Question 1

Bad Debts Expense is a contra account that is used to reduce accounts receivable to its net realizable value.

Accepted Answer

A) True 
 B)False

Question 2

Darling Enterprises' comparative balance sheets included accounts receivable of $220,300 at December 31,2013,and $200,900 at December 31,2014.Sales reported on Darling's
2014 income statement amounted to $2,350,000.What is the amount of cash collections
That Darling will report in the Operating Activities category of its 2014 statement of
Cash flows assuming that the direct method is used?

Accepted Answer

A) $2,369,400 
B) $2,350,000 
C) $2,771,200 
D) $2,330,600 
A) $2,369,400 
B) $2,350,000 
C) $2,771,200 
D) $2,330,600

Question 3

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

Accepted Answer

A) $209,000 
B) $225,000 
C) $447,000 
D) $459,000 
A) $209,000 
B) $225,000 
C) $447,000 
D) $459,000

Question 4

The date that a promissory note is due is the ____________________.

Accepted Answer

The answer of The date that a promissory note is...

Question 5

A company is referred to as a parent if it owns

Accepted Answer

A) 33% 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 50% of the equity securities of a second company 
A) 33% 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 50% of the equity securities of a second company

Question 6

Satin Corporation The data presented below is for Satin Corporation for the year ended December 31,2014.
  Refer to the data for Satin Corporation
If Satin estimates its bad debts at 2% of net credit sales,what amount will be reported as bad debt expense for 2014?

Accepted Answer

A) $25,800 
B) $27,000 
C) $28,800 
D) $30,000 
A) $25,800 
B) $27,000 
C) $28,800 
D) $30,000

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

On November 2,2014,Quaint General Store concluded that a customer's $400 account receivable was uncollectible and that the account should be written off.What effect will this write-off have on Quaint's 2014 net income and balance sheet totals assuming the allowance method is used to account for bad debts?

Accepted Answer

A) Decrease in net income;decrease in total assets 
B) Increase in net income;no effect on total assets 
C) No effect on net income;decrease in total assets 
D) No effect on net income;no effect on total assets 
A) Decrease in net income;decrease in total assets 
B) Increase in net income;no effect on total assets 
C) No effect on net income;decrease in total assets 
D) No effect on net income;no effect on total assets

Question 9

The maker 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 10

Sliders Company
Sliders Company sells its merchandise only on credit.The following data is available at December 31,2014:
   Refer to the data for Sliders Company.
Assume the company estimates bad debts using an aging analysis and the aging schedule indicates that $3,600 of the end of the year Accounts Receivable will be uncollectible.

Accepted Answer

A)$3,600 - ($3,200 -

Question 11

The reason the allowance method of recognizing bad debts is used is primarily because it recognizes the maximum amount of write-off in each period.

Accepted Answer

A) True 
 B)False

Question 12

On July 1,2014,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 30,2013. The effect on Falcon's financial statements on July 1,2014 is as follows

Accepted Answer

A) Assets increase;owners' equity increases 
B) Assets decrease and owners' equity decreases 
C) Assets decrease 
D) No net change in assets 
A) Assets increase;owners' equity increases 
B) Assets decrease and owners' equity decreases 
C) Assets decrease 
D) No net change in assets

Question 13

Cushion Sports accepted a credit card account receivable in exchange for $5,000 of services provided to a customer.The credit card company charges a 5% service charge.Recording the transaction in the company's accounting records will have what effect on the accounting equation?

Accepted Answer

A) Increase assets and equity by $4,750 
B) Decrease assets and equity by $250 
C) Increase assets by $5,000 
D) Increase equity by $5,000 
A) Increase assets and equity by $4,750 
B) Decrease assets and equity by $250 
C) Increase assets by $5,000 
D) Increase equity by $5,000

Question 14

Cyprus Corp.received a 7%,6-month promissory note with a face amount of $8,000 from the Mustafa Company for the sale of merchandise on May 1,2014.Cyprus' accounting year-end is December 31.
REQUIRED: Identify the maturity date of the note.

Accepted Answer

The answer of Cyprus Corp.received a 7%,6-month promissory note with...

Question 15

Discounting a note receivable

Accepted Answer

A) Requires using an account called discount on notes receivable 
B) Is the process of lending money 
C) Slows the collection process 
D) Is the process of selling a promissory note 
A) Requires using an account called discount on notes receivable 
B) Is the process of lending money 
C) Slows the collection process 
D) Is the process of selling a promissory note

Question 16

The gross accounts receivable less the allowance for doubtful accounts is known as the _________________________.

Accepted Answer

net realiz

Question 17

What are the effects on the accounting equation when a company writes off a bad debt?

Accepted Answer

A) Assets and stockholders' equity increase 
B) Assets and stockholders' equity decrease 
C) Assets increase and stockholders' equity decreases 
D) No effect on overall assets or equity 
A) Assets and stockholders' equity increase 
B) Assets and stockholders' equity decrease 
C) Assets increase and stockholders' equity decreases 
D) No effect on overall assets or equity

Question 18

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

Accepted Answer

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

Question 19

On February 1,2014,Shine Corp.pays $50,000 for shares of Cloud common stock and another $1,000 in commissions.Assume that Shine sells the Cloud stock on May 20,2014,for $53,000.In this case,Shine recognizes

Accepted Answer

A) An increase in assets and stockholders' equity for $2,000. 
B) An decrease in assets and an increase in stockholders' equity for $2,000. 
C) An increase and decrease in assets by the same amount. 
D) An increase in assets and stockholders' equity for $3,000. 
A) An increase in assets and stockholders' equity for $2,000. 
B) An decrease in assets and an increase in stockholders' equity for $2,000. 
C) An increase and decrease in assets by the same amount. 
D) An increase in assets and stockholders' equity for $3,000.

Question 20

Which one of the following is an investing activity on the statement of cash flows?

Accepted Answer

A) Collection of accounts receivable 
B) Purchase of long-term investments 
C) Receipt of interest 
D) Receipt of dividends 
A) Collection of accounts receivable 
B) Purchase of long-term investments 
C) Receipt of interest 
D) Receipt of dividends

Bad Debts Expense is a contra account that is used to reduce accounts receivable to its net realizable value.

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

The date that a promissory note is due is the ____________________.

A company is referred to as a parent if it owns

Satin Corporation The data presented below is for Satin Corporation for the year ended December 31,2014. Refer to the data for Satin Corporation If Satin estimates its bad debts at 2% of net credit sales,what amount will be reported as bad debt expense for 2014?

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

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

The reason the allowance method of recognizing bad debts is used is primarily because it recognizes the maximum amount of write-off in each period.

On July 1,2014,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 30,2013. The effect on Falcon's financial statements on July 1,2014 is as follows

Cushion Sports accepted a credit card account receivable in exchange for $5,000 of services provided to a customer.The credit card company charges a 5% service charge.Recording the transaction in the company's accounting records will have what effect on the accounting equation?

Cyprus Corp.received a 7%,6-month promissory note with a face amount of $8,000 from the Mustafa Company for the sale of merchandise on May 1,2014.Cyprus' accounting year-end is December 31. REQUIRED: Identify the maturity date of the note.

Discounting a note receivable

The gross accounts receivable less the allowance for doubtful accounts is known as the _________________________.

What are the effects on the accounting equation when a company writes off a bad debt?

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

On February 1,2014,Shine Corp.pays $50,000 for shares of Cloud common stock and another $1,000 in commissions.Assume that Shine sells the Cloud stock on May 20,2014,for $53,000.In this case,Shine recognizes

Which one of the following is an investing activity on the statement of cash flows?

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

Bad Debts Expense is a contra account that is used to reduce accounts receivable to its net realizable value.

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

The date that a promissory note is due is the ____________________.

A company is referred to as a parent if it owns

Satin Corporation The data presented below is for Satin Corporation for the year ended December 31,2014. Refer to the data for Satin Corporation If Satin estimates its bad debts at 2% of net credit sales,what amount will be reported as bad debt expense for 2014?

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

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

The reason the allowance method of recognizing bad debts is used is primarily because it recognizes the maximum amount of write-off in each period.

On July 1,2014,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 30,2013. The effect on Falcon's financial statements on July 1,2014 is as follows

Cushion Sports accepted a credit card account receivable in exchange for $5,000 of services provided to a customer.The credit card company charges a 5% service charge.Recording the transaction in the company's accounting records will have what effect on the accounting equation?

Cyprus Corp.received a 7%,6-month promissory note with a face amount of $8,000 from the Mustafa Company for the sale of merchandise on May 1,2014.Cyprus' accounting year-end is December 31. REQUIRED: Identify the maturity date of the note.

Discounting a note receivable

The gross accounts receivable less the allowance for doubtful accounts is known as the _________________________.

What are the effects on the accounting equation when a company writes off a bad debt?

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

On February 1,2014,Shine Corp.pays $50,000 for shares of Cloud common stock and another $1,000 in commissions.Assume that Shine sells the Cloud stock on May 20,2014,for $53,000.In this case,Shine recognizes

Which one of the following is an investing activity on the statement of cash flows?

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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