Exam 7: Receivables and Investments

When a company discounts an interest-bearing note at a bank with recourse

What is the impact on the cash flow statement from an increase in short-term notes receivable,assuming the indirect method is used?

Promissory notes are non-negotiable.

Which one of the following statements is true if a company's collection period for accounts receivable is unacceptably long?

The following information was presented on the balance sheet of Gloria Company as of December 31,2017: ? Trade accounts receivable, net of allowance for uncollectibles of \ 100,000 \1 ,600,000 Which one of the following statements is true?

Beatrice Equipment Beatrice Equipment sells merchandise only on credit.For the year ended December 31,2017,the following data are available: Sales \ 2,400,000 Sales returns and allowances 60,000 Accounts Receivable-January 1, 2017 270,000 Allowance for doubtful accounts-January 1, 2017 25,600 Collections during 2017 2,426,300 Accounts written off as uncollectible during 2017 23,700 -Refer to the data for Beatrice Equipment. Assume that Beatrice Equipment estimates bad debts at 1% of net credit sales. A) What amount will Beatrice Equipment record as bad debts expense for 2017 ? B) How much is the net realizable value of accounts receivable reported on Beatrice Equipment's balance sheet at December 31,2017 ?

Cash flows from purchases,sales,and maturities of investments are usually classified as __________ activities.

A high accounts receivable turnover ratio could mean that the company's credit policies may be too stringent.

The amount of money received,or the fair value of the products or services received by the maker when a promissory note is issued,is called the __________.

Mellon Corporation The data presented below are for Mellon Corporation for the year ended December 31,2017: ?? Sales (100\% on credit) \ 1,500,000 Sales returns 60,000 Accounts receivable (December 31, 2017) 250,000 Allowance for doubtful accounts (credit balance) (before adjustment at December 31,2017 3,000 Estimated amount of uncoll ectible accounts based on an aging analysis 31,000 -Refer to the data for Mellon Corporation. ? If Mellon uses the aging of accounts receivable approach to estimate its bad debts,what amount will be reported as bad debts expense for 2017?

Lasiter Corp.reported net credit sales of $2,000,000 and cost of goods sold of $1,400,000 for 2017.On January 1,2017,accounts receivable was $250,000.Amounts owed by customers increased by $20,000 during 2017.Rounding to two decimal places,what is Lasiter's accounts receivable turnover ratio for 2017?

Why are increases in accounts receivable reported as an adjustment to net income in the Operating Activities section of a statement of cash flows?

Assume that Momentum Inc.has total accounts receivable of $250,000 and an associated allowance for doubtful accounts of $10,000 at the end of 2017. ? 1)What is the net realizable value of receivables for Momentum? 2)How should Momentum present this information on its balance sheet?

The accounts receivable turnover ratio is used to evaluate how well a company does in collecting its accounts receivable.

What are the effects on the accounting equation from the purchase of a short-term investment?

What is the impact on the cash flow statement from a decrease in accounts receivable,assuming the indirect method is used?

Which of the following statements is true regarding dividend income?

Under the allowance method of accounting for bad debts,the company estimates the amount of bad debts before those debts actually occur.

An aging schedule typically categorizes the various accounts by the length of time each invoice is outstanding.

The use of the allowance method is an attempt by accountants to match bad debts as an expense with the revenue of the period in which a sale on credit takes place.