Question 1

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

Accepted Answer

A) The company may need to borrow to acquire operating cash 
B) The company may offer trade discounts to lengthen the collection period 
C) Cash flows from operations may be higher than expected for the company's sales 
D) The company should expand operations with its excess cash 
A) The company may need to borrow to acquire operating cash 
B) The company may offer trade discounts to lengthen the collection period 
C) Cash flows from operations may be higher than expected for the company's sales 
D) The company should expand operations with its excess cash

Question 2

The maker of a note recognizes ____________________ on its income statement.

Accepted Answer

The answer of The maker of a note recognizes ____________________...

Question 3

Agee Corp. The data presented below for Agee Corp.is for the year ended December 31,2014
  See the data for Agee Corp.
If Agee Corp.estimates its bad debts at 1% of net credit sales,what amount will be reported as bad debt expense for 2014?

Accepted Answer

A) $12,400 
B) $13,700 
C) $14,000 
D) $14,300 
A) $12,400 
B) $13,700 
C) $14,000 
D) $14,300

Question 4

The payee of a note recognizes a note payable on the balance sheet and interest expense on its income statement.

Accepted Answer

A) True 
 B)False

Question 5

The equity method of accounting for an investment is used when a company purchases

Accepted Answer

A) More than 20% of the debt securities of a second company. 
B) 100% of the debt securities of a second company. 
C) 15% of the equity securities of a second company. 
D) More than 20% of the equity securities of a second company. 
A) More than 20% of the debt securities of a second company. 
B) 100% of the debt securities of a second company. 
C) 15% of the equity securities of a second company. 
D) More than 20% of the equity securities of a second company.

Question 6

Utah Co.sold merchandise to Big Sky Corp.on December 1,2014,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 amount should Utah recognize as interest revenue on December 31,2014 (if a 360 day year is assumed)?

Accepted Answer

A) $ -0- 
B) $ 60 
C) $120 
D) $180 
A) $ -0- 
B) $ 60 
C) $120 
D) $180

Question 7

A company that holds a promissory note from another company has an asset,called a(n)____________________.

Accepted Answer

The answer of A company that holds a promissory note...

Question 8

Americana Corporation The data below is for Americana Corporation for 2014.
  Refer to the data for Americana Corporation.
What is the balance of Accounts Receivable at December 31,2014?

Accepted Answer

A) $336,000 
B) $448,400 
C) $458,000 
D) $466,000 
A) $336,000 
B) $448,400 
C) $458,000 
D) $466,000

Question 9

Agee Corp. The data presented below for Agee Corp.is for the year ended December 31,2014
  See the data for Agee Corp.
If Agee 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 debt 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

The accounts receivable turnover ratio is computed by dividing net income by average accounts receivable.

Accepted Answer

A) True 
 B)False

Question 11

A note discounted with recourse means that if the original customer fails to pay the bank the total amount due on the maturity date of the note,the company that transferred the note to the bank is liable for the full amount.

Accepted Answer

A) True 
 B)False

Question 12

The equity method of accounting is used if the investor owns at least 20% of the investee and the investor is able to secure influence over the investee.

Accepted Answer

A) True 
 B)False

Question 13

A subsidiary is a separate legal entity that is owned or controlled by another entity.

Accepted Answer

A) True 
 B)False

Question 14

A general ledger account that is supported by a subsidiary ledger is called a(n)____________________.

Accepted Answer

The answer of A general ledger account that is supported...

Question 15

When a note is discounted at a bank,it is normally done with recourse.

Accepted Answer

A) True 
 B)False

Question 16

A company invests excess cash in a certificate of deposit.At the end of an accounting period before the CD matures,the company will recognize interest expense.

Accepted Answer

A) True 
 B)False

Question 17

Satin Corporation The data presented below is for Satin Corporation for the year ended December 31,2014.
  Refer to information for Satin Corporation
If Satin 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 18

When a company discounts a promissory note at the bank,it receives cash at the same time it would if it held the note to maturity.

Accepted Answer

A) True 
 B)False

Question 19

Slammer Sports
The following information is for Slammer Sports at the end of 2014:
   Refer to the data for Slammer Sports.
If the aging approach is used to estimate bad debts,how much bad debts expense will Slammer Sports report for 2014?

Accepted Answer

$7,500 - $

Question 20

Promissory notes are non-negotiable.

Accepted Answer

A) True 
 B)False

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

The maker of a note recognizes ____________________ on its income statement.

Agee Corp. The data presented below for Agee Corp.is for the year ended December 31,2014 See the data for Agee Corp. If Agee Corp.estimates its bad debts at 1% of net credit sales,what amount will be reported as bad debt expense for 2014?

The payee of a note recognizes a note payable on the balance sheet and interest expense on its income statement.

The equity method of accounting for an investment is used when a company purchases

A company that holds a promissory note from another company has an asset,called a(n)____________________.

Americana Corporation The data below is for Americana Corporation for 2014. Refer to the data for Americana Corporation. What is the balance of Accounts Receivable at December 31,2014?

The accounts receivable turnover ratio is computed by dividing net income by average accounts receivable.

A note discounted with recourse means that if the original customer fails to pay the bank the total amount due on the maturity date of the note,the company that transferred the note to the bank is liable for the full amount.

The equity method of accounting is used if the investor owns at least 20% of the investee and the investor is able to secure influence over the investee.

A subsidiary is a separate legal entity that is owned or controlled by another entity.

A general ledger account that is supported by a subsidiary ledger is called a(n)____________________.

When a note is discounted at a bank,it is normally done with recourse.

A company invests excess cash in a certificate of deposit.At the end of an accounting period before the CD matures,the company will recognize interest expense.

When a company discounts a promissory note at the bank,it receives cash at the same time it would if it held the note to maturity.

Slammer Sports The following information is for Slammer Sports at the end of 2014: Refer to the data for Slammer Sports. If the aging approach is used to estimate bad debts,how much bad debts expense will Slammer Sports report for 2014?

Promissory notes are non-negotiable.

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

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Exam 7: Receivables and Investments

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

The maker of a note recognizes ____________________ on its income statement.

Agee Corp. The data presented below for Agee Corp.is for the year ended December 31,2014 See the data for Agee Corp. If Agee Corp.estimates its bad debts at 1% of net credit sales,what amount will be reported as bad debt expense for 2014?

The payee of a note recognizes a note payable on the balance sheet and interest expense on its income statement.

The equity method of accounting for an investment is used when a company purchases

A company that holds a promissory note from another company has an asset,called a(n)____________________.

Americana Corporation The data below is for Americana Corporation for 2014. Refer to the data for Americana Corporation. What is the balance of Accounts Receivable at December 31,2014?

The accounts receivable turnover ratio is computed by dividing net income by average accounts receivable.

A note discounted with recourse means that if the original customer fails to pay the bank the total amount due on the maturity date of the note,the company that transferred the note to the bank is liable for the full amount.

The equity method of accounting is used if the investor owns at least 20% of the investee and the investor is able to secure influence over the investee.

A subsidiary is a separate legal entity that is owned or controlled by another entity.

A general ledger account that is supported by a subsidiary ledger is called a(n)____________________.

When a note is discounted at a bank,it is normally done with recourse.

A company invests excess cash in a certificate of deposit.At the end of an accounting period before the CD matures,the company will recognize interest expense.

When a company discounts a promissory note at the bank,it receives cash at the same time it would if it held the note to maturity.

Slammer Sports The following information is for Slammer Sports at the end of 2014: Refer to the data for Slammer Sports. If the aging approach is used to estimate bad debts,how much bad debts expense will Slammer Sports report for 2014?

Promissory notes are non-negotiable.

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