Exam 7: Cash and Receivables

Ben is a customer of Haskins & Co.which uses the allowance method to account for uncollectible accounts.The company wrote off his account of $1,200 on August 15.On October 12,he sent in a payment of $560.What will Haskins & Co.record first to reinstate his account?

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

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

The contra-account,Allowance for Doubtful Accounts,is credited when journal entries are made for estimates of bad debts.

The cash register provides control over the cash receipts for a retail business.

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

Using a 360-day year,the maturity value of a 90-day note for $3,500 at 8% annual interest is:

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

A petty cash fund may be established for minor expenditures,such as postage.

The most common types of financial institution credit cards are MasterCard and Visa.

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 $958 credit.

Cash is one of the least vulnerable assets that a business has.

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

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:

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

Using a 360-day year,the maturity value of a 60-day note for $1,500 at 7% annual interest is (rounded to the nearest cent):

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

Stella Company wants to increase the size of its petty cash fund from $150 to $250,the journal entry will be:

The entity to whom the maker promises future payment is referred to as:

Island Equipment wants to increase the size of its petty cash fund from $350 to $400.Island Equipment will: