Question 1

Where can the amounts needed to compute the accounts receivable turnover ratio be found?

Accepted Answer

A) The income statement 
B) The balance sheet 
C) The statement of cash flows 
D) Both the income statement and balance sheet 
A) The income statement 
B) The balance sheet 
C) The statement of cash flows 
D) Both the income statement and balance sheet D

Question 2

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31.

Required
Identify the maturity date of the note.

Accepted Answer

November 1,2017

Question 3

On July 1,2017,Falcon Company received a $20,000 promissory note for services from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2018. ​
The effect on Falcon's financial statements on July 1,2017,is which of the following?

Accepted Answer

A) Assets and stockholders' equity increases. 
B) Assets decrease and stockholders' equity decreases. 
C) Assets decrease. 
D) There is no net change in assets. 
A) Assets and stockholders' equity increases. 
B) Assets decrease and stockholders' equity decreases. 
C) Assets decrease. 
D) There is no net change in assets. A

Question 4

If a company uses the allowance method to account for bad debts,when will the company's owners' equity decrease?

Accepted Answer

A) At the date a customer's account is written off 
B) At the end of the accounting period when an adjustment for bad debts is recorded 
C) At the date a customer's account is determined to be uncollectible 
D) When the accounts receivable amount becomes past due 
A) At the date a customer's account is written off 
B) At the end of the accounting period when an adjustment for bad debts is recorded 
C) At the date a customer's account is determined to be uncollectible 
D) When the accounts receivable amount becomes past due

Question 5

During 2017,the accounts receivable turnover ratio for Cordner Company increased from 10 to 14 times per year.Which one of the following statements is the most likely explanation for the change?

Accepted Answer

A) The company's credit department has followed up with customers whose account balances are past due in order to generate quicker collections. 
B) The company has decreased sales to its most creditworthy customers. 
C) The company has increased the amount of time customers have to pay their accounts before they are past due. 
D) The company has extended credit to more risky customers in order to increase sales. 
A) The company's credit department has followed up with customers whose account balances are past due in order to generate quicker collections. 
B) The company has decreased sales to its most creditworthy customers. 
C) The company has increased the amount of time customers have to pay their accounts before they are past due. 
D) The company has extended credit to more risky customers in order to increase sales.

Question 6

The payee of a note recognizes __________ on its income statement.

Accepted Answer

The answer of The payee of a note recognizes __________...

Question 7

Music Corporation
The data below are for Music Corporation for 2017.
?
 $$\begin{array} { l r } 
\text { Accounts receivable-January 1,2017 } & \$ 236,000 \
\text { Credit sales during 2017 } & 820,000 \
\text { Collections from credit customers during 2017 } & 590,000 \
\text { Customer accounts written off as uncollectible during 2017 } & 8,000 \
\text { Allowance for doubtful accounts -January 1, 2017 } & 8,700 \
\text { Estimated uncollectible accounts based on an aging analysis } & 9,600
\end{array}$$
-Refer to the data for Music Corporation. ?
If the aging approach is used to estimate bad debts,what is the balance in Allowance for Doubtful Accounts after the bad debts expense adjustment?

Accepted Answer

A) $8,000 
B) $8,100 
C) $8,900 
D) $9,600 
A) $8,000 
B) $8,100 
C) $8,900 
D) $9,600

Question 8

Accounts receivable are shown on the balance sheet at their net realizable value.

Accepted Answer

A) True 
 B)False

Question 9

Lynx Corp.
The data presented below for Lynx Corp.are for the year ended December 31,2017:
?
 $$\begin{array} { l r } 
\text { Sales (100\% on credit) } & \$ 1,000,000 \
\text { Sales returns } & 30,000 \
\text { Accounts receivable (December 31,2017) } & 170,000 \
\text { Allowance for doubtful accounts (credit balance) } & \
\quad \text { (before adjustment at December } 31,2017 ) & 1,300 \
\text { Estimated amount of uncollectible accounts based on aging analysis } & 14,000
\end{array}$$ ?
-See the data for Lynx Corp. If Lynx Corp.uses the aging of accounts receivable approach to estimate its bad debts,what will be the net realizable value of its accounts receivable after the adjustment for bad debts expense?

Accepted Answer

A) $140,000 
B) $156,000 
C) $167,000 
D) $184,000 
A) $140,000 
B) $156,000 
C) $167,000 
D) $184,000

Question 10

On September 20,Mendes Inc.presents credit card drafts to its bank in the amount of $10,000;the collection charge is 4%.
?
Required
Analyze the adjustments needed on Mendes' books on September 20,the date of deposit.

Accepted Answer

None

Question 11

When an investor is able to secure significant influence over an investee,the __________ method of accounting is used.

Accepted Answer

The answer of When an investor is able to secure...

Question 12

The data presented below are for Falconi,Inc.for 2017.  
$\begin{array}{lr}
\text { Credit sales during the year } & \$ 2,100,000 \
\text { Accounts receivable-December } 31,2017 & 395,000 \
\text { Allowance for doubtful accounts-December } 31,2017 & 20,000 \
\text { Bad debts expense for the year } & 17,000
\end{array}$
 
-What amount will Falconi show on its year-end balance sheet for the net realizable value of its accounts receivable?

Accepted Answer

A) $378,000 
B) $375,000 
C) $358,000 
D) $ 20,000 
A) $378,000 
B) $375,000 
C) $358,000 
D) $ 20,000

Question 13

Clarion Corp.invested cash in a six-month certificate of deposit (CD)on November 1,2017.If Clarion Corp.has an accounting period that ends on December 31,2017,when should Clarion recognize interest revenue from the CD?

Accepted Answer

A) On December 31,2017,only 
B) On May 1,2018,only 
C) Both December 31,2017,and May 31,2018 
D) On the date when its income tax return is filed 
A) On December 31,2017,only 
B) On May 1,2018,only 
C) Both December 31,2017,and May 31,2018 
D) On the date when its income tax return is filed

Question 14

Baggs buys $100,000 of Vista Company bonds on January 1,2017,at face value.The bonds pay 10% interest semiannually on June 30 and December 31.If Baggs sells the bonds at 99 on July 1,2017,there will be a loss reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 15

Mellon Corporation
The data presented below are for Mellon Corporation for the year ended December 31,2017:
??
 $\begin{array}{lr}
\text { Sales (100\% on credit) } & \$ 1,500,000 \
\text { Sales returns } & 60,000 \
\text { Accounts receivable (December 31, 2017) } & 250,000 \
\text { Allowance for doubtful accounts (credit balance) (before adjustment at December } & \
31,2017 & 3,000 \
\text { Estimated amount of uncoll ectible accounts based on an aging analysis } & 31,000
\end{array}$
-Refer to the data for Mellon Corporation. ?
If Mellon uses 2% of net credit sales to estimate its bad debts,what will be the balance in the Allowance for Doubtful Accounts account after the adjustment for bad debts?

Accepted Answer

A) $33,000 
B) $31,800 
C) $27,000 
D) $25,800 
A) $33,000 
B) $31,800 
C) $27,000 
D) $25,800

Question 16

Whether investments are reported as current or noncurrent assets depends on the company's intent.

Accepted Answer

A) True 
 B)False

Question 17

Router Inc.lends $70,000 on a 120-day,9% promissory note.The total interest that Router will receive at maturity is

Accepted Answer

A) $6,300. 
B) $2,100. 
C) $525. 
D) $1,890. 
A) $6,300. 
B) $2,100. 
C) $525. 
D) $1,890.

Question 18

What are the effects on the accounting equation when a company makes the adjustment to record bad debts expense using the allowance method?

Accepted Answer

A) Assets and stockholders' equity increase. 
B) Assets and stockholders' equity decrease. 
C) Assets increase and stockholders' equity decreases. 
D) Assets decrease and stockholders' equity increases. 
A) Assets and stockholders' equity increase. 
B) Assets and stockholders' equity decrease. 
C) Assets increase and stockholders' equity decreases. 
D) Assets decrease and stockholders' equity increases.

Question 19

The maker of a note recognizes a note receivable on the balance sheet and interest revenue on its income statement.

Accepted Answer

A) True 
 B)False

Question 20

On July 1,2017,Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2018. ​
If Falcon's fiscal year ends September 30,2017,an adjustment is needed to

Accepted Answer

A) increase interest revenue by $1,000. 
B) increase notes receivable by $250. 
C) increase interest receivable by $250. 
D) increase notes receivable by $1,000. 
A) increase interest revenue by $1,000. 
B) increase notes receivable by $250. 
C) increase interest receivable by $250. 
D) increase notes receivable by $1,000.

Where can the amounts needed to compute the accounts receivable turnover ratio be found?

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31. Required Identify the maturity date of the note.

On July 1,2017,Falcon Company received a $20,000 promissory note for services from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2018. The effect on Falcon's financial statements on July 1,2017,is which of the following?

If a company uses the allowance method to account for bad debts,when will the company's owners' equity decrease?

During 2017,the accounts receivable turnover ratio for Cordner Company increased from 10 to 14 times per year.Which one of the following statements is the most likely explanation for the change?

The payee of a note recognizes __________ on its income statement.

Accounts receivable are shown on the balance sheet at their net realizable value.

On September 20,Mendes Inc.presents credit card drafts to its bank in the amount of $10,000;the collection charge is 4%. ? Required Analyze the adjustments needed on Mendes' books on September 20,the date of deposit.

When an investor is able to secure significant influence over an investee,the __________ method of accounting is used.

Clarion Corp.invested cash in a six-month certificate of deposit (CD)on November 1,2017.If Clarion Corp.has an accounting period that ends on December 31,2017,when should Clarion recognize interest revenue from the CD?

Baggs buys $100,000 of Vista Company bonds on January 1,2017,at face value.The bonds pay 10% interest semiannually on June 30 and December 31.If Baggs sells the bonds at 99 on July 1,2017,there will be a loss reported on the income statement.

Whether investments are reported as current or noncurrent assets depends on the company's intent.

Router Inc.lends $70,000 on a 120-day,9% promissory note.The total interest that Router will receive at maturity is

What are the effects on the accounting equation when a company makes the adjustment to record bad debts expense using the allowance method?

The maker of a note recognizes a note receivable on the balance sheet and interest revenue on its income statement.

On July 1,2017,Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2018. If Falcon's fiscal year ends September 30,2017,an adjustment is needed to

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 7: Receivables and Investments

Where can the amounts needed to compute the accounts receivable turnover ratio be found?

Cyprus Corp.received a 7%,six-month promissory note with a face amount of $8,000 from Mustafa Company for the sale of merchandise on May 1,2017.Cyprus' accounting year-end is December 31. Required Identify the maturity date of the note.

On July 1,2017,Falcon Company received a $20,000 promissory note for services from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2018. ​ The effect on Falcon's financial statements on July 1,2017,is which of the following?

If a company uses the allowance method to account for bad debts,when will the company's owners' equity decrease?

During 2017,the accounts receivable turnover ratio for Cordner Company increased from 10 to 14 times per year.Which one of the following statements is the most likely explanation for the change?

The payee of a note recognizes __________ on its income statement.

Accounts receivable are shown on the balance sheet at their net realizable value.

On September 20,Mendes Inc.presents credit card drafts to its bank in the amount of $10,000;the collection charge is 4%. ? Required Analyze the adjustments needed on Mendes' books on September 20,the date of deposit.

When an investor is able to secure significant influence over an investee,the __________ method of accounting is used.

Clarion Corp.invested cash in a six-month certificate of deposit (CD)on November 1,2017.If Clarion Corp.has an accounting period that ends on December 31,2017,when should Clarion recognize interest revenue from the CD?

Baggs buys $100,000 of Vista Company bonds on January 1,2017,at face value.The bonds pay 10% interest semiannually on June 30 and December 31.If Baggs sells the bonds at 99 on July 1,2017,there will be a loss reported on the income statement.

Whether investments are reported as current or noncurrent assets depends on the company's intent.

Router Inc.lends $70,000 on a 120-day,9% promissory note.The total interest that Router will receive at maturity is

What are the effects on the accounting equation when a company makes the adjustment to record bad debts expense using the allowance method?

The maker of a note recognizes a note receivable on the balance sheet and interest revenue on its income statement.

On July 1,2017,Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2018. ​ If Falcon's fiscal year ends September 30,2017,an adjustment is needed to

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

On July 1,2017,Falcon Company received a $20,000 promissory note for services from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2018. The effect on Falcon's financial statements on July 1,2017,is which of the following?

On July 1,2017,Falcon Company received a $20,000 promissory note from Jordyn Company.The annual interest rate is 5%.Principal and interest are paid in cash at the maturity date of June 30,2018. If Falcon's fiscal year ends September 30,2017,an adjustment is needed to