability. 
C) The promissory note will be recorded as revenue. 
D) The promissory note will be recorded as an expense.

Question 13

On November 2, 2014, Quaint General Store concluded that a customer's $400 account receivable was uncollectible and that the account should be written off.What effect will this write­off have on Quaint's 2014 net income and balance sheet totals assuming the allowance method is used to account for bad debts?

Accepted Answer

A) Decrease in net income; decrease in total assets 
B) Increase in net income; no effect on total assets 
C) No effect on net income; decrease in total assets 
D) No effect on net income; no effect on total assets 
A) Decrease in net income; decrease in total assets 
B) Increase in net income; no effect on total assets 
C) No effect on net income; decrease in total assets 
D) No effect on net income; no effect on total assets

Question 14

Music Corporation
The data below is for Music Corporation for 2015.  
-Refer to the data for Music Corporation.
If the aging approach is used to estimate bad debts, what amount should be recorded as bad debt expense for 2015?

Accepted Answer

A) $8,000 
B) $8,100 
C) $8,700 
D) $8,900 
A) $8,000 
B) $8,100 
C) $8,700 
D) $8,900

Question 15

-Refer to the data for Benton Corporation.
If the aging approach is used to estimate bad debts, what should the balance in the Allowance for Doubtful Accounts be after the bad debts adjustment?

Accepted Answer

A) $26,900 
B) $14,900 
C) $13,200 
D) $11,500 
A) $26,900 
B) $14,900 
C) $13,200 
D) $11,500

Question 16

Allowance for Doubtful Accounts represents:

Accepted Answer

A) Cash set aside to make up for bad debt losses 
B) The amount of uncollectible accounts written off to date 
C) The difference between total sales made on credit and the amount collected from those credit sales 
D) The difference between the gross amount of accounts receivable and the net realizable value of accounts receivable 
A) Cash set aside to make up for bad debt losses 
B) The amount of uncollectible accounts written off to date 
C) The difference between total sales made on credit and the amount collected from those credit sales 
D) The difference between the gross amount of accounts receivable and the net realizable value of accounts receivable

Question 17

The equity method of accounting for an investment is used when a company purchases

Accepted Answer

A) More than 20% of the debt securities of a second company. 
B) 100% of the debt securities of a second company. 
C) 15% of the equity securities of a second company. 
D) More than 20% of the equity securities of a second company. 
A) More than 20% of the debt securities of a second company. 
B) 100% of the debt securities of a second company. 
C) 15% of the equity securities of a second company. 
D) More than 20% of the equity securities of a second company.

Question 18

The date that a promissory note is due is the .

Accepted Answer

The answer of The date that a promissory note is...

Question 19

The length of time a note is outstanding that is, the period of time between the date it is issued and the date it matures) is called the ____________________.

Accepted Answer

term
matur

Question 20

Assuming a company uses the allowance method, the entry to recognize the write-off of the specific uncollectible accounts will act to:

Accepted Answer

A) Increase total assets and total equity 
B) Increase total assets and decrease total equity 
C) Decrease total assets and total equity 
D) Not affect total assets or total equity 
A) Increase total assets and total equity 
B) Increase total assets and decrease total equity 
C) Decrease total assets and total equity 
D) Not affect total assets or total equity

The party to a promissory note that agrees to repay money on the maturity date of the note is called the

The maker of a note recognizes on its income statement.

Under the allowance method of accounting for bad debts, the company estimates the amount of bad debts before those debts actually occur.

An aging schedule typically categorizes the various accounts by the length of time each invoice is outstanding.

Over the life of a note, the maker of a note recognizes on the balance sheet and _ on the income statement.

When are consolidated financial statements prepared?

Which one of the following statements is true?

On January 15, 2015, the accounts receivable balance was $7,000 and the balance in the allowance for doubtful accounts was $700.On January 16, 2015, a $200 uncollectible account was written-off.The net realizable value of accounts receivable on January 16 immediately after the write-off is:

Utah Co.sold merchandise to Big Sky Corp.on December 1, 2014, for $9,000, and accepted a promissory note for payment in the same amount.The note has a term of 90 days and a stated interest rate of 8%.Utah's accounting period ends on December 31. What is the actual maturity date of the note?

Cushion Sports accepted a credit card account receivable in exchange for $5,000 of services provided to a customer.The credit card company charges a 5% service charge.Recording the transaction in the company's accounting records will have what effect on the accounting equation?

How will the payee of the promissory note record the note on its books?

Music Corporation The data below is for Music Corporation for 2015. -Refer to the data for Music Corporation. If the aging approach is used to estimate bad debts, what amount should be recorded as bad debt expense for 2015?

-Refer to the data for Benton Corporation. If the aging approach is used to estimate bad debts, what should the balance in the Allowance for Doubtful Accounts be after the bad debts adjustment?

Allowance for Doubtful Accounts represents:

The equity method of accounting for an investment is used when a company purchases

The date that a promissory note is due is the .

The length of time a note is outstanding that is, the period of time between the date it is issued and the date it matures) is called the ____________________.

Assuming a company uses the allowance method, the entry to recognize the write-off of the specific uncollectible accounts will act to:

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 7: Receivables and Investments

The party to a promissory note that agrees to repay money on the maturity date of the note is called the

The maker of a note recognizes on its income statement.

Under the allowance method of accounting for bad debts, the company estimates the amount of bad debts before those debts actually occur.

An aging schedule typically categorizes the various accounts by the length of time each invoice is outstanding.

Over the life of a note, the maker of a note recognizes ____________ on the balance sheet and _____________ on the income statement.

When are consolidated financial statements prepared?

Which one of the following statements is true?

On January 15, 2015, the accounts receivable balance was $7,000 and the balance in the allowance for doubtful accounts was $700.On January 16, 2015, a $200 uncollectible account was written-off.The net realizable value of accounts receivable on January 16 immediately after the write-off is:

Utah Co.sold merchandise to Big Sky Corp.on December 1, 2014, for $9,000, and accepted a promissory note for payment in the same amount.The note has a term of 90 days and a stated interest rate of 8%.Utah's accounting period ends on December 31. What is the actual maturity date of the note?

Cushion Sports accepted a credit card account receivable in exchange for $5,000 of services provided to a customer.The credit card company charges a 5% service charge.Recording the transaction in the company's accounting records will have what effect on the accounting equation?

How will the payee of the promissory note record the note on its books?

Music Corporation The data below is for Music Corporation for 2015. -Refer to the data for Music Corporation. If the aging approach is used to estimate bad debts, what amount should be recorded as bad debt expense for 2015?

-Refer to the data for Benton Corporation. If the aging approach is used to estimate bad debts, what should the balance in the Allowance for Doubtful Accounts be after the bad debts adjustment?

Allowance for Doubtful Accounts represents:

The equity method of accounting for an investment is used when a company purchases

The date that a promissory note is due is the .

The length of time a note is outstanding that is, the period of time between the date it is issued and the date it matures) is called the ____________________.

Assuming a company uses the allowance method, the entry to recognize the write-off of the specific uncollectible accounts will act to:

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Over the life of a note, the maker of a note recognizes on the balance sheet and _ on the income statement.