Question 1

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

Accepted Answer

A)  July 9. 
B)  July 10. 
C)  July 11. 
D)  July 12. 
E)  July 13. 
A)  July 9. 
B)  July 10. 
C)  July 11. 
D)  July 12. 
E)  July 13.

Question 2

Installment accounts receivable is another name for aging of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 3

MixRecording Studios purchased $7,800 in electronic components from TechCom. MixRecording Studios signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the amount due on the note?

Accepted Answer

A)  $130 
B)  $7,800 
C)  $7,930 
D)  $8,050 
E)  $8,130 
A)  $130 
B)  $7,800 
C)  $7,930 
D)  $8,050 
E)  $8,130

Question 4

Prepare general journal entries for the following transactions of this company for the current year:

Accepted Answer

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

Question 5

The ________________ method of accounting for bad debts records the loss from an uncollectible account receivable at the time it is determined to be uncollectible (and not before).

Accepted Answer

The answer of The ________________ method of accounting for bad...

Question 6

A company receives a 10%, 90-day note for $1,500. The total interest due on the maturity date is:

Accepted Answer

A)  $50.00 
B)  $150.00. 
C)  $75.00. 
D)  $37.50. 
E)  $87.50. 
A)  $50.00 
B)  $150.00. 
C)  $75.00. 
D)  $37.50. 
E)  $87.50.

Question 7

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $175. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 8

Loma Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.

Accepted Answer

@#IMG-DLM& a. Estimate the balance of the Allowanc

Question 9

The aging method of determining bad debts expense is based on the knowledge that the longer a receivable is past due, the lower the likelihood of collection.

Accepted Answer

A) True 
 B)False

Question 10

Define a note receivable and explain how to calculate the interest due on a short-term note receivable.

Accepted Answer

A note receivable is a promissory note,

Question 11

Crystal Products allows customers to use bank credit cards to charge purchases. The bank used by Crystal Products processes all bank credit cards in exchange for a 3% processing fee. All credit card receipts deposited are credited to the company account on the day of deposit. Assume that on January 18, Crystal Products sold and deposited $19,000 worth of bank credit card receipts. Prepare the general journal entry to record this transaction.

Accepted Answer

The answer of Crystal Products allows customers to use bank...

Question 12

The materiality constraint:

Accepted Answer

A)  States that an amount can be ignored if its effect on financial statements is unimportant to user's business decisions. 
B)  Requires use of the allowance method for bad debts. 
C)  Requires use of the direct write-off method. 
D)  States that bad debts not be written off. 
E)  Requires that expenses be reported in the same period as the sales they helped produce. 
A)  States that an amount can be ignored if its effect on financial statements is unimportant to user's business decisions. 
B)  Requires use of the allowance method for bad debts. 
C)  Requires use of the direct write-off method. 
D)  States that bad debts not be written off. 
E)  Requires that expenses be reported in the same period as the sales they helped produce.

Question 13

Tepsi's accounts receivable turnover was 9.9 for this year and 11.0 for last year. Craig's turnover was 9.3 for this year and 9.3 for last year. These results imply that:

Accepted Answer

A)  Craig has the better turnover for both years. 
B)  Tepsi has the better turnover for both years. 
C)  Craig's turnover is improving. 
D)  Craig's credit policies are too loose. 
E)  Craig's is collecting its receivables more quickly than Tepsi in both years. 
A)  Craig has the better turnover for both years. 
B)  Tepsi has the better turnover for both years. 
C)  Craig's turnover is improving. 
D)  Craig's credit policies are too loose. 
E)  Craig's is collecting its receivables more quickly than Tepsi in both years.

Question 14

A company uses the aging of accounts receivable method to estimate its bad debts expense. On December 31 of the current year an aging analysis of accounts receivable revealed the following:

Accepted Answer

@#IMG-DLM& Required:
a. Calculate the amount of th

Question 15

A promissory note is a written promise to pay a specified amount of money either on demand or at a definite future date.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

What is the accounts receivable turnover ratio? How is it calculated? How is it used to assess financial condition?

Accepted Answer

The accounts receivable turnover ratio i

Question 18

When using the allowance method of accounting for uncollectible accounts, the recovery of a bad debt would be recorded as a debit to Cash and a credit to Bad Debts Expense.

Accepted Answer

A) True 
 B)False

Question 19

The 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.

Question 20

The process of using accounts receivable as security for a loan is known as factoring accounts receivable.

Accepted Answer

A) True 
 B)False

Exam 9: Accounting for Receivables

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

Installment accounts receivable is another name for aging of accounts receivable.

MixRecording Studios purchased $7,800 in electronic components from TechCom. MixRecording Studios signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the amount due on the note?

Prepare general journal entries for the following transactions of this company for the current year:

The ________________ method of accounting for bad debts records the loss from an uncollectible account receivable at the time it is determined to be uncollectible (and not before).

A company receives a 10%, 90-day note for $1,500. The total interest due on the maturity date is:

Loma Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis.

The aging method of determining bad debts expense is based on the knowledge that the longer a receivable is past due, the lower the likelihood of collection.

Define a note receivable and explain how to calculate the interest due on a short-term note receivable.

The materiality constraint:

Tepsi's accounts receivable turnover was 9.9 for this year and 11.0 for last year. Craig's turnover was 9.3 for this year and 9.3 for last year. These results imply that:

A company uses the aging of accounts receivable method to estimate its bad debts expense. On December 31 of the current year an aging analysis of accounts receivable revealed the following:

A promissory note is a written promise to pay a specified amount of money either on demand or at a definite future date.

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

What is the accounts receivable turnover ratio? How is it calculated? How is it used to assess financial condition?

When using the allowance method of accounting for uncollectible accounts, the recovery of a bad debt would be recorded as a debit to Cash and a credit to Bad Debts Expense.

The accounts receivable turnover is calculated by:

The process of using accounts receivable as security for a loan is known as factoring accounts receivable.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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