Question 1

Prepare general journal entries for the following transactions of Laurier Company,who use the perpetual inventory system:

Accepted Answer

The answer of Prepare general journal entries for the following...

Question 2

Receivables can be converted to cash by either selling them or using them as security for a loan.

Accepted Answer

A) True 
 B)False

Question 3

It is a bad business practice to accept a note receivable in exchange for an overdue account receivable.

Accepted Answer

A) True 
 B)False

Question 4

TechCom factored $35,000 of its accounts receivable and was charged a 2% factoring fee.The journal entry to record this would include a debit to Cash of $35,000; a debit to Factoring Fee Expense of $700; and a credit to Accounts Receivable of $35,700.

Accepted Answer

A) True 
 B)False

Question 5

The use of an allowance for bad debts is required under the materiality principle.

Accepted Answer

A) True 
 B)False

Question 6

Myrex Corporation purchased $4,000 in parts from TechCom.Myrex signed a 60-day,10% promissory note.TechCom should record the sale with a journal entry debiting ____________________ for $________ and crediting __________________ for $________.

Accepted Answer

Notes rece

Question 7

Stricker Company accepted a $10,000,8%,90-day note dated May 16,from Johnson Corp.as an extension on its past-due account.Prepare the necessary general journal entries in Stricker Company's books on May 16 and August 14 (maturity date),for each of the following independent assumptions:
(a)Note was held until maturity and collected on time.
(b)Note was dishonoured.Amount of note and interest were written off as uncollectible.(Stricker uses the allowance method of accounting for bad debts.)

Accepted Answer

The answer of Stricker Company accepted a $10,000,8%,90-day note dated...

Question 8

The cash to be received at maturity on a $10,000,8%,90-day note receivable is:

Accepted Answer

A)  $197.26. 
B)  $5,126.26. 
C)  $6,187.26. 
D)  $10,197.26. 
E)  $12,297.26. 
A)  $197.26. 
B)  $5,126.26. 
C)  $6,187.26. 
D)  $10,197.26. 
E)  $12,297.26.

Question 9

The person that borrows money and signs a promissory note is called the payee.

Accepted Answer

A) True 
 B)False

Question 10

Electron borrowed $75,000 from TechCom by signing a promissory note and pledging $85,000 in accounts receivable as security.TechCom's entry to record the transaction should include a:

Accepted Answer

A)  Debit to Notes Receivable for $75,000. 
B)  Debit to Accounts Receivable for $75,000. 
C)  Credit to Notes Receivable for $75,000. 
D)  Debit Notes Payable for $75,000. 
E)  Credit to Sales for $75,000. 
A)  Debit to Notes Receivable for $75,000. 
B)  Debit to Accounts Receivable for $75,000. 
C)  Credit to Notes Receivable for $75,000. 
D)  Debit Notes Payable for $75,000. 
E)  Credit to Sales for $75,000.

Question 11

TechCom had net sales of $480,000 and average accounts receivable of $64,000.Its accounts receivable turnover was 7.5.

Accepted Answer

A) True 
 B)False

Question 12

The materiality principle is justification for using the direct-write-off method.

Accepted Answer

A) True 
 B)False

Question 13

Fife Company has the following account balances at December 31 of the current year: Accounts Receivable $42,400 and Allowance for Doubtful Accounts $1,600 (credit balance).Fife uses the aging of accounts receivable to estimate bad debts.The following aging schedule reflects the situation at year-end:   (1)Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31,current year,balance sheet.
(2)Prepare the journal entry to record bad debts expense for the current year.

Accepted Answer

The answer of Fife Company has the following account balances...

Question 14

If the balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

Accepted Answer

A)  No effect on the expenses of the current period. 
B)  A reduction in current assets. 
C)  A reduction in owner's equity. 
D)  An increase in the expenses of the current period. 
E)  A reduction in current liabilities. 
A)  No effect on the expenses of the current period. 
B)  A reduction in current assets. 
C)  A reduction in owner's equity. 
D)  An increase in the expenses of the current period. 
E)  A reduction in current liabilities.

Question 15

On December 31 of the current year,Kellan Company.reported the following:   Prepare any adjusting entries required to record bad debts expense for the current year,assuming Kellan estimates bad debts will be:
(a)About 1.5% of credit sales.
(b)About 5% of accounts receivable.

Accepted Answer

The answer of On December 31 of the current year,Kellan...

Question 16

Explain how to record the receipt of a note receivable.

Accepted Answer

A note is recorded by entering

Question 17

A 90-day note issued on July 10 matures on:

Accepted Answer

A)  October 7. 
B)  October 8. 
C)  October 9. 
D)  October 10. 
E)  October 11. 
A)  October 7. 
B)  October 8. 
C)  October 9. 
D)  October 10. 
E)  October 11.

Question 18

Discuss the purpose of the accounts receivable turnover ratio and explain how it is calculated.

Accepted Answer

The accounts receivable turnover ratio i

Question 19

The days' sales uncollected ratio:

Accepted Answer

A)  Is used to evaluate the liquidity of receivables. 
B)  Is calculated by dividing accounts receivable by sales. 
C)  Measures a company's ability to pay its bills on time. 
D)  Measures a company's debt to income. 
E)  Is calculated by dividing sales by accounts receivable. 
A)  Is used to evaluate the liquidity of receivables. 
B)  Is calculated by dividing accounts receivable by sales. 
C)  Measures a company's ability to pay its bills on time. 
D)  Measures a company's debt to income. 
E)  Is calculated by dividing sales by accounts receivable.

Question 20

The following series of transactions occurred during 2015 and 2016 when Flip Company sold merchandise to Mara Natha.Flip Company's fiscal year end is December 31,and they use the perpetual inventory system..Assume 28 days in the month of February.   Prepare Flip Company's journal entries for the above transactions.Round to 2 decimals.

Accepted Answer

The answer of The following series of transactions occurred during...

Prepare general journal entries for the following transactions of Laurier Company,who use the perpetual inventory system:

Receivables can be converted to cash by either selling them or using them as security for a loan.

It is a bad business practice to accept a note receivable in exchange for an overdue account receivable.

TechCom factored $35,000 of its accounts receivable and was charged a 2% factoring fee.The journal entry to record this would include a debit to Cash of $35,000; a debit to Factoring Fee Expense of $700; and a credit to Accounts Receivable of $35,700.

The use of an allowance for bad debts is required under the materiality principle.

Myrex Corporation purchased $4,000 in parts from TechCom.Myrex signed a 60-day,10% promissory note.TechCom should record the sale with a journal entry debiting __________ for $ and crediting for $.

The cash to be received at maturity on a $10,000,8%,90-day note receivable is:

The person that borrows money and signs a promissory note is called the payee.

Electron borrowed $75,000 from TechCom by signing a promissory note and pledging $85,000 in accounts receivable as security.TechCom's entry to record the transaction should include a:

TechCom had net sales of $480,000 and average accounts receivable of $64,000.Its accounts receivable turnover was 7.5.

The materiality principle is justification for using the direct-write-off method.

If the balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

On December 31 of the current year,Kellan Company.reported the following: Prepare any adjusting entries required to record bad debts expense for the current year,assuming Kellan estimates bad debts will be: (a)About 1.5% of credit sales. (b)About 5% of accounts receivable.

Explain how to record the receipt of a note receivable.

A 90-day note issued on July 10 matures on:

Discuss the purpose of the accounts receivable turnover ratio and explain how it is calculated.

The days' sales uncollected ratio:

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

Prepare general journal entries for the following transactions of Laurier Company,who use the perpetual inventory system:

Receivables can be converted to cash by either selling them or using them as security for a loan.

It is a bad business practice to accept a note receivable in exchange for an overdue account receivable.

TechCom factored $35,000 of its accounts receivable and was charged a 2% factoring fee.The journal entry to record this would include a debit to Cash of $35,000; a debit to Factoring Fee Expense of $700; and a credit to Accounts Receivable of $35,700.

The use of an allowance for bad debts is required under the materiality principle.

Myrex Corporation purchased $4,000 in parts from TechCom.Myrex signed a 60-day,10% promissory note.TechCom should record the sale with a journal entry debiting ____________________ for $________ and crediting __________________ for $________.

The cash to be received at maturity on a $10,000,8%,90-day note receivable is:

The person that borrows money and signs a promissory note is called the payee.

Electron borrowed $75,000 from TechCom by signing a promissory note and pledging $85,000 in accounts receivable as security.TechCom's entry to record the transaction should include a:

TechCom had net sales of $480,000 and average accounts receivable of $64,000.Its accounts receivable turnover was 7.5.

The materiality principle is justification for using the direct-write-off method.

If the balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

On December 31 of the current year,Kellan Company.reported the following: Prepare any adjusting entries required to record bad debts expense for the current year,assuming Kellan estimates bad debts will be: (a)About 1.5% of credit sales. (b)About 5% of accounts receivable.

Explain how to record the receipt of a note receivable.

A 90-day note issued on July 10 matures on:

Discuss the purpose of the accounts receivable turnover ratio and explain how it is calculated.

The days' sales uncollected ratio:

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

Myrex Corporation purchased $4,000 in parts from TechCom.Myrex signed a 60-day,10% promissory note.TechCom should record the sale with a journal entry debiting __________ for $ and crediting for $.