Question 1

A(n) ____________________ categorizes the various accounts receivable amounts by the length of time outstanding.

Accepted Answer

The answer of A(n) ____________________ categorizes the various accounts receivable...

Question 2

If a company uses the allowance method to account for bad debts, when will the company's owners' equity decrease?

Accepted Answer

A)  At the date a customer's account is written off 
B)  At the end of the accounting period when an adjusting entry for bad debts is recorded 
C)  At the date a customer's account is determined to be uncollectible 
D)  When the accounts receivable amount becomes past due 
A)  At the date a customer's account is written off 
B)  At the end of the accounting period when an adjusting entry for bad debts is recorded 
C)  At the date a customer's account is determined to be uncollectible 
D)  When the accounts receivable amount becomes past due

Question 3

The data below is for Benton Corporation for 2016. $$\begin{array} { l r } 
\text { Accounts Receivable-January 1, 2016 } & \$ 334,000 \
\text { Credit sales during 2016 } & 850,000 \
\text { Collections from credit customers during 2016 } & 725,000 \
\text { Customer accounts written off as uncollectible during 2016 } & 12,000 \
\text { Allowance for Doubtful Accounts [Credit B alance] } & \
\text { (After write-off of uncollectible accounts) } & 1,700 \
\text { Estimated uncollectible accounts based on an aging analysis } & 13,200
\end{array}$$ ​
​
-Refer to the data for Benton Corporation. ?
What is the balance of Accounts Receivable at December 31, 2016?

Accepted Answer

A)  $209,000 
B)  $225,000 
C)  $447,000 
D)  $459,000 
A)  $209,000 
B)  $225,000 
C)  $447,000 
D)  $459,000

Question 4

Match the following definitions with their appropriate terms .
-Maker

Accepted Answer

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

Question 5

When a note is discounted at a bank, it is normally done with recourse.

Accepted Answer

A) True 
 B)False

Question 6

The party that agrees to repay is the ____________________ of the note.

Accepted Answer

The answer of The party that agrees to repay is...

Question 7

The mechanism that keeps track of the balances owed by individual customers is called a(n) _________________________.

Accepted Answer

The answer of The mechanism that keeps track of the...

Question 8

On July 1, 2016, Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30, 2017. ​
If Falcon's fiscal year ends September 30, 2016, an adjusting entry is needed to:

Accepted Answer

A)  Increase interest revenue by $1,000 
B)  Increase notes receivable by $250 
C)  Increase interest receivable by $250 
D)  Increase notes receivable by $1,000 
A)  Increase interest revenue by $1,000 
B)  Increase notes receivable by $250 
C)  Increase interest receivable by $250 
D)  Increase notes receivable by $1,000

Question 9

The data below is for Music Corporation for 2016. $$\begin{array} { l r } 
\text { Accounts receivable-January 1, 2016 } & \$ 236,000 \
\text { Credit sales during 2016 } & 820,000 \
\text { Collections from credit customers during 2016 } & 590,000 \
\text { Customer accounts written off as uncoll ectible during 2016 } & 8,000 \
\text { All owance for doubtful accounts-January 1, 2016 } & 8,700 \
\text { Estimated uncollectible accounts based on an aging analysis } & 9,600
\end{array}$$
-Refer to the data for Music Corporation. If the aging approach is used to estimate bad debts, what is the balance in the Allowance for Doubtful Accounts after the bad debt expense adjustment?

Accepted Answer

A)  $8,000 
B)  $8,100 
C)  $8,900 
D)  $9,600 
A)  $8,000 
B)  $8,100 
C)  $8,900 
D)  $9,600

Question 10

If a company uses the allowance method of accounting for bad debts, which one of the following statements is true?

Accepted Answer

A)  It will report accounts receivable in the balance sheet at their net realizable value 
B)  It will record bad debts only when an account is determined to be uncollectible. 
C)  It will reduce the accounts receivable at the end of the accounting period for estimated uncollectible accounts. 
D)  It violates the matching principle. 
A)  It will report accounts receivable in the balance sheet at their net realizable value 
B)  It will record bad debts only when an account is determined to be uncollectible. 
C)  It will reduce the accounts receivable at the end of the accounting period for estimated uncollectible accounts. 
D)  It violates the matching principle.

Question 11

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 12

Clarion Corp.invested cash in a 6-month certificate of deposit (CD) on November 1, 2016.If Clarion Corp.has an accounting period that ends on December 31, 2016, when should Clarion recognize interest revenue from the CD?

Accepted Answer

A)  On December 31, 2016 only 
B)  On May 1, 2017 only 
C)  Both December 31, 2016 and May 31, 2017 
D)  On the date when its income tax return is filed 
A)  On December 31, 2016 only 
B)  On May 1, 2017 only 
C)  Both December 31, 2016 and May 31, 2017 
D)  On the date when its income tax return is filed

Question 13

Accountants use the ____________________ to overcome the deficiencies of the direct write-off method for bad debts.

Accepted Answer

The answer of Accountants use the ____________________ to overcome the...

Question 14

What is the distinguishing characteristic between accounts receivable and notes receivable?

Accepted Answer

A)  Accounts receivable are usually current assets while notes receivable are usually long-term assets. 
B)  Accounts receivable require payment of interest if not paid within the usual credit terms. 
C)  Notes receivable result from credit sale transactions for merchandising companies, while accounts receivable result from credit sale transactions for service companies. 
D)  Notes receivable result from a written promise to pay within a specified amount of time. 
A)  Accounts receivable are usually current assets while notes receivable are usually long-term assets. 
B)  Accounts receivable require payment of interest if not paid within the usual credit terms. 
C)  Notes receivable result from credit sale transactions for merchandising companies, while accounts receivable result from credit sale transactions for service companies. 
D)  Notes receivable result from a written promise to pay within a specified amount of time.

Question 15

A decrease in accounts receivable represents an increase in a company's cash flow from operating activities.

Accepted Answer

A) True 
 B)False

Question 16

On January 1, 2016, the Accounts Receivable and the Allowance for Uncollectible Accounts for Darius Company carried balances of $20,000 and $550 respectively.During the year, the company reported $70,000 of credit sales.There were $400 of receivables written off as uncollectible in 2016.Cash collections of receivables amounted to $74,700.The company estimates that it will be unable to collect 5% of the year-end accounts receivable balance. ​
The amount of bad debts expense recognized in the 2016 income statement will be:

Accepted Answer

A)  $545 
B)  $595 
C)  $745 
D)  $795 
A)  $545 
B)  $595 
C)  $745 
D)  $795

Question 17

A company invests excess cash in a certificate of deposit.At the end of an accounting period before the CD matures, the company will recognize interest expense.

Accepted Answer

A) True 
 B)False

Question 18

Promissory notes are non-negotiable.

Accepted Answer

A) True 
 B)False

Question 19

When an investor is able to secure significant influence over an investee, the ____________________ method of accounting is used.

Accepted Answer

The answer of When an investor is able to secure...

Question 20

The data below is for Music Corporation for 2016. $$\begin{array} { l r } 
\text { Accounts receivable-January 1, 2016 } & \$ 236,000 \
\text { Credit sales during 2016 } & 820,000 \
\text { Collections from credit customers during 2016 } & 590,000 \
\text { Customer accounts written off as uncoll ectible during 2016 } & 8,000 \
\text { All owance for doubtful accounts-January 1, 2016 } & 8,700 \
\text { Estimated uncollectible accounts based on an aging analysis } & 9,600
\end{array}$$
-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 2016?

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

A(n) ____________________ categorizes the various accounts receivable amounts by the length of time outstanding.

If a company uses the allowance method to account for bad debts, when will the company's owners' equity decrease?

Match the following definitions with their appropriate terms . -Maker

When a note is discounted at a bank, it is normally done with recourse.

The party that agrees to repay is the ____________________ of the note.

The mechanism that keeps track of the balances owed by individual customers is called a(n) _________________________.

On July 1, 2016, Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30, 2017. If Falcon's fiscal year ends September 30, 2016, an adjusting entry is needed to:

If a company uses the allowance method of accounting for bad debts, which one of the following statements is true?

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

Clarion Corp.invested cash in a 6-month certificate of deposit (CD) on November 1, 2016.If Clarion Corp.has an accounting period that ends on December 31, 2016, when should Clarion recognize interest revenue from the CD?

Accountants use the ____________________ to overcome the deficiencies of the direct write-off method for bad debts.

What is the distinguishing characteristic between accounts receivable and notes receivable?

A decrease in accounts receivable represents an increase in a company's cash flow from operating activities.

A company invests excess cash in a certificate of deposit.At the end of an accounting period before the CD matures, the company will recognize interest expense.

Promissory notes are non-negotiable.

When an investor is able to secure significant influence over an investee, the ____________________ method of accounting is used.

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 True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters

Exam 7: Receivables and Investments

A(n) ____________________ categorizes the various accounts receivable amounts by the length of time outstanding.

If a company uses the allowance method to account for bad debts, when will the company's owners' equity decrease?

Match the following definitions with their appropriate terms . -Maker

When a note is discounted at a bank, it is normally done with recourse.

The party that agrees to repay is the ____________________ of the note.

The mechanism that keeps track of the balances owed by individual customers is called a(n) _________________________.

On July 1, 2016, Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30, 2017. ​ If Falcon's fiscal year ends September 30, 2016, an adjusting entry is needed to:

If a company uses the allowance method of accounting for bad debts, which one of the following statements is true?

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

Clarion Corp.invested cash in a 6-month certificate of deposit (CD) on November 1, 2016.If Clarion Corp.has an accounting period that ends on December 31, 2016, when should Clarion recognize interest revenue from the CD?

Accountants use the ____________________ to overcome the deficiencies of the direct write-off method for bad debts.

What is the distinguishing characteristic between accounts receivable and notes receivable?

A decrease in accounts receivable represents an increase in a company's cash flow from operating activities.

A company invests excess cash in a certificate of deposit.At the end of an accounting period before the CD matures, the company will recognize interest expense.

Promissory notes are non-negotiable.

When an investor is able to secure significant influence over an investee, the ____________________ method of accounting is used.

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 True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters

On July 1, 2016, Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30, 2017. If Falcon's fiscal year ends September 30, 2016, an adjusting entry is needed to: