Question 1

When the allowance method is used,the write-off of an account receivable results in an expense at the time of write-off.

Accepted Answer

A) True 
 B)False  False

Question 2

Under the allowance method,when a specific account is written off,

Accepted Answer

A) total assets will be unchanged. 
B) total assets will decrease. 
C) net income will decrease. 
D) total assets will increase. 
A) total assets will be unchanged. 
B) total assets will decrease. 
C) net income will decrease. 
D) total assets will increase. A

Question 3

Loans to company employees should be included with accounts receivable on the balance sheet.

Accepted Answer

A) True 
 B)False  False

Question 4

If average accounts receivable is $35,000 and net sales total $100,000,what is the receivables turnover?

Accepted Answer

A) 0.3 times 
B) 0.4 times 
C) 2.9 times 
D) 126 times 
A) 0.3 times 
B) 0.4 times 
C) 2.9 times 
D) 126 times

Question 5

A company has net sales of $50,000 during the year.At year end (before an adjustment is made),Allowance for Uncollectible Accounts has a credit balance of $2,500.If the company estimates that 3 percent of net sales are uncollectible,what is the balance in the allowance account after the year-end adjustment has been made using the percentage of net sales method?

Accepted Answer

A) $1,500 debit balance 
B) $1,500 credit balance 
C) $4,000 credit balance 
D) $1,000 debit balance 
A) $1,500 debit balance 
B) $1,500 credit balance 
C) $4,000 credit balance 
D) $1,000 debit balance

Question 6

A promissory note may be issued for an amount to be determined at a future date.

Accepted Answer

A) True 
 B)False

Question 7

Days' sales uncollected cannot be calculated without first knowing the receivables turnover.

Accepted Answer

A) True 
 B)False

Question 8

Under the direct charge-off method of dealing with uncollectible accounts,

Accepted Answer

A) revenues and expenses are properly matched. 
B) Accounts Receivable is shown on the balance sheet at net realizable value. 
C) Uncollectible Accounts Expense is recorded in the period of the sale. 
D) no Allowance for Uncollectible Accounts exists. 
A) revenues and expenses are properly matched. 
B) Accounts Receivable is shown on the balance sheet at net realizable value. 
C) Uncollectible Accounts Expense is recorded in the period of the sale. 
D) no Allowance for Uncollectible Accounts exists.

Question 9

Following a lenient credit-granting policy will probably result in fewer defaults by customers.

Accepted Answer

A) True 
 B)False

Question 10

The allowance for uncollectible accounts is similar to accumulated depreciation in that it represents the total of all accounts written off over the years.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is true about factoring without recourse?

Accepted Answer

A) The seller of the receivables is liable upon default of the debtor. 
B) The factor's risk is lower than if the factoring were with recourse. 
C) An example is the use of major credit cards. 
D) The fee will be lower than if the factoring were with recourse. 
A) The seller of the receivables is liable upon default of the debtor. 
B) The factor's risk is lower than if the factoring were with recourse. 
C) An example is the use of major credit cards. 
D) The fee will be lower than if the factoring were with recourse.

Question 12

If a promissory note is dishonored,the payee should record interest income.

Accepted Answer

A) True 
 B)False

Question 13

The debtor named in a promissory note is called the payee.

Accepted Answer

A) True 
 B)False

Question 14

How is the account Allowance for Uncollectible Accounts presented in the financial statements,and what purpose does this presentation serve?

Accepted Answer

Allowance for Uncollectible Accounts is

Question 15

Securitization delays the receipt of cash from sales made on credit.

Accepted Answer

A) True 
 B)False

Question 16

At year end,Korkin Design Company has a $900 credit balance in Allowance for Uncollectible Accounts.If an accounts receiving aging method analysis indicates that an estimated $5,700 of year-end receivables are uncollectible,what will be the balance in Allowance for Uncollectible Accounts after the appropriate adjusting entry for uncollectible accounts has been made? Indicate if the balance is a debit or credit.

Accepted Answer

The answer of At year end,Korkin Design Company has a...

Question 17

The general ledger account for Accounts Receivable shows a debit balance of $40,000.The Allowance for Uncollectible Accounts has a credit balance of $2,000.Net sales for the year were $250,000.In the past,3 percent of net sales have proved uncollectible.An aging of accounts receivable accounts results in an estimate of $9,000 of uncollectible accounts receivable.Calculate (1)Uncollectible Accounts Expense and (2)the ending balance of the Allowance for Uncollectible Accounts using (a)the percentage of net sales method and (b)the accounts receivable aging method for both (1)and (2).

Accepted Answer

The answer of The general ledger account for Accounts Receivable...

Question 18

Interest on a six-month,7 percent,$2,000 note is calculated by multiplying $2,000 ´ 7/100 ´ 6/12.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following accounts is classified as a short-term financial asset?

Accepted Answer

A) Office Supplies 
B) Accounts Receivable 
C) Equipment 
D) Prepaid Insurance 
A) Office Supplies 
B) Accounts Receivable 
C) Equipment 
D) Prepaid Insurance

Question 20

Which of the following situations results in a contingent liability?

Accepted Answer

A) Making a credit card sale 
B) Dishonoring a note 
C) Estimating uncollectible accounts expense 
D) Discounting a note 
A) Making a credit card sale 
B) Dishonoring a note 
C) Estimating uncollectible accounts expense 
D) Discounting a note

When the allowance method is used,the write-off of an account receivable results in an expense at the time of write-off.

Under the allowance method,when a specific account is written off,

Loans to company employees should be included with accounts receivable on the balance sheet.

If average accounts receivable is $35,000 and net sales total $100,000,what is the receivables turnover?

A promissory note may be issued for an amount to be determined at a future date.

Days' sales uncollected cannot be calculated without first knowing the receivables turnover.

Under the direct charge-off method of dealing with uncollectible accounts,

Following a lenient credit-granting policy will probably result in fewer defaults by customers.

The allowance for uncollectible accounts is similar to accumulated depreciation in that it represents the total of all accounts written off over the years.

Which of the following statements is true about factoring without recourse?

If a promissory note is dishonored,the payee should record interest income.

The debtor named in a promissory note is called the payee.

How is the account Allowance for Uncollectible Accounts presented in the financial statements,and what purpose does this presentation serve?

Securitization delays the receipt of cash from sales made on credit.

Interest on a six-month,7 percent,$2,000 note is calculated by multiplying $2,000 ´ 7/100 ´ 6/12.

Which of the following accounts is classified as a short-term financial asset?

Which of the following situations results in a contingent liability?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

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Exam 9: Receivables

When the allowance method is used,the write-off of an account receivable results in an expense at the time of write-off.

Under the allowance method,when a specific account is written off,

Loans to company employees should be included with accounts receivable on the balance sheet.

If average accounts receivable is $35,000 and net sales total $100,000,what is the receivables turnover?

A promissory note may be issued for an amount to be determined at a future date.

Days' sales uncollected cannot be calculated without first knowing the receivables turnover.

Under the direct charge-off method of dealing with uncollectible accounts,

Following a lenient credit-granting policy will probably result in fewer defaults by customers.

The allowance for uncollectible accounts is similar to accumulated depreciation in that it represents the total of all accounts written off over the years.

Which of the following statements is true about factoring without recourse?

If a promissory note is dishonored,the payee should record interest income.

The debtor named in a promissory note is called the payee.

How is the account Allowance for Uncollectible Accounts presented in the financial statements,and what purpose does this presentation serve?

Securitization delays the receipt of cash from sales made on credit.

Interest on a six-month,7 percent,$2,000 note is calculated by multiplying $2,000 ´ 7/100 ´ 6/12.

Which of the following accounts is classified as a short-term financial asset?

Which of the following situations results in a contingent liability?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters