Exam 7: Receivables and Investments

Comfort Shoes received a promissory note from a customer on April 1,2017.The face amount of the note is $2,000;the terms are 12 months and 8% annual interest.At the maturity date,the customer pays for the note and interest.Comfort Shoes made the proper adjustment at the end of December for interest.The effect of recognizing the transaction on the maturity date is a(n)

(Multiple Choice)

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Question 21

On August 16,2017,Blenim Corp.purchases 6,000 shares of common stock in Mountain Inc.at a market price of $17 per share.In addition,Blenim pays brokerage fees of $2,000.On October 21,2017,Blenim sells the Mountain stock for $12 per share. ? Required Analyze the adjustments needed on Blenim's books in connection with the investment beginning with the purchase of the common stock on August 16,2017,and the sale on October 21,2017.

(Essay)

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Question 22

The __________ the accounts receivable turnover ratio,the quicker each dollar of accounts receivable can be collected.

(Short Answer)

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Question 23

Utah Co.sold merchandise to Big Sky Corp.on December 1,2017,for $9,000 and accepted a promissory note for payment in the same amount.The note has a term of 90 days and a stated interest rate of 8%.Utah's accounting period ends on December 31. What is the actual maturity date of the note?

(Multiple Choice)

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Question 24

Why do businesses invest in short-term investments?

(Multiple Choice)

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Question 25

Discounting a note receivable

(Multiple Choice)

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Question 26

On February 1,2017,Vermont Corp.pays $50,000 for shares of Stream,Inc.common stock and another $1,000 in commissions. Assume that Vermont sells the Stream stock on May 20,2017,for $53,000.In this case,Vermont recognizes a(n)

(Multiple Choice)

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Question 27

Changes in accounts receivable are reported in the __________ Activities section of a statement of cash flows prepared using the indirect method.

(Short Answer)

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Question 28

The total amount of interest calculated annually on a $7,000 promissory note payable for three years at 12% that is not compounded is

(Multiple Choice)

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Question 29

Verilux Company sold merchandise to Flight Corp.on November 1,2017,for $10,000.Verilux accepted a promissory note from Flight Corp.for $10,000.The note has a term of five months and a stated interest rate of 7%.Verilux's accounting period ends on December 31,2017.What amount should Verilux recognize as interest revenue on the maturity date of the note?

(Multiple Choice)

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Question 30

Securities issued by corporations as a form of ownership in the business,such as common and preferred stock,are called equity securities.

(True/False)

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Question 31

The party to a promissory note that agrees to repay money on the maturity date of the note is called the

(Multiple Choice)

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Question 32

The party that receives the payment due from a note is called the __________.

(Short Answer)

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Question 33

Verilux Company sold merchandise to Flight Corp.on November 1,2017,for $10,000.Verilux accepted a promissory note from Flight Corp.for $10,000.The note has a term of five months and a stated interest rate of 7%.Verilux's accounting period ends on December 31,2017.What amount should Verilux recognize as interest revenue on December 31,2017?

(Multiple Choice)

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(84)

Question 34

If a company uses the allowance method of accounting for bad debts,which one of the following statements is true?

(Multiple Choice)

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Question 35

Which one of the approaches for the allowance method of accounting for bad debts emphasizes the net realizable value of accounts receivable on the balance sheet?

(Multiple Choice)

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Question 36

The direct write-off method estimates the amount of bad debts before they occur.

(True/False)

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Question 37

A(n)__________ categorizes the various accounts receivable amounts by the length of time outstanding.

(Short Answer)

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Question 38

If accounts receivable are turned over faster,this means that fewer days are required to collect receivables.

(True/False)

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Question 39

Wagner's Bookstore acquires a 6%,$12,000 certificate of deposit on September 1.The term of the CD is six months.At that time,all principal and accrued interest will be paid in cash.Indicate the effect on the financial statements at December 31.

(Multiple Choice)

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Question 40

Showing 21 - 40 of 192

The __________ the accounts receivable turnover ratio,the quicker each dollar of accounts receivable can be collected.

Utah Co.sold merchandise to Big Sky Corp.on December 1,2017,for $9,000 and accepted a promissory note for payment in the same amount.The note has a term of 90 days and a stated interest rate of 8%.Utah's accounting period ends on December 31. What is the actual maturity date of the note?

Why do businesses invest in short-term investments?

Discounting a note receivable

On February 1,2017,Vermont Corp.pays $50,000 for shares of Stream,Inc.common stock and another $1,000 in commissions. Assume that Vermont sells the Stream stock on May 20,2017,for $53,000.In this case,Vermont recognizes a(n)

Changes in accounts receivable are reported in the __________ Activities section of a statement of cash flows prepared using the indirect method.

The total amount of interest calculated annually on a $7,000 promissory note payable for three years at 12% that is not compounded is

Securities issued by corporations as a form of ownership in the business,such as common and preferred stock,are called equity securities.

The party to a promissory note that agrees to repay money on the maturity date of the note is called the

The party that receives the payment due from a note is called the __________.

If a company uses the allowance method of accounting for bad debts,which one of the following statements is true?

Which one of the approaches for the allowance method of accounting for bad debts emphasizes the net realizable value of accounts receivable on the balance sheet?

The direct write-off method estimates the amount of bad debts before they occur.

A(n)__________ categorizes the various accounts receivable amounts by the length of time outstanding.

If accounts receivable are turned over faster,this means that fewer days are required to collect receivables.

Wagner's Bookstore acquires a 6%,$12,000 certificate of deposit on September 1.The term of the CD is six months.At that time,all principal and accrued interest will be paid in cash.Indicate the effect on the financial statements at December 31.

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

The __________ the accounts receivable turnover ratio,the quicker each dollar of accounts receivable can be collected.

Utah Co.sold merchandise to Big Sky Corp.on December 1,2017,for $9,000 and accepted a promissory note for payment in the same amount.The note has a term of 90 days and a stated interest rate of 8%.Utah's accounting period ends on December 31. What is the actual maturity date of the note?

Why do businesses invest in short-term investments?

Discounting a note receivable

On February 1,2017,Vermont Corp.pays $50,000 for shares of Stream,Inc.common stock and another $1,000 in commissions. ​ Assume that Vermont sells the Stream stock on May 20,2017,for $53,000.In this case,Vermont recognizes a(n)

Changes in accounts receivable are reported in the __________ Activities section of a statement of cash flows prepared using the indirect method.

The total amount of interest calculated annually on a $7,000 promissory note payable for three years at 12% that is not compounded is

Securities issued by corporations as a form of ownership in the business,such as common and preferred stock,are called equity securities.

The party to a promissory note that agrees to repay money on the maturity date of the note is called the

The party that receives the payment due from a note is called the __________.

If a company uses the allowance method of accounting for bad debts,which one of the following statements is true?

Which one of the approaches for the allowance method of accounting for bad debts emphasizes the net realizable value of accounts receivable on the balance sheet?

The direct write-off method estimates the amount of bad debts before they occur.

A(n)__________ categorizes the various accounts receivable amounts by the length of time outstanding.

If accounts receivable are turned over faster,this means that fewer days are required to collect receivables.

Wagner's Bookstore acquires a 6%,$12,000 certificate of deposit on September 1.The term of the CD is six months.At that time,all principal and accrued interest will be paid in cash.Indicate the effect on the financial statements at December 31.

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 February 1,2017,Vermont Corp.pays $50,000 for shares of Stream,Inc.common stock and another $1,000 in commissions. Assume that Vermont sells the Stream stock on May 20,2017,for $53,000.In this case,Vermont recognizes a(n)