Question 1

If a company has n/120-credit terms, you would expect its Accounts Receivable turnover to be:

Accepted Answer

A) 3 
B) 6 
C) 10 
D) 12 
A) 3 
B) 6 
C) 10 
D) 12

Question 2

A customer's written promise to pay an amount of money to a business with interest is a(n)________ of the business.

Accepted Answer

A) account receivable 
B) account payable 
C) note receivable 
D) note payable 
A) account receivable 
B) account payable 
C) note receivable 
D) note payable

Question 3

Pirates Party Supply deposited a check for $695, but it was recorded on their books as a check for $536. This error of $159 would be:

Accepted Answer

A) added to the bank balance. 
B) added to Pirate's book balance. 
C) subtracted from the bank balance. 
D) subtracted from Pirate's book balance. 
A) added to the bank balance. 
B) added to Pirate's book balance. 
C) subtracted from the bank balance. 
D) subtracted from Pirate's book balance.

Question 4

If a company has n/90-credit terms, you would expect its Accounts Receivable turnover to be:

Accepted Answer

A) 12. 
B)  4. 
C)  2. 
D)  1. 
A) 12. 
B)  4. 
C)  2. 
D)  1.

Question 5

A cost incurred by the seller when credit customers do not pay is called:

Accepted Answer

A) a write down. 
B) bad debt expense. 
C) accounts deceivable. 
D) an unallowable account. 
A) a write down. 
B) bad debt expense. 
C) accounts deceivable. 
D) an unallowable account.

Question 6

Principal is the amount loaned out by the ________ and borrowed by the ________.

Accepted Answer

A) payee of a note, creditor 
B) maker of a note, payee of a note 
C) debtor, maker of a note 
D) payee of a note, maker of a note 
A) payee of a note, creditor 
B) maker of a note, payee of a note 
C) debtor, maker of a note 
D) payee of a note, maker of a note

Question 7

On March 15, Diego paid $7,750 to Island, Inc. to fulfill his promissory note agreement. Of the $7,750, $750 is interest. The journal entry Island, Inc. will record is to:

Accepted Answer

A) debit Cash, $7,750; credit Note Receivable/Diego, $7,750. 
B) debit Cash, $7,750; credit Note Receivable/Diego, $7,000; credit Interest Revenue, $750. 
C) debit Note Receivable/Diego, $7,750; credit Cash $7,000; credit Interest Revenue $750. 
D) debit Note Receivable/Diego, $7,750; credit Cash $7,750. 
A) debit Cash, $7,750; credit Note Receivable/Diego, $7,750. 
B) debit Cash, $7,750; credit Note Receivable/Diego, $7,000; credit Interest Revenue, $750. 
C) debit Note Receivable/Diego, $7,750; credit Cash $7,000; credit Interest Revenue $750. 
D) debit Note Receivable/Diego, $7,750; credit Cash $7,750.

Question 8

Separation of duties is essential for internal control over cash receipts and cash payments.

Accepted Answer

A) True 
 B)False

Question 9

Robbins Company has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts.  
The current balance in Allowance for Doubtful Accounts is a $938 credit.

Accepted Answer

A) $3,231 
B) $2,293 
C) $1,355 
D) $938 
A) $3,231 
B) $2,293 
C) $1,355 
D) $938

Question 10

Capital Masonry has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts.  
The current balance in Allowance for Doubtful Accounts is a $145 debit.

Accepted Answer

A) $1,337 
B) $1,482 
C) $145 
D) $1,192 
A) $1,337 
B) $1,482 
C) $145 
D) $1,192

Question 11

Under the allowance method, to record the receipt of cash after an account has previously being written off, you would first:

Accepted Answer

A) debit Cash and credit the customer's account. 
B) reinstate the customer's account. 
C) debit Allowance for Doubtful Accounts. 
D) debit Bad Debt Expense. 
A) debit Cash and credit the customer's account. 
B) reinstate the customer's account. 
C) debit Allowance for Doubtful Accounts. 
D) debit Bad Debt Expense.

Question 12

The account receivable turnover is computed by taking the average net Accounts Receivable and dividing it by the net credit sales.

Accepted Answer

A) True 
 B)False

Question 13

The amount loaned out by the payee is called the maturity value.

Accepted Answer

A) True 
 B)False

Question 14

Leo Company has a petty cash fund of $300. At the end of the month, $42 remains in the fund along with $260. in various receipts. The journal entry to replenish the fund would be:

Accepted Answer

A) debit Petty Cash for $258 and credit Cash for $258. 
B) debit various expenses, $256; debit Cash Short for $2 and credit Cash for $258. 
C) debit various expenses, $260; credit Cash Over for $2 and credit Cash for $258. 
D) debit various expenses, $260 and credit Cash for $260. 
A) debit Petty Cash for $258 and credit Cash for $258. 
B) debit various expenses, $256; debit Cash Short for $2 and credit Cash for $258. 
C) debit various expenses, $260; credit Cash Over for $2 and credit Cash for $258. 
D) debit various expenses, $260 and credit Cash for $260.

Question 15

As part of the procedure to properly control cash payments received in the mail, after the mailroom employee opens the cash receipts, the checks then go to the:

Accepted Answer

A) bank. 
B) Controller. 
C) Treasurer. 
D) accounting department. 
A) bank. 
B) Controller. 
C) Treasurer. 
D) accounting department.

Question 16

Using a 365-day year, the maturity value of a 180-day note for $3,000 at 9% annual interest is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Accepted Answer

A) $2,866.85. 
B) $133.15. 
C) $3,133.15. 
D) $270.00. 
A) $2,866.85. 
B) $133.15. 
C) $3,133.15. 
D) $270.00.

Question 17

Joe is a customer of Bobble, Inc. which uses the allowance method to account for uncollectible accounts. The company wrote off his account of $2,000 on March 15. On June 11, he sent in a payment of $800. What will Bobble, Inc. record first to reinstate his account?

Accepted Answer

A) Debit Cash; credit Accounts Receivable/Joe. 
B) Debit Bad Debt Expense; credit Accounts Receivable/Joe. 
C) Debit Allowance for Doubtful Accounts; credit Accounts Receivable/Joe. 
D) Debit Accounts Receivable/Joe; credit Allowance for Doubtful Accounts. 
A) Debit Cash; credit Accounts Receivable/Joe. 
B) Debit Bad Debt Expense; credit Accounts Receivable/Joe. 
C) Debit Allowance for Doubtful Accounts; credit Accounts Receivable/Joe. 
D) Debit Accounts Receivable/Joe; credit Allowance for Doubtful Accounts.

Question 18

The journal entry to record the set-up of a petty cash fund is to debit Petty Cash and to credit Cash.

Accepted Answer

A) True 
 B)False

Question 19

A company may have receivables such as loans to employees and interest receivable.

Accepted Answer

A) True 
 B)False

Question 20

Good internal control policies dictate that the purchasing agent should prepare the:

Accepted Answer

A) checks for payment. 
B) purchase order. 
C) receiving report. 
D) purchase order and receiving report. 
A) checks for payment. 
B) purchase order. 
C) receiving report. 
D) purchase order and receiving report.

If a company has n/120-credit terms, you would expect its Accounts Receivable turnover to be:

A customer's written promise to pay an amount of money to a business with interest is a(n)________ of the business.

Pirates Party Supply deposited a check for $695, but it was recorded on their books as a check for $536. This error of $159 would be:

If a company has n/90-credit terms, you would expect its Accounts Receivable turnover to be:

A cost incurred by the seller when credit customers do not pay is called:

Principal is the amount loaned out by the and borrowed by the .

On March 15, Diego paid $7,750 to Island, Inc. to fulfill his promissory note agreement. Of the $7,750, $750 is interest. The journal entry Island, Inc. will record is to:

Separation of duties is essential for internal control over cash receipts and cash payments.

Robbins Company has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts. The current balance in Allowance for Doubtful Accounts is a $938 credit.

Capital Masonry has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts. The current balance in Allowance for Doubtful Accounts is a $145 debit.

Under the allowance method, to record the receipt of cash after an account has previously being written off, you would first:

The account receivable turnover is computed by taking the average net Accounts Receivable and dividing it by the net credit sales.

The amount loaned out by the payee is called the maturity value.

Leo Company has a petty cash fund of $300. At the end of the month, $42 remains in the fund along with $260. in various receipts. The journal entry to replenish the fund would be:

As part of the procedure to properly control cash payments received in the mail, after the mailroom employee opens the cash receipts, the checks then go to the:

Using a 365-day year, the maturity value of a 180-day note for $3,000 at 9% annual interest is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Joe is a customer of Bobble, Inc. which uses the allowance method to account for uncollectible accounts. The company wrote off his account of $2,000 on March 15. On June 11, he sent in a payment of $800. What will Bobble, Inc. record first to reinstate his account?

The journal entry to record the set-up of a petty cash fund is to debit Petty Cash and to credit Cash.

A company may have receivables such as loans to employees and interest receivable.

Good internal control policies dictate that the purchasing agent should prepare the:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 7: Cash and Receivables

If a company has n/120-credit terms, you would expect its Accounts Receivable turnover to be:

A customer's written promise to pay an amount of money to a business with interest is a(n)________ of the business.

Pirates Party Supply deposited a check for $695, but it was recorded on their books as a check for $536. This error of $159 would be:

If a company has n/90-credit terms, you would expect its Accounts Receivable turnover to be:

A cost incurred by the seller when credit customers do not pay is called:

Principal is the amount loaned out by the ________ and borrowed by the ________.

On March 15, Diego paid $7,750 to Island, Inc. to fulfill his promissory note agreement. Of the $7,750, $750 is interest. The journal entry Island, Inc. will record is to:

Separation of duties is essential for internal control over cash receipts and cash payments.

Robbins Company has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts. The current balance in Allowance for Doubtful Accounts is a $938 credit.

Capital Masonry has given you the following information from its aging of Accounts Receivable. Using this information, determine the amount of the journal entry to record the estimated uncollectible accounts. The current balance in Allowance for Doubtful Accounts is a $145 debit.

Under the allowance method, to record the receipt of cash after an account has previously being written off, you would first:

The account receivable turnover is computed by taking the average net Accounts Receivable and dividing it by the net credit sales.

The amount loaned out by the payee is called the maturity value.

Leo Company has a petty cash fund of $300. At the end of the month, $42 remains in the fund along with $260. in various receipts. The journal entry to replenish the fund would be:

As part of the procedure to properly control cash payments received in the mail, after the mailroom employee opens the cash receipts, the checks then go to the:

Using a 365-day year, the maturity value of a 180-day note for $3,000 at 9% annual interest is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Joe is a customer of Bobble, Inc. which uses the allowance method to account for uncollectible accounts. The company wrote off his account of $2,000 on March 15. On June 11, he sent in a payment of $800. What will Bobble, Inc. record first to reinstate his account?

The journal entry to record the set-up of a petty cash fund is to debit Petty Cash and to credit Cash.

A company may have receivables such as loans to employees and interest receivable.

Good internal control policies dictate that the purchasing agent should prepare the:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters

Principal is the amount loaned out by the and borrowed by the .