Question 1

Refer to the data for Slammer Sports.
If the aging approach is used to estimate bad debts, how much bad debts expense will Slammer Sports report for 2014?

Accepted Answer

$7,500 - $

Question 2

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

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 3

Match the following definitions with their appropriate terms in the next eight questions.
-Subsidiary ledger

Accepted Answer

A) A receivable arising from the sale of goods or services with a verbal promise to pay. 
B) A form used to categorize the various individual accounts receivable according to the length of time each has been outstanding. 
C) A method of estimating bad debts on the basis of either the net credit sales of the period or the accounts receivable at the end of the period. 
D) A measure of the number of times receivables are collected in a period. 
E) The general ledger account that is supported by a subsidiary ledger.
F)A contra-asset account used to reduce accounts receivable to its net realizable value.
G)The detail for a number of individual items that collectively make up a single general ledger account.
H)The recognition of bad debts expense at the point an account is written off as uncollectible. 
A) A receivable arising from the sale of goods or services with a verbal promise to pay. 
B) A form used to categorize the various individual accounts receivable according to the length of time each has been outstanding. 
C) A method of estimating bad debts on the basis of either the net credit sales of the period or the accounts receivable at the end of the period. 
D) A measure of the number of times receivables are collected in a period. 
E) The general ledger account that is supported by a subsidiary ledger.
F)A contra-asset account used to reduce accounts receivable to its net realizable value.
G)The detail for a number of individual items that collectively make up a single general ledger account.
H)The recognition of bad debts expense at the point an account is written off as uncollectible.

Question 4

Genuine Parts received a promissory note from a customer on March 1, 2015. The face amount of the note is $8,000; the terms are 90 days and 9% interest.
What is the total amount of interest that Genuine Parts will receive when the note is paid?

Accepted Answer

A)  $60 
B)  $90 
C)  $180 
D)  $720 
A)  $60 
B)  $90 
C)  $180 
D)  $720

Question 5

The following data concerns Wang Corporation for 2015:   What amount will Wang show on its year-end balance sheet for the net realizable value of its accounts receivable?

Accepted Answer

A)  $253,000 
B)  $235,000 
C)  $224,000 
D)  $217,000 
A)  $253,000 
B)  $235,000 
C)  $224,000 
D)  $217,000

Question 6

Accounts receivable are shown on the balance sheet at their net realizable amount.

Accepted Answer

A) True 
 B)False

Question 7

-Refer to the data for Music Corporation. What is the balance of Accounts Receivable at December 31, 2015?

Accepted Answer

A)  $336,000 
B)  $448,400 
C)  $458,000 
D)  $466,000 
A)  $336,000 
B)  $448,400 
C)  $458,000 
D)  $466,000

Question 8

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain why or why not.

Accepted Answer

The direct write-off method is not an ac

Question 9

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

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 10

On August 16, 2015, Blenim Corp. purchases 6,000 shares of common stock in Mountain Inc. at a market price of
$17 per share. In addition, Blenim pays brokerage fees of $2,000. On October 21, 2015, Blenim sells the Mountain stock for $12 per share.
REQUIRED:
Identify the effects on the accounting equation in connection with Blenim's investment beginning with
the purchase of the common stock on August 16, 2015, and the sale on October 21, 2015.

Accepted Answer

Aug. 16, 2015 To record purchase of 6,00

Question 11

Wagner's Bookstore acquires a 6% $12,000 certificate of deposit on September 1. The term of the CD is six months. At that time, all principal and accrued interest will be paid in cash. Indicate the effect on the financial statements at December 31.

Accepted Answer

A)  Interest Receivable increases $240, Interest Revenue increases $240 
B)  Interest Receivable increases $360, Interest Revenue increases $360 
C)  Interest Receivable increases $480, Interest Revenue increases $480 
D)  Interest Receivable increases $720, Interest Revenue increases $720 
A)  Interest Receivable increases $240, Interest Revenue increases $240 
B)  Interest Receivable increases $360, Interest Revenue increases $360 
C)  Interest Receivable increases $480, Interest Revenue increases $480 
D)  Interest Receivable increases $720, Interest Revenue increases $720

Question 12

In its first year of business, Mariman Company has net income of $290,000, exclusive of any adjustment for bad debts expense. The president of the company has asked you to calculate net income under each of two alternatives of accounting for bad debts: the direct write-off method and the allowance method. The president would like to use the method that will result in the higher net income. So far, no adjustments have been made to write off uncollectible accounts or to estimate bad debts. The relevant data are as follows:
   REQUIRED:
1. Compute net income under each of the two alternatives.
2. Does Mariman have a choice as to which method to use? If so, should it base its choice on which method will
result in the higher net income? Ignore income taxes. Explain.

Accepted Answer

1. Net income under each of the two alte

Question 13

The accounts receivable turnover ratio is computed by dividing net income by average accounts receivable.

Accepted Answer

A) True 
 B)False

Question 14

-Refer to the data for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2015?

Accepted Answer

A)  $28,000 
B)  $31,000 
C)  $34,000 
D)  $50,000 
A)  $28,000 
B)  $31,000 
C)  $34,000 
D)  $50,000

Question 15

On July 1, 2014, Falcon Company received a $20,000 promissory note for services from Jordyn Company. The annual interest rate is 5%. Principal and interest are paid in cash at the maturity date of June 30, 2013. The effect on Falcon's financial statements on July 1, 2014 is as follows

Accepted Answer

A)  Assets increase; owners' equity increases 
B)  Assets decrease and owners' equity decreases 
C)  Assets decrease 
D)  No net change in assets 
A)  Assets increase; owners' equity increases 
B)  Assets decrease and owners' equity decreases 
C)  Assets decrease 
D)  No net change in assets

Question 16

Which of the following statements is true regarding dividend income?

Accepted Answer

A)  Dividend income is accrued at year-end. 
B)  Dividend income is reported on the income statement. 
C)  Dividend income appears in the stockholders' equity section of the balance sheet. 
D)  Dividend income is recognized by companies that own debt securities. 
A)  Dividend income is accrued at year-end. 
B)  Dividend income is reported on the income statement. 
C)  Dividend income appears in the stockholders' equity section of the balance sheet. 
D)  Dividend income is recognized by companies that own debt securities.

Question 17

Baggs buys $100,000 of Vista Company bonds on January 1, 2014 at face value. The bonds pay 10% interest semiannually on June 30 and December 31. If Baggs sells the bonds at 99 on July 1, 2014, there will be a loss reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 18

Whether investments are reported as current assets or noncurrent assets depends on the company's intent.

Accepted Answer

A) True 
 B)False

Question 19

The comparative financial statements for the years ended December 31, 2014 and 2013 for Sophia Company reported the following information.
   Answer these questions concerning Sophia Company's receivables:
A What is the gross amount of accounts receivable for Sophia at December 31, 2014? Why is this amount different than the amount of receivables shown in the 2014 column of the balance sheet?
B What is the net realizable value of accounts receivable for Sophia at December 31, 2014? What does this amount represent?

Accepted Answer

A $2,700 + $80 = $2,780. It is different

Question 20

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

Refer to the data for Slammer Sports. If the aging approach is used to estimate bad debts, how much bad debts expense will Slammer Sports report for 2014?

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

Match the following definitions with their appropriate terms in the next eight questions. -Subsidiary ledger

Genuine Parts received a promissory note from a customer on March 1, 2015. The face amount of the note is $8,000; the terms are 90 days and 9% interest. What is the total amount of interest that Genuine Parts will receive when the note is paid?

The following data concerns Wang Corporation for 2015: What amount will Wang show on its year-end balance sheet for the net realizable value of its accounts receivable?

Accounts receivable are shown on the balance sheet at their net realizable amount.

-Refer to the data for Music Corporation. What is the balance of Accounts Receivable at December 31, 2015?

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain why or why not.

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

Wagner's Bookstore acquires a 6% $12,000 certificate of deposit on September 1. The term of the CD is six months. At that time, all principal and accrued interest will be paid in cash. Indicate the effect on the financial statements at December 31.

The accounts receivable turnover ratio is computed by dividing net income by average accounts receivable.

-Refer to the data for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2015?

On July 1, 2014, Falcon Company received a $20,000 promissory note for services from Jordyn Company. The annual interest rate is 5%. Principal and interest are paid in cash at the maturity date of June 30, 2013. The effect on Falcon's financial statements on July 1, 2014 is as follows

Which of the following statements is true regarding dividend income?

Baggs buys $100,000 of Vista Company bonds on January 1, 2014 at face value. The bonds pay 10% interest semiannually on June 30 and December 31. If Baggs sells the bonds at 99 on July 1, 2014, there will be a loss reported on the income statement.

Whether investments are reported as current assets or noncurrent assets depends on the company's intent.

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?

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

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Exam 7: Receivables and Investments

Refer to the data for Slammer Sports. If the aging approach is used to estimate bad debts, how much bad debts expense will Slammer Sports report for 2014?

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

Match the following definitions with their appropriate terms in the next eight questions. -Subsidiary ledger

Genuine Parts received a promissory note from a customer on March 1, 2015. The face amount of the note is $8,000; the terms are 90 days and 9% interest. What is the total amount of interest that Genuine Parts will receive when the note is paid?

The following data concerns Wang Corporation for 2015: What amount will Wang show on its year-end balance sheet for the net realizable value of its accounts receivable?

Accounts receivable are shown on the balance sheet at their net realizable amount.

-Refer to the data for Music Corporation. What is the balance of Accounts Receivable at December 31, 2015?

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain why or why not.

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

Wagner's Bookstore acquires a 6% $12,000 certificate of deposit on September 1. The term of the CD is six months. At that time, all principal and accrued interest will be paid in cash. Indicate the effect on the financial statements at December 31.

The accounts receivable turnover ratio is computed by dividing net income by average accounts receivable.

-Refer to the data for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2015?

On July 1, 2014, Falcon Company received a $20,000 promissory note for services from Jordyn Company. The annual interest rate is 5%. Principal and interest are paid in cash at the maturity date of June 30, 2013. The effect on Falcon's financial statements on July 1, 2014 is as follows

Which of the following statements is true regarding dividend income?

Baggs buys $100,000 of Vista Company bonds on January 1, 2014 at face value. The bonds pay 10% interest semiannually on June 30 and December 31. If Baggs sells the bonds at 99 on July 1, 2014, there will be a loss reported on the income statement.

Whether investments are reported as current assets or noncurrent assets depends on the company's intent.

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?

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