Question 1

Describe how accounts receivable arise and how they accounted for, including the use of a subsidiary ledger and an allowance account.

Accepted Answer

Accounts receivable arise from credit sa

Question 2

Bardo Company allows customers to make purchases on credit. The terms of all credit sales are 2/10, n/30, and all sales are recorded at the gross price. Other customers can use a bank credit card where the bank deducts a 4% service charge for credit card sales and credits the bank account of Bardo immediately when credit card receipts are deposited. Bardo uses the perpetual inventory method. Prepare journal entries to record the following selected transactions and events.

Accepted Answer

The answer of Bardo Company allows customers to make purchases...

Question 3

Outdoors Unlimited accepts the Explorer credit card from its customers. Explorer charges a 3.5% service fee and pays Outdoors Unlimited the amount net of Explorer charges once a month. During February, Outdoors Unlimited sold $27,000 worth of merchandise to customers using the Explorer charge card. On February 28, Outdoor Unlimited sent the $27,000 worth of credit card receipts to Explorer. On March 4, Outdoors Unlimited received cash proceeds from Explorer for the February credit sales less the service charge. Prepare the journal entries to record February sales and the March 4 cash receipt.

Accepted Answer

The answer of Outdoors Unlimited accepts the Explorer credit card...

Question 4

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 repaid. 
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 repaid. 
D)  Is the date of the first payment. 
E)  Is the last day of the month.

Question 5

On November 19, Hayes Company receives a $15,000, 60-day, 10% note from a customer as payment on his account. What adjusting entry should be made on the December 31 year-end?

Accepted Answer

A)  Debit Interest Receivable $175; credit Interest Revenue $175. 
B)  Debit Interest Receivable $250; credit Interest Revenue $250. 
C)  Debit Interest Receivable $75; credit Interest Revenue $75. 
D)  Debit Interest Revenue $175; credit Interest Receivable $175. 
E)  Debit Interest Revenue $250; credit Interest Receivable $250. 
A)  Debit Interest Receivable $175; credit Interest Revenue $175. 
B)  Debit Interest Receivable $250; credit Interest Revenue $250. 
C)  Debit Interest Receivable $75; credit Interest Revenue $75. 
D)  Debit Interest Revenue $175; credit Interest Receivable $175. 
E)  Debit Interest Revenue $250; credit Interest Receivable $250.

Question 6

A company had net sales of $500,000 and an average accounts receivable of $80,000. Its accounts receivable turnover equals 6.25.

Accepted Answer

A) True 
 B)False

Question 7

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 8

A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year:
Prepare the adjusting entry to estimate bad debts assuming an aging analysis estimates that 8% of the outstanding accounts receivable will be uncollectible.

Accepted Answer

The answer of A company had the following items and...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The direct write-off method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible.

Accepted Answer

A) True 
 B)False

Question 11

On May 31, a company had a balance in its accounts receivable of $103,895. Prepare journal entries to record the following transactions for June.

Accepted Answer

The answer of On May 31, a company had a...

Question 12

Darby uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 4% of accounts receivable, what is the amount of the bad debts expense adjusting entry?

Accepted Answer

A)  $4,845 
B)  $4,180 
C)  $3,515 
D)  $3,700 
E)  $3,850 
A)  $4,845 
B)  $4,180 
C)  $3,515 
D)  $3,700 
E)  $3,850

Question 13

A supplementary record created to maintain a separate account for each customer is called the ______________________.

Accepted Answer

Accounts r

Question 14

Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Best. On July 10, the entry or entries Newton makes to record the recovery of the bad debt is:

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 15

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 16

A Company had net sales of $23,000 million, and its average account receivables were $5,860 million. Its accounts receivable turnover is 0.92.

Accepted Answer

A) True 
 B)False

Question 17

When the maker of a note honors a note this indicates that the note is:

Accepted Answer

A)  Signed. 
B)  Paid in full. 
C)  Guaranteed. 
D)  Notarized. 
E)  Cosigned. 
A)  Signed. 
B)  Paid in full. 
C)  Guaranteed. 
D)  Notarized. 
E)  Cosigned.

Question 18

A ____________________ is a signed promise to pay a specified amount of money either on demand or at a definite future date.

Accepted Answer

The answer of A ____________________ is a signed promise to...

Question 19

Electron borrowed $75,000 cash from TechCom by signing a promissory note. 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 20

The person who signs a note receivable and promises to pay the principal and interest is the:

Accepted Answer

A)  Maker. 
B)  Payee. 
C)  Holder. 
D)  Receiver. 
E)  Owner. 
A)  Maker. 
B)  Payee. 
C)  Holder. 
D)  Receiver. 
E)  Owner.

Exam 9: Accounting for Receivables

Describe how accounts receivable arise and how they accounted for, including the use of a subsidiary ledger and an allowance account.

The maturity date of a note receivable:

On November 19, Hayes Company receives a $15,000, 60-day, 10% note from a customer as payment on his account. What adjusting entry should be made on the December 31 year-end?

A company had net sales of $500,000 and an average accounts receivable of $80,000. Its accounts receivable turnover equals 6.25.

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

A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: Prepare the adjusting entry to estimate bad debts assuming an aging analysis estimates that 8% of the outstanding accounts receivable will be uncollectible.

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

The direct write-off method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible.

On May 31, a company had a balance in its accounts receivable of $103,895. Prepare journal entries to record the following transactions for June.

A supplementary record created to maintain a separate account for each customer is called the ______________________.

The accounts receivable turnover is calculated by:

A Company had net sales of $23,000 million, and its average account receivables were $5,860 million. Its accounts receivable turnover is 0.92.

When the maker of a note honors a note this indicates that the note is:

A ____________________ is a signed promise to pay a specified amount of money either on demand or at a definite future date.

Electron borrowed $75,000 cash from TechCom by signing a promissory note. TechCom's entry to record the transaction should include a:

The person who signs a note receivable and promises to pay the principal and interest is the:

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

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

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

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