Question 1

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

Accepted Answer

A) True 
 B)False

Question 2

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Accepted Answer

A)  $40,000 
B)  $40,400 
C)  $43,600 
D)  $44,000 
A)  $40,000 
B)  $40,400 
C)  $43,600 
D)  $44,000

Question 3

Match each of the following terms associated with the best description of that term.

Accepted Answer

The answer of Match each of the following terms associated...

Question 4

When an account receivable that has been written off is subsequently collected, the account receivable is said to be reinstated.

Accepted Answer

A) True 
 B)False

Question 5

An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $6,400. If Allowance for Doubtful Accounts has a $1,300 debit balance, the adjustment to record the bad debt expense for the period will require a

Accepted Answer

A)  debit to Bad Debt Expense for $7,700. 
B)  debit to Bad Debt Expense for $6,400. 
C)  debit to Bad Debt expense for $5,100 
D)  credit to Allowance for Doubtful Accounts for $1,300. 
A)  debit to Bad Debt Expense for $7,700. 
B)  debit to Bad Debt Expense for $6,400. 
C)  debit to Bad Debt expense for $5,100 
D)  credit to Allowance for Doubtful Accounts for $1,300.

Question 6

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

Accepted Answer

A) True 
 B)False

Question 7

The number of days' sales in receivables is an estimate of the length of time the accounts receivables have been outstanding.

Accepted Answer

A) True 
 B)False

Question 8

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

Accepted Answer

A)  displaced 
B)  disallowed 
C)  dishonored 
D)  discounted 
A)  displaced 
B)  disallowed 
C)  dishonored 
D)  discounted

Question 9

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000. What is the net realizable value of the accounts receivable?

Accepted Answer

A)  $51,000 
B)  $289,000 
C)  $340,000 
D)  $391,000 
A)  $51,000 
B)  $289,000 
C)  $340,000 
D)  $391,000

Question 10

Discuss the (1) focus and (2) financial statement emphasis of (a) the percent of sales and (b) the analysis of receivables methods of estimating bad debts.

Accepted Answer

(a) Bad debt expense is the focus of the

Question 11

The balance in the Allowance for Doubtful Accounts account at the end of the year includes the total of all accounts written-off since the beginning year.

Accepted Answer

A) True 
 B)False

Question 12

At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $3,500,000. Bad debt expense is estimated at 1/2 of 1% of net sales.
Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,...

Question 13

Match each of the following terms associated with notes receivable with the best description of that term.

Accepted Answer

The answer of Match each of the following terms associated...

Question 14

You have just received notice that a customer of yours with an Account Receivable balance of $100 has gone bankrupt and will not make any future payments. Assuming you use the allowance method, the entry you make is to

Accepted Answer

A)  debit Bad Debt Expense and credit Allowance for Doubtful Accounts. 
B)  debit Bad Debt Expense and credit Accounts Receivable. 
C)  debit Allowance for Doubtful Accounts and credit Accounts Receivable. 
D)  debit Allowance for Doubtful Accounts and credit Bad Debt Expense 
A)  debit Bad Debt Expense and credit Allowance for Doubtful Accounts. 
B)  debit Bad Debt Expense and credit Accounts Receivable. 
C)  debit Allowance for Doubtful Accounts and credit Accounts Receivable. 
D)  debit Allowance for Doubtful Accounts and credit Bad Debt Expense

Question 15

The two methods of accounting for uncollectible receivables are the allowance method and the

Accepted Answer

A)  equity method 
B)  direct write-off method 
C)  interest method 
D)  cost method 
A)  equity method 
B)  direct write-off method 
C)  interest method 
D)  cost method

Question 16

When a company receives an interest-bearing note receivable, it will

Accepted Answer

A)  debit Notes Receivable for the maturity value of the note. 
B)  debit Notes Receivable for the face value of the note. 
C)  credit Notes Receivable for the maturity value of the note. 
D)  credit Notes Receivable for the face value of the note. 
A)  debit Notes Receivable for the maturity value of the note. 
B)  debit Notes Receivable for the face value of the note. 
C)  credit Notes Receivable for the maturity value of the note. 
D)  credit Notes Receivable for the face value of the note.

Question 17

For the fiscal years 2009 and 2010, Apple Co. reported the following:
   a. Compute the accounts receivable turnover for 2010.
b. Compute the number of days' sales in receivable at the end of 2010.

Accepted Answer

The answer of For the fiscal years 2009 and 2010,...

Question 18

Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables.

Accepted Answer

A) True 
 B)False

Question 19

The journal entry to record a note received from a customer to replace an account is

Accepted Answer

A)  debit Notes Receivable; credit Accounts Receivable 
B)  debit Accounts Receivable; credit Notes Receivable 
C)  debit Cash; credit Notes Receivable 
D)  debit Notes Receivable; credit Notes Payable 
A)  debit Notes Receivable; credit Accounts Receivable 
B)  debit Accounts Receivable; credit Notes Receivable 
C)  debit Cash; credit Notes Receivable 
D)  debit Notes Receivable; credit Notes Payable

Question 20

The party promising to pay a note at maturity is the maker.

Accepted Answer

A) True 
 B)False

Exam 9: Receivables

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Match each of the following terms associated with the best description of that term.

When an account receivable that has been written off is subsequently collected, the account receivable is said to be reinstated.

An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $6,400. If Allowance for Doubtful Accounts has a $1,300 debit balance, the adjustment to record the bad debt expense for the period will require a

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

The number of days' sales in receivables is an estimate of the length of time the accounts receivables have been outstanding.

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000. What is the net realizable value of the accounts receivable?

Discuss the (1) focus and (2) financial statement emphasis of (a) the percent of sales and (b) the analysis of receivables methods of estimating bad debts.

The balance in the Allowance for Doubtful Accounts account at the end of the year includes the total of all accounts written-off since the beginning year.

Match each of the following terms associated with notes receivable with the best description of that term.

You have just received notice that a customer of yours with an Account Receivable balance of $100 has gone bankrupt and will not make any future payments. Assuming you use the allowance method, the entry you make is to

The two methods of accounting for uncollectible receivables are the allowance method and the

When a company receives an interest-bearing note receivable, it will

For the fiscal years 2009 and 2010, Apple Co. reported the following: a. Compute the accounts receivable turnover for 2010. b. Compute the number of days' sales in receivable at the end of 2010.

Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables.

The journal entry to record a note received from a customer to replace an account is

The party promising to pay a note at maturity is the maker.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

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