Exam 4: Payment for Goods and Services: Cash and Accounts Receivable

During August,Quality Auto Parts had credit sales of $88,500,of which $20,000 were sales to companies in foreign countries.Average net receivables were $2,950.Calculate the accounts receivable turnover.

Acme,Inc.accepted a promissory note from NadirCo,who promised to pay Acme $5,000 plus 6% interest at the end of four months.What is the amount of interest that will be paid at the end of the four-month period?

Timmy's Tires sold $18,750 worth of tires to customers using VISA.The credit card fee is 4% of sales.The amount of sales Timmy's Tires should recognize is ________.

A positive balance in the allowance for uncollectible accounts before an adjusting entry for bad debts expense is recorded means management understated its bad debts expense in the prior period.

What is the effect of the adjusting entry for bad debts expense on the Statement of changes in shareholders' equity?

Brooke's Bikes sold $11,235 worth of mountain bikes to customers using bank credit cards during October.The banks charge a credit card fee of 4% of sales.The amount of sales Brooke's Bikes should recognize for October is _________.

Which of the following statements is FALSE about the allowance method for uncollectible accounts?

Y Company has the following accounting balances at the end of the year before adjustments: The company estimates that 20% of accounts receivable will be uncollectible.After the correct adjusting entry has been made,which of the following is correct about Bad debts expense for the year and Allowance for uncollectible accounts at the end of the year?

"NSF" checks are checks that have been deposited in the bank,but "bounced".

On June 30,the accountant for Team Shirts was reviewing items related to accounts receivable.The following information was gathered for June: a.The April 1 balance in the Allowance for uncollectible accounts was $(1,200). b.$300 owed by the Power Pugs had been written off in June. c.Credit sales for June were $7,000.The accountant for Team Shirts estimated that 3% of the sales would eventually be uncollectible. 1.What is the amount of bad debts expense for June? On which financial statement is it found? 2.What will be the amount in the Allowance for uncollectible accounts at June 30? On which financial statement is it found?

The amount of interest revenue recorded during a single month on a 6%,3-month note receivable will be the same as the interest revenue on a 6%,6-month note receivable.

The adjusting entry to record bad debts expense using the allowance method usually decreases net income.

The write-off of a specific customer's account receivable will cause the current ratio to decrease.

The March bank statement for Jem's Jewelers showed an NSF check for $125.On the bank reconciliation,the amount of the check should be ________.

The adjusting entry to record bad debts expense using the allowance method usually decreases total assets.

Bad debts expense decreases net income.

X Company has the following accounting balances at the end of the year before adjustments: The company estimates that 2% of net sales will be uncollectible.After the correct adjusting entry has been made,which of the following is correct about Bad debts expense for the year and Allowance for uncollectible accounts at the end of the year?

South Sea's sales were $60,000 for 2011 and $45,000 for 2012.Average net receivables were $4,000 for both 2011 and 2012.The receivables turnover for 2011 was ________.

Accounts receivable are interest-bearing,while notes receivable are not.