Question 1

A company receives a 10%,120-day note for $1,500.The total interest due on the maturity date is: (Use 360 days a year.)

Accepted Answer

A) $50.00. 
B) $150.00. 
C) $75.00. 
D) $37.50. 
E) $87.50. 
A) $50.00. 
B) $150.00. 
C) $75.00. 
D) $37.50. 
E) $87.50.

Question 2

On November 1,Orpheum Company accepted a $10,000,90-day,8% note from a customer to settle his account.What entry should be made on the November 1 to record the acceptance of the note?

Accepted Answer

A) Debit Note Receivable $10,000; credit Cash $10,000. 
B) Debit Note Receivable $10,000; credit Accounts Receivable $10,000. 
C) Debit Note Receivable $10,000; credit Sales $10,000. 
D) Debit Note Receivable $10,200; credit Accounts Receivable $10,000; credit Interest Revenue $200. 
E) Debit Sales $10,000; credit Accounts Receivable $10,000. 
A) Debit Note Receivable $10,000; credit Cash $10,000. 
B) Debit Note Receivable $10,000; credit Accounts Receivable $10,000. 
C) Debit Note Receivable $10,000; credit Sales $10,000. 
D) Debit Note Receivable $10,200; credit Accounts Receivable $10,000; credit Interest Revenue $200. 
E) Debit Sales $10,000; credit Accounts Receivable $10,000.

Question 3

The accounts receivable turnover is calculated by:

Accepted Answer

A) Dividing net sales by average accounts receivable. 
B) Dividing net sales by average accounts receivable and multiplying by 365. 
C) Dividing average accounts receivable by net sales. 
D) Dividing average accounts receivable by net sales and multiplying by 365. 
E) Dividing net income by average accounts receivable. 
A) Dividing net sales by average accounts receivable. 
B) Dividing net sales by average accounts receivable and multiplying by 365. 
C) Dividing average accounts receivable by net sales. 
D) Dividing average accounts receivable by net sales and multiplying by 365. 
E) Dividing net income by average accounts receivable.

Question 4

Prepare general journal entries for the following transactions of Norman Company,assuming they use the allowance method to account for uncollectible accounts.

Accepted Answer

The answer of Prepare general journal entries for the following...

Question 5

What is the accounts receivable turnover ratio? How is it calculated and how is it used to assess financial condition?

Accepted Answer

The accounts receivable turnover ratio i

Question 6

The interest accrued on $7,500 at 6% for 90 days is: $\bold{\text{(Use 360 days a year.)}}$

Accepted Answer

A) $450.00. 
B) $37.50. 
C) $112.50. 
D) $11.25. 
E) $1,800.00. 
A) $450.00. 
B) $37.50. 
C) $112.50. 
D) $11.25. 
E) $1,800.00.

Question 7

Accrued interest on outstanding notes receivable should be recorded at the end of each accounting period.

Accepted Answer

A) True 
 B)False

Question 8

The person who signs a note receivable and promises to pay the principal and interest is the:

Accepted Answer

A) Maker. 
B) Payee. 
C) Holder. 
D) Receiver. 
E) Owner. 
A) Maker. 
B) Payee. 
C) Holder. 
D) Receiver. 
E) Owner.

Question 9

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.
-Jasper's entry to record the transaction should be:

Accepted Answer

A) Debit Notes Receivable for $25,000; credit Cash $25,000. 
B) Debit Accounts Receivable $25,000; credit Notes Receivable $25,000. 
C) Debit Cash $25,000; credit Notes Receivable for $25,000. 
D) Debit Notes Payable $25,000; credit Accounts Payable $25,000. 
E) Debit Notes Receivable $25,000; credit Sales $25,000. 
A) Debit Notes Receivable for $25,000; credit Cash $25,000. 
B) Debit Accounts Receivable $25,000; credit Notes Receivable $25,000. 
C) Debit Cash $25,000; credit Notes Receivable for $25,000. 
D) Debit Notes Payable $25,000; credit Accounts Payable $25,000. 
E) Debit Notes Receivable $25,000; credit Sales $25,000.

Question 10

Gideon Company uses the direct write-off method of accounting for uncollectible accounts.On May 3,the Gideon Company wrote off the $2,000 uncollectible account of its customer,A.Hopkins.The entry or entries Gideon makes to record the write off of the account on May 3 is:

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 11

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

Accepted Answer

A) An increase in the expenses of the current period. 
B) An increase in current assets. 
C) A reduction in equity. 
D) No effect on the expenses of the current period. 
E) A reduction in current liabilities. 
A) An increase in the expenses of the current period. 
B) An increase in current assets. 
C) A reduction in equity. 
D) No effect on the expenses of the current period. 
E) A reduction in current liabilities.

Question 12

A company has net sales of $1,200,000 and average accounts receivable of $400,000.What is its accounts receivable turnover for the period?

Accepted Answer

A) 0.33 
B) 5.00 
C) 20.0 
D) 73.0 
E) 3.0 
A) 0.33 
B) 5.00 
C) 20.0 
D) 73.0 
E) 3.0

Question 13

Installment accounts receivable is another name for aging of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 14

The Lily Company uses the percent of receivables method of accounting for uncollectible accounts receivable,and a perpetual inventory system.As of January 1,its net accounts receivable totaled $192,000 (Accounts Receivable $200,000 less an $8,000 Allowance for Doubtful Accounts).During the current year,the following transactions occurred.

Accepted Answer

The answer of The Lily Company uses the percent of...

Question 15

Using the allowance method for bad debts,the end of the period adjusting entry for estimated bad debts is:

Accepted Answer

A) Debit Bad Debts Expense and credit Accounts Receivable. 
B) Debit Allowance for Doubtful Accounts and credit Accounts Receivable. 
C) Debit Accounts Receivable and credit Allowance for Doubtful Accounts. 
D) Debit Allowance for Doubtful Accounts and credit Bad Debts Expense. 
E) Debit Bad Debts Expense and credit Allowance for Doubtful Accounts. 
A) Debit Bad Debts Expense and credit Accounts Receivable. 
B) Debit Allowance for Doubtful Accounts and credit Accounts Receivable. 
C) Debit Accounts Receivable and credit Allowance for Doubtful Accounts. 
D) Debit Allowance for Doubtful Accounts and credit Bad Debts Expense. 
E) Debit Bad Debts Expense and credit Allowance for Doubtful Accounts.

Question 16

Morgan had net sales of $310,000 and average accounts receivable of $75,600.Its competitor,Stanley,had net sales of $290,000 and average accounts receivables of $61,350.Calculate the accounts receivable turnover for both companies.Which company is doing a better job of managing its accounts receivables?

Accepted Answer

@#IMG-DLM& Stanley has a higher accounts

Question 17

Thatcher Company had a January 1,credit balance in its Allowance for Doubtful Accounts of $4,000 for the current year.The following transactions and events affected the Allowance for Doubtful Accounts during the current year:
   What amount should appear in the allowance for doubtful accounts in the December 31,balance sheet for the current year?

Accepted Answer

$4,000 - $

Question 18

Jervis sells $75,000 of its accounts receivable to Northern Bank in order to obtain necessary cash.Northern Bank charges a 5% factoring fee.What entry should Jervis make to record the transaction?

Accepted Answer

A) Debit Cash $71,250; debit Factoring Fee Expense $3,750; credit Accounts Receivable $75,000 
B) Debit Accounts Receivable $71,250; debit Factoring Fee Expense $3,750; credit Cash $75,000 
C) Debit Cash $75,000; credit Factoring Fee Expense $3,750; credit Accounts Receivable $75,000 
D) Debit Cash $71,250; credit Accounts Receivable $71,250 
E) Debit Accounts Receivable $75,000; credit Factoring Fee Expense $3,750; credit Cash $71,250 
A) Debit Cash $71,250; debit Factoring Fee Expense $3,750; credit Accounts Receivable $75,000 
B) Debit Accounts Receivable $71,250; debit Factoring Fee Expense $3,750; credit Cash $75,000 
C) Debit Cash $75,000; credit Factoring Fee Expense $3,750; credit Accounts Receivable $75,000 
D) Debit Cash $71,250; credit Accounts Receivable $71,250 
E) Debit Accounts Receivable $75,000; credit Factoring Fee Expense $3,750; credit Cash $71,250

Question 19

The allowance method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce.

Accepted Answer

A) True 
 B)False

Exam 7: Accounting for Receivables

A company receives a 10%,120-day note for $1,500.The total interest due on the maturity date is: (Use 360 days a year.)

On November 1,Orpheum Company accepted a $10,000,90-day,8% note from a customer to settle his account.What entry should be made on the November 1 to record the acceptance of the note?

The accounts receivable turnover is calculated by:

Prepare general journal entries for the following transactions of Norman Company,assuming they use the allowance method to account for uncollectible accounts.

What is the accounts receivable turnover ratio? How is it calculated and how is it used to assess financial condition?

The interest accrued on $7,500 at 6% for 90 days is: (Use 360 days a year.)\bold{\text{(Use 360 days a year.)}}(Use 360 days a year.)

Accrued interest on outstanding notes receivable should be recorded at the end of each accounting period.

The person who signs a note receivable and promises to pay the principal and interest is the:

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co. -Jasper's entry to record the transaction should be:

Gideon Company uses the direct write-off method of accounting for uncollectible accounts.On May 3,the Gideon Company wrote off the $2,000 uncollectible account of its customer,A.Hopkins.The entry or entries Gideon makes to record the write off of the account on May 3 is:

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

A company has net sales of $1,200,000 and average accounts receivable of $400,000.What is its accounts receivable turnover for the period?

Installment accounts receivable is another name for aging of accounts receivable.

Using the allowance method for bad debts,the end of the period adjusting entry for estimated bad debts is:

Jervis sells $75,000 of its accounts receivable to Northern Bank in order to obtain necessary cash.Northern Bank charges a 5% factoring fee.What entry should Jervis make to record the transaction?

The allowance method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters

The interest accrued on $7,500 at 6% for 90 days is: $\bold{\text{(Use 360 days a year.)}}$