Question 1

The direct write-off method is used because it is simpler than the allowance method.

Accepted Answer

A) True 
 B)False

Question 2

Define a note receivable and describe how to calculate the interest due on a note receivable.

Accepted Answer

A note receivable is a promissory note.I

Question 3

TechCom ages its accounts receivables to determine the end of the period adjustment for bad debts.At the end of the year,management estimated that $12,750 of the accounts receivable balances would be uncollectible.The Allowance for Doubtful Accounts had a debit balance of $175.What entry should TechCom make at the end of the year,for the estimated bad debts expense?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
E) 
  
A) 
  
B) 
  
C) 
  
D) 
  
E)

Question 4

Mattel had net sales of $4,235 million and accounts receivable of $775 million.To one decimal,Mattel's days' sales uncollected was:

Accepted Answer

A)  298. 
B)  66.8. 
C)  75.4. 
D)  81.8. 
E)  90.2. 
A)  298. 
B)  66.8. 
C)  75.4. 
D)  81.8. 
E)  90.2.

Question 5

Copper Company had a January 1,current year,balance in Allowance for Doubtful Accounts of $7,000 credit.The following events required journal entries during the current year:   What amount of allowance for doubtful accounts should appear in the December 31,current year,balance sheet?

Accepted Answer

$7,000 - $2,700 + $4

Question 6

On October 12,2015,Golf Co.received from one of its customers,Ping Co.,a $25,500,7% 90 day note receivable in granting a time extension on Ping's past due account receivable.Golf Co.has a December 31 year end.Ping Co.honoured the note at maturity.Prepare the entries for the issuance of the note,the end of year interest adjustment and the collection of the note at maturity.

Accepted Answer

The answer of   On October 12,2015,Golf Co.received from...

Question 7

The maturity date of a note receivable:

Accepted Answer

A)  Is the day of the credit sale. 
B)  Is the day the note was signed. 
C)  Is the day the note is due to be paid. 
D)  Is the date of the first payment. 
E)  Is the last day of the month. 
A)  Is the day of the credit sale. 
B)  Is the day the note was signed. 
C)  Is the day the note is due to be paid. 
D)  Is the date of the first payment. 
E)  Is the last day of the month.

Question 8

A dishonoured note receivable is reclassified as an account receivable.

Accepted Answer

A) True 
 B)False

Question 9

The accounts receivable approach uses income statement relationships to estimate bad debts.

Accepted Answer

A) True 
 B)False

Question 10

The days' sales uncollected ratio measures the liquidity of receivables.

Accepted Answer

A) True 
 B)False

Question 11

Accounts receivable turnover is calculated by dividing net sales by average accounts receivable.

Accepted Answer

A) True 
 B)False

Question 12

The formula for computing interest on a note receivable is principal multiplied by interest rate multiplied by time.

Accepted Answer

A) True 
 B)False

Question 13

A promissory note from a customer:

Accepted Answer

A)  Is a cash equivalent. 
B)  Is an account receivable. 
C)  Is a note receivable. 
D)  Is a short-term investment. 
E)  Is a note payable. 
A)  Is a cash equivalent. 
B)  Is an account receivable. 
C)  Is a note receivable. 
D)  Is a short-term investment. 
E)  Is a note payable.

Question 14

A payee of a note usually honours a note and pays it in full.

Accepted Answer

A) True 
 B)False

Question 15

Hasbro had $750 million in accounts receivable and $2,900 million in net sales for the period.Its days' sales uncollected was 29.8.

Accepted Answer

A) True 
 B)False

Question 16

Explain the difference between estimating the amount of uncollectible accounts using the approaches based on percent of sales and accounts receivable.

Accepted Answer

The percent of sales approach emphasizes

Question 17

The matching principle requires:

Accepted Answer

A)  That bad debt expenses be reported in the same accounting period as the sales they helped generate. 
B)  That bad debt expenses be reported in the same accounting period as the sales they helped generate and requires the use of the allowance method of accounting for bad debts. 
C)  The use of the allowance method of accounting for bad debts. 
D)  That bad debt expenses be reported in the same accounting period as the sales they helped generate and requires the use of the direct write-off method for bad debts. 
E)  The use of the direct write-off method for bad debts. 
A)  That bad debt expenses be reported in the same accounting period as the sales they helped generate. 
B)  That bad debt expenses be reported in the same accounting period as the sales they helped generate and requires the use of the allowance method of accounting for bad debts. 
C)  The use of the allowance method of accounting for bad debts. 
D)  That bad debt expenses be reported in the same accounting period as the sales they helped generate and requires the use of the direct write-off method for bad debts. 
E)  The use of the direct write-off method for bad debts.

Question 18

Identify the accounting principle involved in deciding between the allowance method and the direct write-off method.Indicate which principle is associated with each method.

Accepted Answer

The materiality principle is used to jus

Question 19

MixRecording Studios purchased $7,800 in electronic components from TechCom.MixRecording Studios signed a 60-day,10% promissory note for $7,800.TechCom's journal entry to record the transaction should be:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
E) 
  
A) 
  
B) 
  
C) 
  
D) 
  
E)

Question 20

Accounts receivable turnover is calculated by:

Accepted Answer

A)  Dividing net sales by average accounts receivable. 
B)  Dividing net sales by average accounts receivable and multiplying by 365. 
C)  Dividing average accounts receivable by net sales. 
D)  Dividing average accounts receivable by net sales and multiplying by 365. 
E)  Dividing net income by average accounts receivable. 
A)  Dividing net sales by average accounts receivable. 
B)  Dividing net sales by average accounts receivable and multiplying by 365. 
C)  Dividing average accounts receivable by net sales. 
D)  Dividing average accounts receivable by net sales and multiplying by 365. 
E)  Dividing net income by average accounts receivable.

The direct write-off method is used because it is simpler than the allowance method.

Define a note receivable and describe how to calculate the interest due on a note receivable.

Mattel had net sales of $4,235 million and accounts receivable of $775 million.To one decimal,Mattel's days' sales uncollected was:

Copper Company had a January 1,current year,balance in Allowance for Doubtful Accounts of $7,000 credit.The following events required journal entries during the current year: What amount of allowance for doubtful accounts should appear in the December 31,current year,balance sheet?

The maturity date of a note receivable:

A dishonoured note receivable is reclassified as an account receivable.

The accounts receivable approach uses income statement relationships to estimate bad debts.

The days' sales uncollected ratio measures the liquidity of receivables.

Accounts receivable turnover is calculated by dividing net sales by average accounts receivable.

The formula for computing interest on a note receivable is principal multiplied by interest rate multiplied by time.

A promissory note from a customer:

A payee of a note usually honours a note and pays it in full.

Hasbro had $750 million in accounts receivable and $2,900 million in net sales for the period.Its days' sales uncollected was 29.8.

Explain the difference between estimating the amount of uncollectible accounts using the approaches based on percent of sales and accounts receivable.

The matching principle requires:

Identify the accounting principle involved in deciding between the allowance method and the direct write-off method.Indicate which principle is associated with each method.

MixRecording Studios purchased $7,800 in electronic components from TechCom.MixRecording Studios signed a 60-day,10% promissory note for $7,800.TechCom's journal entry to record the transaction should be:

Accounts receivable turnover is calculated by:

Accounting in Business

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Filters

Exam 9: Receivables

The direct write-off method is used because it is simpler than the allowance method.

Define a note receivable and describe how to calculate the interest due on a note receivable.

Mattel had net sales of $4,235 million and accounts receivable of $775 million.To one decimal,Mattel's days' sales uncollected was:

Copper Company had a January 1,current year,balance in Allowance for Doubtful Accounts of $7,000 credit.The following events required journal entries during the current year: What amount of allowance for doubtful accounts should appear in the December 31,current year,balance sheet?

The maturity date of a note receivable:

A dishonoured note receivable is reclassified as an account receivable.

The accounts receivable approach uses income statement relationships to estimate bad debts.

The days' sales uncollected ratio measures the liquidity of receivables.

Accounts receivable turnover is calculated by dividing net sales by average accounts receivable.

The formula for computing interest on a note receivable is principal multiplied by interest rate multiplied by time.

A promissory note from a customer:

A payee of a note usually honours a note and pays it in full.

Hasbro had $750 million in accounts receivable and $2,900 million in net sales for the period.Its days' sales uncollected was 29.8.

Explain the difference between estimating the amount of uncollectible accounts using the approaches based on percent of sales and accounts receivable.

The matching principle requires:

Identify the accounting principle involved in deciding between the allowance method and the direct write-off method.Indicate which principle is associated with each method.

MixRecording Studios purchased $7,800 in electronic components from TechCom.MixRecording Studios signed a 60-day,10% promissory note for $7,800.TechCom's journal entry to record the transaction should be:

Accounts receivable turnover is calculated by:

Accounting in Business

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Internal Control and Cash

Filters