Question 1

Twin Cities Corp. had sales during the year of $15,000,000 and an average accounts receivable of $5,000,000. Its accounts receivable turnover ratio is 0.33 times.

Accepted Answer

A) True 
 B)False

Question 2

Hawthorne Industries' comparative balance sheets included accounts receivable of $221,400 at December 31, 2013, and $205,900 at December 31, 2014. Sales reported on Hawthorne's 2014 income statement amounted to
$2,550,000. What is the amount of cash collections that Hawthorne will report in the Operating Activities category of its 2014 statement of cash flows assuming that the direct method is used? Show your calculations.

Accepted Answer

Cash collections to be reporte

Question 3

Discounting a note receivable

Accepted Answer

A)  Requires using an account called discount on notes receivable 
B)  Is the process of lending money 
C)  Slows the collection process 
D)  Is the process of selling a promissory note 
A)  Requires using an account called discount on notes receivable 
B)  Is the process of lending money 
C)  Slows the collection process 
D)  Is the process of selling a promissory note

Question 4

Match the following definitions with their appropriate terms in the next 14 questions.
-Payee

Accepted Answer

A) A liability resulting from the signing of a promissory note. 
B) A measure of how long it takes to collect receivables. 
C) A written promise to repay a definite sum of money on demand or at a fixed or determinable date in the future. 
D) 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. 
E) The party that will receive the money from a promissory note at some future date.
F)The process of selling a promissory note.
G)The date the promissory note is due.
H)The amount of cash the maker is to pay the payee on the maturity date of the note.
I)The difference between the principal amount of the note and its maturity value.
J)An asset resulting from the acceptance of a promissory note from another company.
K)Securities issued by corporations and governmental bodies as a form of borrowing.
L)Securities issued by corporations as a form of ownership in the business.
M)The party that agrees to repay the money for a promissory note at some future date.
N)The amount of cash received, or the fair value of the products or services received, by the maker when a promissory note is issued. 
A) A liability resulting from the signing of a promissory note. 
B) A measure of how long it takes to collect receivables. 
C) A written promise to repay a definite sum of money on demand or at a fixed or determinable date in the future. 
D) 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. 
E) The party that will receive the money from a promissory note at some future date.
F)The process of selling a promissory note.
G)The date the promissory note is due.
H)The amount of cash the maker is to pay the payee on the maturity date of the note.
I)The difference between the principal amount of the note and its maturity value.
J)An asset resulting from the acceptance of a promissory note from another company.
K)Securities issued by corporations and governmental bodies as a form of borrowing.
L)Securities issued by corporations as a form of ownership in the business.
M)The party that agrees to repay the money for a promissory note at some future date.
N)The amount of cash received, or the fair value of the products or services received, by the maker when a promissory note is issued.

Question 5

The process of assigning a note due in the future to a bank before its maturity date is called
____________________.

Accepted Answer

The answer of The process of assigning a note due...

Question 6

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 write-off 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 7

-Refer to the data for Benton 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)  $ 2,900 
B)  $11,500 
C)  $23,500 
D)  $26,900 
A)  $ 2,900 
B)  $11,500 
C)  $23,500 
D)  $26,900

Question 8

What is the impact on the cash flow statement from a decrease in accounts receivable, assuming the indirect method is used?

Accepted Answer

A)  A decrease in the cash flow from operating activities 
B)  An increase in the cash flow from operating activities 
C)  An increase in the cash flow from financing activities 
D)  None. A decrease in accounts receivable has an impact only if the direct method is used 
A)  A decrease in the cash flow from operating activities 
B)  An increase in the cash flow from operating activities 
C)  An increase in the cash flow from financing activities 
D)  None. A decrease in accounts receivable has an impact only if the direct method is used

Question 9

Textbooks.com accepts VISA for payments of purchases made by students. The credit card drafts are deposited directly in a bank account. VISA charges a 2% collection fee. Credit card drafts totaling $12,000 are deposited during September. The effect on the accounting equation to record the sales and deposits will include

Accepted Answer

A)  An increase in Cash for $12,000 
B)  An increase to Sales for $11,760 
C)  An increase to Accounts Receivable for $11,760 
D)  An increase in Collection Fee Expense for $240 
A)  An increase in Cash for $12,000 
B)  An increase to Sales for $11,760 
C)  An increase to Accounts Receivable for $11,760 
D)  An increase in Collection Fee Expense for $240

Question 10

Refer to Beatrice Equipment.
Assume that Beatrice Equipment estimates bad debts on an aging analysis, and the aging schedule indicates that
$28,000 of the December 31, 2014 accounts receivable will be uncollectible.
A What amount will Beatrice Equipment recognize as bad debts expense for 2014?
B How much is the net realizable value of the receivables to be reported on Beatrice
Equipment's balance sheet at December 31, 2014?

Accepted Answer

A $28,000 - $25,600

Question 11

Select the term from the list below that matches each of the following six descriptions.
-The difference between the principal amount of the note and its maturity value

Accepted Answer

A) Interest 
B) Maturity value 
C) Principal 
D) Payee 
E) Discounting
F)Term
G)Recourse
H)Implicit
I)Maker 
A) Interest 
B) Maturity value 
C) Principal 
D) Payee 
E) Discounting
F)Term
G)Recourse
H)Implicit
I)Maker

Twin Cities Corp. had sales during the year of $15,000,000 and an average accounts receivable of $5,000,000. Its accounts receivable turnover ratio is 0.33 times.

Discounting a note receivable

Match the following definitions with their appropriate terms in the next 14 questions. -Payee

The process of assigning a note due in the future to a bank before its maturity date is called ____________________.

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

What is the impact on the cash flow statement from a decrease in accounts receivable, assuming the indirect method is used?

Select the term from the list below that matches each of the following six descriptions. -The difference between the principal amount of the note and its maturity value

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

Twin Cities Corp. had sales during the year of $15,000,000 and an average accounts receivable of $5,000,000. Its accounts receivable turnover ratio is 0.33 times.

Discounting a note receivable

Match the following definitions with their appropriate terms in the next 14 questions. -Payee

The process of assigning a note due in the future to a bank before its maturity date is called ____________________.

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

What is the impact on the cash flow statement from a decrease in accounts receivable, assuming the indirect method is used?

Select the term from the list below that matches each of the following six descriptions. -The difference between the principal amount of the note and its maturity value

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