Exam 7: Sales and Receivables

A retailer has 4% credit/debit card service fees deducted from the proceeds from each sale. The retailer has $1,200 in sales for the day. The journal entry to record these sales would be:

What is the maturity date of a 4-month promissory note dated on July 17?

A 135-day note issued on May 17 will mature on:

Another name for the quick ratio is the acid-test ratio.

Notes receivable generally include a charge for interest.

Under the direct write-off method, to record the receipt of cash after an account has previously been written off, you would first:

Andy Corporation lent $25,000 to Casey Corporation for 75 days at 7% interest on November 22, 2010. How much interest will have accrued to Andy Corporation on December 31, 2010, assuming a 360-day year?

The maturity value is the sum of the principal plus the interest due at maturity.

Riccardo Company has cash of $103,000; net accounts receivable of $69,000; short-term investments of $25,000; and prepaid expenses of $40,000. It also has $90,000 in current liabilities and $80,000 in long-term liabilities. What is the quick ratio for Riccardo Company? If last year's quick ratio was 2.3, is there an improvement or deterioration in the quick ratio? Is the current year's quick ratio good?

Which method for accounting for uncollectible accounts is not acceptable for financial reporting purposes?

Alexis Corporation had the following transactions: Oct 1 Exchanged a customer Jim's account receivable for a 4-month, 8% note for $3,500. Dec 31 Recorded accrued interest on Jim's note. Record the journal entries required:

On April 9, Joe paid $3,568 to Mike Company to fulfill his promissory note agreement. Of the $3,568, $400 is interest. The journal entry Mike Company will record is __________.

Accounts receivable are more formal and usually longer in terms than notes receivable.

Isaiah Company converted a $4,000 account receivable from Mark to a 75-day, 8% note receivable. The maturity value (assume a 360-day year) that will be due from Mark in 75 days (round to nearest dollar) is:

From the retailer's perspective, debit cards are nearly identical to credit cards and have the same benefits and drawbacks.

When counting the days of a note, remember to count the day the note was issued.

What is considered to be a safe quick ratio?

When companies extend credit to customers,:

Taylor Company has given you the following information from its aging of accounts receivable. Using this information, determine the ending balance of the allowance for doubtful accounts. Current amount in the allowance for doubtful accounts is a $958 credit.

What is the expense called that reflects the estimate of uncollectible accounts receivable?