Question 1

Separate accounts receivable information for each customer is important because it reveals all of the following except:

Accepted Answer

A)  How much each customer has purchased on credit. 
B)  How much each customer has paid. 
C)  How much each customer still owes. 
D)  The basis for sending bills to customers. 
E)  When the customer intends to pay outstanding balances. 
A)  How much each customer has purchased on credit. 
B)  How much each customer has paid. 
C)  How much each customer still owes. 
D)  The basis for sending bills to customers. 
E)  When the customer intends to pay outstanding balances.

Question 2

Under IFRS,the term provision:

Accepted Answer

A)  Refers to expense. 
B)  Usually refers to a liability whose amount or timing is uncertain. 
C)  Means establishing a provision for bad debts. 
D)  Means establishing a contra-asset account. 
E)  Means establishing an asset account. 
A)  Refers to expense. 
B)  Usually refers to a liability whose amount or timing is uncertain. 
C)  Means establishing a provision for bad debts. 
D)  Means establishing a contra-asset account. 
E)  Means establishing an asset account.

Question 3

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

Accepted Answer

July = 31 - 12 = 19 days,Augus

Question 4

________ refers to the expected proceeds from converting an asset into cash.

Accepted Answer

The answer of ________ refers to the expected proceeds from...

Question 5

Match each of the following terms with the appropriate definitions.
-The expected proceeds from converting an asset into cash.

Accepted Answer

A) Expense recognition (matching) principle 
B) Realizable value 
C) Interest 
D) Bad debts 
E) Accounts receivable
F)Aging of accounts receivable
G)Allowance for doubtful accounts
H)Promissory note
I)Payee of a note
J)Maker of a note 
A) Expense recognition (matching) principle 
B) Realizable value 
C) Interest 
D) Bad debts 
E) Accounts receivable
F)Aging of accounts receivable
G)Allowance for doubtful accounts
H)Promissory note
I)Payee of a note
J)Maker of a note

Question 6

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

Accepted Answer

A) True 
 B)False

Question 7

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

Accepted Answer

A)  $10,450 
B)  $10,900 
C)  $10,075 
D)  $11,800 
E)  $10,300 
A)  $10,450 
B)  $10,900 
C)  $10,075 
D)  $11,800 
E)  $10,300

Question 8

On November 1,Orpheum Company accepted a $10,000,90-day,8% note from a customer settle an 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 9

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

Accepted Answer

A) True 
 B)False

Question 10

The expense recognition (matching)principle requires that accrued interest on outstanding notes receivable be recorded at the end of each accounting period.

Accepted Answer

A) True 
 B)False

Question 11

Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year.Betterman's turnover was 9.3 for this year and 9.3 for last year.These results imply that:

Accepted Answer

A)  Betterman has the better turnover for both years. 
B)  Axle has the better turnover for both years. 
C)  Betterman's turnover is improving. 
D)  Axle's credit policies are too loose. 
E)  Betterman is collecting its receivables more quickly than Axle in both years. 
A)  Betterman has the better turnover for both years. 
B)  Axle has the better turnover for both years. 
C)  Betterman's turnover is improving. 
D)  Axle's credit policies are too loose. 
E)  Betterman is collecting its receivables more quickly than Axle in both years.

Question 12

The account receivable turnover measures:

Accepted Answer

A)  How long it takes to sell accounts receivable to a factor. 
B)  How often, on average, receivables are received and collected during the period. 
C)  The relation of cash sales to credit sales. 
D)  How long it takes to sell merchandise inventory. 
E)  All of the options are correct. 
A)  How long it takes to sell accounts receivable to a factor. 
B)  How often, on average, receivables are received and collected during the period. 
C)  The relation of cash sales to credit sales. 
D)  How long it takes to sell merchandise inventory. 
E)  All of the options are correct.

Question 13

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.On July 10,Gideon received a check for the full amount of $2,000 from Hopkins.On July 10,the entry or entries Gideon makes to record the recovery of the bad debt is:

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable-A Hopkins } & 2,000 & \
\hline \text { Allowance for Doubtful Accounts } & & 2,000 \
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable-A Hopkins } & & 2,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 2,000 & \
\hline \text { Bad debts expense } & & 2,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable-A Hopkins } & 2,000 & \
\hline \text { Bad debts expense } & & 2,000 \
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable-A Hopkirs } & & 2,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Allowance for Doubtful Accounts } & 2,000 & \
\hline \text { Accounts Receivable-A Hopkinse } & & 2,000 \
\hline \text { Accounts Receivable-A Hopkins } & 2,000 & \
\hline \text { Cash } & & 2,000 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 2,000 & \
\hline \text { Accournts Receivable-A Hopkins } & & 2,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable-A Hopkins } & 2,000 & \
\hline \text { Allowance for Doubtful Accounts } & & 2,000 \
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable-A Hopkins } & & 2,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 2,000 & \
\hline \text { Bad debts expense } & & 2,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable-A Hopkins } & 2,000 & \
\hline \text { Bad debts expense } & & 2,000 \
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable-A Hopkirs } & & 2,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Allowance for Doubtful Accounts } & 2,000 & \
\hline \text { Accounts Receivable-A Hopkinse } & & 2,000 \
\hline \text { Accounts Receivable-A Hopkins } & 2,000 & \
\hline \text { Cash } & & 2,000 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 2,000 & \
\hline \text { Accournts Receivable-A Hopkins } & & 2,000 \
\hline
\end{array}$$

Question 14

Jordan Co.uses the allowance method of accounting for uncollectible accounts.Jordan Co.accepted a $5,000,12%,90-day note dated May 16,from Beckam Co.in exchange for its past-due account receivable.Make the necessary general journal entries for Jordan Co.on May 16 and the August 14 maturity date,assuming that the:
a.Note is held until maturity and collected in full at that time.
b.Note is dishonored; the amount of the note and its interest are written off as uncollectible.

Accepted Answer

The answer of Jordan Co.uses the allowance method of accounting...

Question 15

The ________ method uses both past and current receivables to estimate the allowance amount,and assumes that the longer an amount is past due,the more likely it is to be uncollectible.

Accepted Answer

aging of a

Question 16

If a customer owes interest on accounts receivable,Interest Receivable is debited and Accounts Receivable is credited.

Accepted Answer

A) True 
 B)False

Question 17

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 18

On May 31,Cray has $375,800 of accounts receivable.Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $14,250.
1.Prepare journal entries to record the following selected May transactions.The company uses the perpetual inventory system.
2.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 balance sheet.
a.Sold $415,200 of merchandise (that cost $249,000)to customers on credit.
b.Received $465,800 cash in payment of accounts receivable.
c.Wrote off $15,800 of uncollectible accounts receivable.
d.In adjusting the accounts on May 31,its fiscal year-end,the company estimated that 4.0% of accounts receivable will be uncollectible.

Accepted Answer

a.
  Calculation: Accounts Receivable $3

Question 19

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used,a company should debit ________ and credit accounts receivable.

Accepted Answer

allowance

Question 20

As long as a company accurately records total credit sales information,it is not necessary to have separate accounts for specific customers.

Accepted Answer

A) True 
 B)False

Separate accounts receivable information for each customer is important because it reveals all of the following except:

Under IFRS,the term provision:

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

________ refers to the expected proceeds from converting an asset into cash.

Match each of the following terms with the appropriate definitions. -The expected proceeds from converting an asset into cash.

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

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

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

The expense recognition (matching)principle requires that accrued interest on outstanding notes receivable be recorded at the end of each accounting period.

Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year.Betterman's turnover was 9.3 for this year and 9.3 for last year.These results imply that:

The account receivable turnover measures:

The ________ method uses both past and current receivables to estimate the allowance amount,and assumes that the longer an amount is past due,the more likely it is to be uncollectible.

If a customer owes interest on accounts receivable,Interest Receivable is debited and Accounts Receivable is credited.

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

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used,a company should debit ________ and credit accounts receivable.

As long as a company accurately records total credit sales information,it is not necessary to have separate accounts for specific customers.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

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Exam 7: Accounting for Receivables

Separate accounts receivable information for each customer is important because it reveals all of the following except:

Under IFRS,the term provision:

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

________ refers to the expected proceeds from converting an asset into cash.

Match each of the following terms with the appropriate definitions. -The expected proceeds from converting an asset into cash.

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

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

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

The expense recognition (matching)principle requires that accrued interest on outstanding notes receivable be recorded at the end of each accounting period.

Axle Co.'s accounts receivable turnover was 9.9 for this year and 11.0 for last year.Betterman's turnover was 9.3 for this year and 9.3 for last year.These results imply that:

The account receivable turnover measures:

The ________ method uses both past and current receivables to estimate the allowance amount,and assumes that the longer an amount is past due,the more likely it is to be uncollectible.

If a customer owes interest on accounts receivable,Interest Receivable is debited and Accounts Receivable is credited.

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

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used,a company should debit ________ and credit accounts receivable.

As long as a company accurately records total credit sales information,it is not necessary to have separate accounts for specific customers.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters