Question 1

The most common type of receivables is accounts receivable.

Accepted Answer

A) True 
 B)False

Question 2

Match the following definitions with their appropriate terms .
-Discounting

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 3

On February 1, 2016, Vermont Corp.pays $50,000 for shares of Stream, Inc.common stock and another $1,000 in commissions. ​
Assume that Vermont sells the Stream stock on May 20, 2016, for $53,000.In this case, Vermont recognizes

Accepted Answer

A)  An increase in assets and stockholders' equity for $2,000. 
B)  An decrease in assets and an increase in stockholders' equity for $2,000. 
C)  An increase and decrease in assets by the same amount. 
D)  An increase in assets and stockholders' equity for $3,000. 
A)  An increase in assets and stockholders' equity for $2,000. 
B)  An decrease in assets and an increase in stockholders' equity for $2,000. 
C)  An increase and decrease in assets by the same amount. 
D)  An increase in assets and stockholders' equity for $3,000.

Question 4

The data presented below for Lynx Corp.is for the year ended December 31, 2016: $$\begin{array} { l r } 
\text { Sales (100\% on credit) } & \$ 1,000,000 \
\text { Sales returns } & 30,000 \
\text { Accounts Receivable (December 31,2016) } & 170,000 \
\text { Allowance for Doubtful Accounts [Cr. B alance] } & \
\quad \text { (Before adjustment at December 31, 2016) } & 1,300 \
\text { Estimated amount of uncollectible accounts based on aging analysis } & 14,000
\end{array}$$
-See the data for Lynx Corp. If Lynx Corp.estimates its bad debts at 1% of net credit sales, what amount will be reported as bad debt expense for 2016?

Accepted Answer

A)  $9,560 
B)  $9,700 
C)  $1,700 
D)  None of these choices 
A)  $9,560 
B)  $9,700 
C)  $1,700 
D)  None of these choices

Question 5

The company that makes or gives a promissory note to another company has a liability, called a(n) ____________________.

Accepted Answer

The answer of The company that makes or gives a...

Question 6

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 7

Router Inc.lends $70,000 on a 120-day, 9% promissory note.The total interest that Router will receive at maturity is

Accepted Answer

A)  $6,300 
B)  $2,100 
C)  $525 
D)  $1,890 
A)  $6,300 
B)  $2,100 
C)  $525 
D)  $1,890

Question 8

If a company uses the direct write-off method of accounting for bad debts,

Accepted Answer

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

Question 9

Purchases and sales of cash equivalents are reported as investing activities on a statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 10

When using the indirect cash flow method, a decrease in accounts receivable or notes receivable must be _________ to net income to arrive at the increase or decrease in cash flows.

Accepted Answer

The answer of When using the indirect cash flow method,...

Question 11

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 12

The date that a promissory note is due is the ____________________.

Accepted Answer

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

Question 13

Cash flows from purchases, sales, and maturities of investments are usually classified as _________________ activities.

Accepted Answer

The answer of Cash flows from purchases, sales, and maturities...

Question 14

Which one of the approaches for the allowance method of accounting for bad debts emphasizes matching bad debts expense with revenue on the income statement?

Accepted Answer

A)  The percentage of accounts receivable approach 
B)  The percentage of net credit sales approach 
C)  The direct write-off method 
D)  The uncollectible approach 
A)  The percentage of accounts receivable approach 
B)  The percentage of net credit sales approach 
C)  The direct write-off method 
D)  The uncollectible approach

Question 15

The difference between the principal amount of a note and its maturity value is called ____________________.

Accepted Answer

The answer of The difference between the principal amount of...

Question 16

A high accounts receivable turnover ratio could mean that the company's credit policies may be too stringent.

Accepted Answer

A) True 
 B)False

Question 17

Match the following definitions with their appropriate terms .
-Term

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 18

The party that receives the payment due from a note is called the ____________________.

Accepted Answer

The answer of The party that receives the payment due...

Question 19

Verilux Company sold merchandise to Flight Corp.on November 1, 2016, 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, 2016.What amount should Verilux recognize as interest revenue on December 31, 2016?

Accepted Answer

A)  $ -0- 
B)  $ 116.67 
C)  $ 291.67 
D)  $ 280.00 
A)  $ -0- 
B)  $ 116.67 
C)  $ 291.67 
D)  $ 280.00

Question 20

Match the following definitions with their appropriate terms .
-Number of days' sales in receivables

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.

The most common type of receivables is accounts receivable.

Match the following definitions with their appropriate terms . -Discounting

On February 1, 2016, Vermont Corp.pays $50,000 for shares of Stream, Inc.common stock and another $1,000 in commissions. Assume that Vermont sells the Stream stock on May 20, 2016, for $53,000.In this case, Vermont recognizes

The company that makes or gives a promissory note to another company has a liability, called a(n) ____________________.

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

Router Inc.lends $70,000 on a 120-day, 9% promissory note.The total interest that Router will receive at maturity is

If a company uses the direct write-off method of accounting for bad debts,

Purchases and sales of cash equivalents are reported as investing activities on a statement of cash flows.

When using the indirect cash flow method, a decrease in accounts receivable or notes receivable must be _________ to net income to arrive at the increase or decrease in cash flows.

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

The date that a promissory note is due is the ____________________.

Cash flows from purchases, sales, and maturities of investments are usually classified as _________________ activities.

Which one of the approaches for the allowance method of accounting for bad debts emphasizes matching bad debts expense with revenue on the income statement?

The difference between the principal amount of a note and its maturity value is called ____________________.

A high accounts receivable turnover ratio could mean that the company's credit policies may be too stringent.

Match the following definitions with their appropriate terms . -Term

The party that receives the payment due from a note is called the ____________________.

Match the following definitions with their appropriate terms . -Number of days' sales in receivables

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

The most common type of receivables is accounts receivable.

Match the following definitions with their appropriate terms . -Discounting

On February 1, 2016, Vermont Corp.pays $50,000 for shares of Stream, Inc.common stock and another $1,000 in commissions. ​ Assume that Vermont sells the Stream stock on May 20, 2016, for $53,000.In this case, Vermont recognizes

The company that makes or gives a promissory note to another company has a liability, called a(n) ____________________.

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

Router Inc.lends $70,000 on a 120-day, 9% promissory note.The total interest that Router will receive at maturity is

If a company uses the direct write-off method of accounting for bad debts,

Purchases and sales of cash equivalents are reported as investing activities on a statement of cash flows.

When using the indirect cash flow method, a decrease in accounts receivable or notes receivable must be _________ to net income to arrive at the increase or decrease in cash flows.

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

The date that a promissory note is due is the ____________________.

Cash flows from purchases, sales, and maturities of investments are usually classified as _________________ activities.

Which one of the approaches for the allowance method of accounting for bad debts emphasizes matching bad debts expense with revenue on the income statement?

The difference between the principal amount of a note and its maturity value is called ____________________.

A high accounts receivable turnover ratio could mean that the company's credit policies may be too stringent.

Match the following definitions with their appropriate terms . -Term

The party that receives the payment due from a note is called the ____________________.

Match the following definitions with their appropriate terms . -Number of days' sales in receivables

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 February 1, 2016, Vermont Corp.pays $50,000 for shares of Stream, Inc.common stock and another $1,000 in commissions. Assume that Vermont sells the Stream stock on May 20, 2016, for $53,000.In this case, Vermont recognizes