Exam 7: Receivables and Investments

On November 2, 2016, 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 2016 net income and balance sheet totals assuming the allowance method is used to account for bad debts?

Match the following definitions with their appropriate terms . -Subsidiary ledger

Utah Co.sold merchandise to Big Sky Corp.on December 1, 2016, 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 amount should Utah recognize as interest revenue on the maturity date of the note?

Which one of the approaches for the allowance method of accounting for bad debts emphasizes the net realizable value of accounts receivable on the balance sheet?

The data presented below for Lynx Corp.is for the year ended December 31, 2016: Sales (100\% on credit) \ 1,000,000 Sales returns 30,000 Accounts Receivable (December 31,2016) 170,000 Allowance for Doubtful Accounts [Cr. B alance] (Before adjustment at December 31, 2016) 1,300 Estimated amount of uncollectible accounts based on aging analysis 14,000 -See the data for Lynx Corp. If Lynx Corp.uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2016?

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

The data below is for Music Corporation for 2016. Accounts receivable-January 1, 2016 \ 236,000 Credit sales during 2016 820,000 Collections from credit customers during 2016 590,000 Customer accounts written off as uncoll ectible during 2016 8,000 All owance for doubtful accounts-January 1, 2016 8,700 Estimated uncollectible accounts based on an aging analysis 9,600 -Refer to the data for Music Corporation. What is the balance of Accounts Receivable at December 31, 2016?

For each item listed below, identify how it will be reported on the Statement of Cash Flows under the indirect method. -Decrease in accounts receivable

The following data concerns Wang Corporation for 2016: Credit sales during the year \ 1,600,000 Accounts Receivable-December 31,2016 235,000 Allowance for Doubtful Accounts-December 31,2016 18,000 Bad debt expense for the year 11,000 ? What amount will Wang show on its year-end balance sheet for the net realizable value of its accounts receivable?

Comfort Shoes received a promissory note from a customer on April 1, 2016.The face amount of the note is $2,000; the terms are 12 months and 8% annual interest.At the maturity date, the customer pays for the note and interest.Comfort Shoes made the proper adjustment at the end of December for interest.The effect of recognizing the transaction on the maturity date is

Lasiter Corp.reported net credit sales of $2,000,000 and cost of goods sold of $1,400,000 for 2016.On January 1, 2016, accounts receivable was $250,000.Amounts owed by customers increased by $20,000 during 2016.Rounding to two decimal places, what is Lasiter's accounts receivable turnover rate for 2016?

The data presented below is for Mellon Corporation for the year ended December 31, 2016: Sales (100\% on credit) \ 1,500,000 Sales returns 60,000 Accounts Receivable (December 31, 2016) 250,000 Allowance for Doubtful Accounts [Credit B al ance] (Before adjustment at December 31,2016 3,000 Estimated amount of uncollectible accounts based on an aging analysis 31,000 -Refer to the information for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?

A note discounted with recourse means that if the original customer fails to pay the bank the total amount due on the maturity date of the note, the company that transferred the note to the bank is liable for the full amount.

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

The comparative balance sheets for Flagler Co.for 2017 and 2016 indicate that accounts receivable decreased during 2017.Flagler uses the indirect method of preparing the operating activities section of its statement of cash flows.How will the decrease in accounts receivable be reported on the statement of cash flows?

During 2016, the accounts receivable turnover rate for Cordner Company increased from 10 to 14 times per year.Which one of the following statements is the most likely explanation for the change?

An increase in accounts receivable is reported on the statement of cash flows under the indirect method as an addition.

A contra-asset account used to reduce accounts receivable to its net realizable value is known as a(n) ____________________.

Match the following definitions with their appropriate terms . -Equity securities

Match the following definitions with their appropriate terms . -Accounts Receivable turnover