Question 1

Accounts Receivable may be reported net of Allowance for Doubtful Accounts.

Accepted Answer

A) True 
 B)False

Question 2

Island Equipment wants to increase the size of its petty cash fund from $350 to $440. Island Equipment will:

Accepted Answer

A) not be allowed to do this, $440 is too large for a petty cash fund. 
B) debit Cash, $440; credit Petty Cash $440. 
C) debit Petty Cash $440, credit Cash $440. 
D) debit Petty Cash $90, credit Cash $90. 
A) not be allowed to do this, $440 is too large for a petty cash fund. 
B) debit Cash, $440; credit Petty Cash $440. 
C) debit Petty Cash $440, credit Cash $440. 
D) debit Petty Cash $90, credit Cash $90.

Question 3

A company has $294,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $2,210 credit balance. If the company estimates that $7,640 of accounts will be uncollectible based on an aging of Accounts Receivable, what will be the amount of the journal entry to record estimated uncollectible accounts?

Accepted Answer

A) $2,210 
B) $9,850 
C) $7,640 
D) $5,430 
A) $2,210 
B) $9,850 
C) $7,640 
D) $5,430

Question 4

The business or person that signs the promissory note and agrees to pay the required amount is called the payee.

Accepted Answer

A) True 
 B)False

Question 5

There are two methods for accounting for uncollectible receivables.

Accepted Answer

A) True 
 B)False

Question 6

Quicksilver Co. has cash of $41,000; net Accounts Receivable of $51,000; short-term investments of $15,000 and inventory of $32,000. It also has $28,000 in current liabilities and $39,000 in long-term liabilities. The quick ratio for Quicksilver is:

Accepted Answer

A) 4.96. 
B) 3.82. 
C) 0.80. 
D) 1.60. 
A) 4.96. 
B) 3.82. 
C) 0.80. 
D) 1.60.

Question 7

The net realizable value of Accounts Receivable is computed by subtracting the allowance for doubtful accounts from the amount in the Accounts Receivable control account.

Accepted Answer

A) True 
 B)False

Question 8

Magick, Inc. converted a $5,000 account receivable from Ronaldo to a 75-day, 7% note receivable. The maturity value (assume a 360-day year)that will be due from Ronaldo in 75 days is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Accepted Answer

A) $5,000. 
B) $5,073. 
C) $5,350. 
D) some other number. 
A) $5,000. 
B) $5,073. 
C) $5,350. 
D) some other number.

Question 9

Accounts Receivable are reported at current market value in the Current Assets sections of the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 10

The journal entry to write off a customer's account under the allowance method is:

Accepted Answer

A) Bad Debt Expense, debit; Allowance for Uncollectible Accounts, credit. 
B) not required. 
C) Allowance for Uncollectible Accounts, debit; Accounts Receivable/customer name, credit. 
D) Bad Debt Expense, debit; Accounts Receivable/customer name, credit. 
A) Bad Debt Expense, debit; Allowance for Uncollectible Accounts, credit. 
B) not required. 
C) Allowance for Uncollectible Accounts, debit; Accounts Receivable/customer name, credit. 
D) Bad Debt Expense, debit; Accounts Receivable/customer name, credit.

Question 11

Quick assets include cash, Accounts Receivable, and prepaid expenses.

Accepted Answer

A) True 
 B)False

Question 12

Accounts Receivable are classified as Current Assets.

Accepted Answer

A) True 
 B)False

Question 13

The allowance method of accounting for bad debts is required by GAAP because of the materiality principle.

Accepted Answer

A) True 
 B)False

Question 14

Given the following information from Mozart & Co, what would the current assets section of the balance sheet include?

Accepted Answer

A) Cash $23,000; Accounts Receivable $11,000; Inventory $42,000 
B) Cash $20,000; Accounts Receivable$11,000; Inventory $42,000 
C) Cash & Cash Equivalents $34,000; Inventory $42,000 
D) Cash $20,000; Accounts Receivable $11,000 
A) Cash $23,000; Accounts Receivable $11,000; Inventory $42,000 
B) Cash $20,000; Accounts Receivable$11,000; Inventory $42,000 
C) Cash & Cash Equivalents $34,000; Inventory $42,000 
D) Cash $20,000; Accounts Receivable $11,000

Question 15

On September 1, 2013, Sharp Corp. lent $2,400 to Marla Smith on a 6-month 4% promissory note. The journal entry to record the note for Sharp Corp. would be to:

Accepted Answer

A) debit Note Receivable/M Smith, $2,400; credit Cash, $2,400. 
B) debit Note Receivable/M Smith, $2,448; credit Cash, $2,448. 
C) debit Note Receivable/M Smith, $48; credit Interest Income, $48. 
D) debit Cash, $2,400; credit Note Payable/M Smith, $2,400. 
A) debit Note Receivable/M Smith, $2,400; credit Cash, $2,400. 
B) debit Note Receivable/M Smith, $2,448; credit Cash, $2,448. 
C) debit Note Receivable/M Smith, $48; credit Interest Income, $48. 
D) debit Cash, $2,400; credit Note Payable/M Smith, $2,400.

Question 16

Deposits in transit are:

Accepted Answer

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

Question 17

The receivables collection period measures the ability to collect cash from customers who buy on credit.

Accepted Answer

A) True 
 B)False

Question 18

Accounts Receivable should be reported at ________ in the ________ section of a company's Balance Sheet.

Accepted Answer

A) Market value; Long-Term Assets 
B) Net realizable value; Long-Term Assets 
C) Net realizable value; Current Assets 
D) Market value; Current Assets 
A) Market value; Long-Term Assets 
B) Net realizable value; Long-Term Assets 
C) Net realizable value; Current Assets 
D) Market value; Current Assets

Question 19

Receivables of a company CANNOT be long-term assets.

Accepted Answer

A) True 
 B)False

Question 20

GAAP generally allows the direct write-off method for accounting for bad debts.

Accepted Answer

A) True 
 B)False

Accounts Receivable may be reported net of Allowance for Doubtful Accounts.

Island Equipment wants to increase the size of its petty cash fund from $350 to $440. Island Equipment will:

The business or person that signs the promissory note and agrees to pay the required amount is called the payee.

There are two methods for accounting for uncollectible receivables.

Quicksilver Co. has cash of $41,000; net Accounts Receivable of $51,000; short-term investments of $15,000 and inventory of $32,000. It also has $28,000 in current liabilities and $39,000 in long-term liabilities. The quick ratio for Quicksilver is:

The net realizable value of Accounts Receivable is computed by subtracting the allowance for doubtful accounts from the amount in the Accounts Receivable control account.

Magick, Inc. converted a $5,000 account receivable from Ronaldo to a 75-day, 7% note receivable. The maturity value (assume a 360-day year)that will be due from Ronaldo in 75 days is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Accounts Receivable are reported at current market value in the Current Assets sections of the Balance Sheet.

The journal entry to write off a customer's account under the allowance method is:

Quick assets include cash, Accounts Receivable, and prepaid expenses.

Accounts Receivable are classified as Current Assets.

The allowance method of accounting for bad debts is required by GAAP because of the materiality principle.

Given the following information from Mozart & Co, what would the current assets section of the balance sheet include?

On September 1, 2013, Sharp Corp. lent $2,400 to Marla Smith on a 6-month 4% promissory note. The journal entry to record the note for Sharp Corp. would be to:

Deposits in transit are:

The receivables collection period measures the ability to collect cash from customers who buy on credit.

Accounts Receivable should be reported at in the section of a company's Balance Sheet.

Receivables of a company CANNOT be long-term assets.

GAAP generally allows the direct write-off method for accounting for bad debts.

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

Accounts Receivable may be reported net of Allowance for Doubtful Accounts.

Island Equipment wants to increase the size of its petty cash fund from $350 to $440. Island Equipment will:

The business or person that signs the promissory note and agrees to pay the required amount is called the payee.

There are two methods for accounting for uncollectible receivables.

Quicksilver Co. has cash of $41,000; net Accounts Receivable of $51,000; short-term investments of $15,000 and inventory of $32,000. It also has $28,000 in current liabilities and $39,000 in long-term liabilities. The quick ratio for Quicksilver is:

The net realizable value of Accounts Receivable is computed by subtracting the allowance for doubtful accounts from the amount in the Accounts Receivable control account.

Magick, Inc. converted a $5,000 account receivable from Ronaldo to a 75-day, 7% note receivable. The maturity value (assume a 360-day year)that will be due from Ronaldo in 75 days is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Accounts Receivable are reported at current market value in the Current Assets sections of the Balance Sheet.

The journal entry to write off a customer's account under the allowance method is:

Quick assets include cash, Accounts Receivable, and prepaid expenses.

Accounts Receivable are classified as Current Assets.

The allowance method of accounting for bad debts is required by GAAP because of the materiality principle.

Given the following information from Mozart & Co, what would the current assets section of the balance sheet include?

On September 1, 2013, Sharp Corp. lent $2,400 to Marla Smith on a 6-month 4% promissory note. The journal entry to record the note for Sharp Corp. would be to:

Deposits in transit are:

The receivables collection period measures the ability to collect cash from customers who buy on credit.

Accounts Receivable should be reported at ________ in the ________ section of a company's Balance Sheet.

Receivables of a company CANNOT be long-term assets.

GAAP generally allows the direct write-off method for accounting for bad debts.

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

Accounts Receivable should be reported at in the section of a company's Balance Sheet.