Question 1

The alternate term for a credit card draft is an invoice.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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 ____________________.

Accepted Answer

The answer of The amount of money received,or the fair...

Question 4

During 2014,the accounts receivable turnover rate for Cordner Company increased from 10 to 14 times per year.Which one of the following statements is the most likely explanation for the change?

Accepted Answer

A) The company's credit department has followed up with customers whose account balances are past due in order to generate quicker collections. 
B) The company has decreased sales to its most credit worthy customers. 
C) The company has increased the amount of time customers have to pay their accounts before they are past due. 
D) The company has extended credit to more risky customers in order to increase sales. 
A) The company's credit department has followed up with customers whose account balances are past due in order to generate quicker collections. 
B) The company has decreased sales to its most credit worthy customers. 
C) The company has increased the amount of time customers have to pay their accounts before they are past due. 
D) The company has extended credit to more risky customers in order to increase sales.

Question 5

Comfort Shoes received a promissory note from a customer on April 1,2014.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

Accepted Answer

A) A decrease to Cash 
B) An increase to Notes Receivable 
C) An increase to Discount on Notes Receivable 
D) A decrease to Notes Receivable 
A) A decrease to Cash 
B) An increase to Notes Receivable 
C) An increase to Discount on Notes Receivable 
D) A decrease to Notes Receivable

Question 6

Beatrice Equipment
Beatrice Equipment sells merchandise only on credit.For the year ended December 31,2014,the following data is available:
   Refer to the data for Beatrice Equipment.
Assume that Beatrice Equipment estimates bad debts at 1% of net credit sales.

Accepted Answer

The answer of Beatrice Equipment
Beatrice Equipment sells merchandise only on...

Question 7

The percentage of net credit sales approach for recognizing bad debts considers any existing balance in Allowance for Doubtful Accounts.

Accepted Answer

A) True 
 B)False

Question 8

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain why or why not.

Accepted Answer

The direct write-off method is not an ac

Question 9

Slammer Sports
The following information is for Slammer Sports at the end of 2014:
   Refer to the data for Slammer Sports.
Determine the effect on Slammer Sports' accounting equation of the year-end adjustment of bad debts using the aging approach.

Accepted Answer

The answer of Slammer Sports
The following information is for Slammer...

Question 10

When one company purchases less than 50% of equity securities in a second company,which of the following statements is true?

Accepted Answer

A) The purchaser is referred to as the parent. 
B) The purchaser is referred to as the subsidiary. 
C) The company whose securities are purchased is the subsidiary. 
D) The company whose securities are purchased is the investee. 
A) The purchaser is referred to as the parent. 
B) The purchaser is referred to as the subsidiary. 
C) The company whose securities are purchased is the subsidiary. 
D) The company whose securities are purchased is the investee.

Question 11

If a company uses the allowance method to account for bad debts,when will the company's owners' equity decrease?

Accepted Answer

A) At the date a customer's account is written off 
B) At the end of the accounting period when an adjusting entry for bad debts is recorded 
C) At the date a customer's account is determined to be uncollectible 
D) When the accounts receivable amount becomes past due 
A) At the date a customer's account is written off 
B) At the end of the accounting period when an adjusting entry for bad debts is recorded 
C) At the date a customer's account is determined to be uncollectible 
D) When the accounts receivable amount becomes past due

Question 12

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

Accepted Answer

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

Question 13

Assuming a company uses the allowance method,the entry to recognize the write-off of the specific uncollectible accounts will act to:

Accepted Answer

A) Increase total assets and total equity 
B) Increase total assets and decrease total equity 
C) Decrease total assets and total equity 
D) Not affect total assets or total equity 
A) Increase total assets and total equity 
B) Increase total assets and decrease total equity 
C) Decrease total assets and total equity 
D) Not affect total assets or total equity

Question 14

Router Inc.lends $70,000 on a 120-day,9% promissory note.The total interest that Router will receive at maturity is

Accepted Answer

A) $6,300 
B) $2,100 
C) $525 
D) $1,890 
A) $6,300 
B) $2,100 
C) $525 
D) $1,890

Question 15

If a company discounts a note at a bank,but still is contingently liable for the maturity value,then the note was discounted with ____________________.

Accepted Answer

The answer of If a company discounts a note at...

Question 16

Rafter.com received a 10%,90-day promissory note with a face amount of $12,000 from Joyce Company,for the sale of merchandise on November 1,2014.

Accepted Answer

The answer of Rafter.com received a 10%,90-day promissory note with...

Question 17

Spirit Corp.reported net sales (all on credit)of $1,600,000 and cost of goods sold of $1,100,000 for 2014.Its beginning balance of Accounts Receivable was $150,000.The accounts receivable balance decreased by $10,000 during 2014.Rounded to two decimal places,what is Spirit's accounts receivable turnover rate for 2014?

Accepted Answer

A) 7.59 
B) 10.32 
C) 10.67 
D) 11.03 
A) 7.59 
B) 10.32 
C) 10.67 
D) 11.03

Question 18

Significant influence of one company over another has been defined by the accounting profession as the ownership of what minimum percent of the second company's stock?

Accepted Answer

A) 30% 
B) 50% 
C) 100% 
D) 20% 
A) 30% 
B) 50% 
C) 100% 
D) 20%

Question 19

If Apple Company had sales during the year of $10,000,000,an average accounts receivable
of $2,000,000,and net income of $500,000,its accounts receivable turnover ratio would be 0.25.

Accepted Answer

A) True 
 B)False

Question 20

Meta Inc.pays $18,000 to buy stock in another company and an additional $350 in commissions.Three months later,Meta sells the stock for $19,000.At the time of sale,Meta will recognize a:

Accepted Answer

A) A $650 loss 
B) A $1,000 gain 
C) A $350 loss 
D) A $650 gain 
A) A $650 loss 
B) A $1,000 gain 
C) A $350 loss 
D) A $650 gain

The alternate term for a credit card draft is an invoice.

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

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 ____________________.

During 2014,the accounts receivable turnover rate for Cordner Company increased from 10 to 14 times per year.Which one of the following statements is the most likely explanation for the change?

Beatrice Equipment Beatrice Equipment sells merchandise only on credit.For the year ended December 31,2014,the following data is available: Refer to the data for Beatrice Equipment. Assume that Beatrice Equipment estimates bad debts at 1% of net credit sales.

The percentage of net credit sales approach for recognizing bad debts considers any existing balance in Allowance for Doubtful Accounts.

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain why or why not.

Slammer Sports The following information is for Slammer Sports at the end of 2014: Refer to the data for Slammer Sports. Determine the effect on Slammer Sports' accounting equation of the year-end adjustment of bad debts using the aging approach.

When one company purchases less than 50% of equity securities in a second company,which of the following statements is true?

If a company uses the allowance method to account for bad debts,when will the company's owners' equity decrease?

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

Assuming a company uses the allowance method,the entry to recognize the write-off of the specific uncollectible accounts will act to:

Router Inc.lends $70,000 on a 120-day,9% promissory note.The total interest that Router will receive at maturity is

If a company discounts a note at a bank,but still is contingently liable for the maturity value,then the note was discounted with ____________________.

Rafter.com received a 10%,90-day promissory note with a face amount of $12,000 from Joyce Company,for the sale of merchandise on November 1,2014.

Significant influence of one company over another has been defined by the accounting profession as the ownership of what minimum percent of the second company's stock?

If Apple Company had sales during the year of $10,000,000,an average accounts receivable of $2,000,000,and net income of $500,000,its accounts receivable turnover ratio would be 0.25.

Meta Inc.pays $18,000 to buy stock in another company and an additional $350 in commissions.Three months later,Meta sells the stock for $19,000.At the time of sale,Meta will recognize a:

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

The alternate term for a credit card draft is an invoice.

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

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 ____________________.

During 2014,the accounts receivable turnover rate for Cordner Company increased from 10 to 14 times per year.Which one of the following statements is the most likely explanation for the change?

Beatrice Equipment Beatrice Equipment sells merchandise only on credit.For the year ended December 31,2014,the following data is available: Refer to the data for Beatrice Equipment. Assume that Beatrice Equipment estimates bad debts at 1% of net credit sales.

The percentage of net credit sales approach for recognizing bad debts considers any existing balance in Allowance for Doubtful Accounts.

Can a company use the direct write-off method rather than the allowance method to account for bad debts expense? Explain why or why not.

Slammer Sports The following information is for Slammer Sports at the end of 2014: Refer to the data for Slammer Sports. Determine the effect on Slammer Sports' accounting equation of the year-end adjustment of bad debts using the aging approach.

When one company purchases less than 50% of equity securities in a second company,which of the following statements is true?

If a company uses the allowance method to account for bad debts,when will the company's owners' equity decrease?

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

Assuming a company uses the allowance method,the entry to recognize the write-off of the specific uncollectible accounts will act to:

Router Inc.lends $70,000 on a 120-day,9% promissory note.The total interest that Router will receive at maturity is

If a company discounts a note at a bank,but still is contingently liable for the maturity value,then the note was discounted with ____________________.

Rafter.com received a 10%,90-day promissory note with a face amount of $12,000 from Joyce Company,for the sale of merchandise on November 1,2014.

Significant influence of one company over another has been defined by the accounting profession as the ownership of what minimum percent of the second company's stock?

If Apple Company had sales during the year of $10,000,000,an average accounts receivable of $2,000,000,and net income of $500,000,its accounts receivable turnover ratio would be 0.25.

Meta Inc.pays $18,000 to buy stock in another company and an additional $350 in commissions.Three months later,Meta sells the stock for $19,000.At the time of sale,Meta will recognize a:

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