Question 1

A company's acceptance of credit cards,like MasterCard,is an example of factoring with recourse.

Accepted Answer

A) True 
 B)False

Question 2

A company that uses the allowance method writes off a specific account as uncollectible,but then the customer pays.The entries made upon receiving payment will

Accepted Answer

A) decrease Cash. 
B) decrease Allowance for Uncollectible Accounts. 
C) increase Allowance for Uncollectible Accounts. 
D) decrease Uncollectible Accounts Expense. 
A) decrease Cash. 
B) decrease Allowance for Uncollectible Accounts. 
C) increase Allowance for Uncollectible Accounts. 
D) decrease Uncollectible Accounts Expense.

Question 3

The Allowance for Uncollectible Accounts is a contra-asset account.

Accepted Answer

A) True 
 B)False

Question 4

Purchasing receivables with recourse is riskier than purchasing them without recourse.

Accepted Answer

A) True 
 B)False

Question 5

Interest on a 180-day,10 percent,$10,000 note receivable is

Accepted Answer

A) $5,001.54. 
B) $576.76. 
C) $493.15. 
D) $2001.26. 
A) $5,001.54. 
B) $576.76. 
C) $493.15. 
D) $2001.26.

Question 6

When using the direct charge-off method,year-end adjustments for uncollectible accounts expense are not made.

Accepted Answer

A) True 
 B)False

Question 7

The maturity value of a 60-day,9 percent,$4,000 note receivable is

Accepted Answer

A) $3,940.66. 
B) $3,641.78. 
C) $4,059.18 
D) $4,360.24. 
A) $3,940.66. 
B) $3,641.78. 
C) $4,059.18 
D) $4,360.24.

Question 8

The higher the receivables turnover,the lower the days' sales uncollected.

Accepted Answer

A) True 
 B)False

Question 9

Interest on a note receivable may be calculated without knowledge of the

Accepted Answer

A) principal amount. 
B) rate of interest. 
C) note's maturity date. 
D) note's duration. 
A) principal amount. 
B) rate of interest. 
C) note's maturity date. 
D) note's duration.

Question 10

Under the allowance method,Uncollectible Accounts Expense is not recorded when an individual customer defaults.

Accepted Answer

A) True 
 B)False

Question 11

The matching rule relates to credit losses by stating that Uncollectible Accounts Expense should be recorded

Accepted Answer

A) in the period of the loss. 
B) for an exact amount. 
C) in the same period as allowed for tax purposes. 
D) in the period of the sale. 
A) in the period of the loss. 
B) for an exact amount. 
C) in the same period as allowed for tax purposes. 
D) in the period of the sale.

Question 12

Under the allowance method,uncollectible accounts must be estimated if the matching rule is to be followed.

Accepted Answer

A) True 
 B)False

Question 13

A company that factors its receivables will have a less favorable receivable turnover than a company that does not factor.

Accepted Answer

A) True 
 B)False

Question 14

It is considered unethical to use the estimate for bad debts to purposely manipulate the amount of net income.

Accepted Answer

A) True 
 B)False

Question 15

If the receivables turnover is 3.1 times,what is the days' sales uncollected?

Accepted Answer

A) 10 days 
B) 85 days 
C) 118 days 
D) cannot be determined with information given 
A) 10 days 
B) 85 days 
C) 118 days 
D) cannot be determined with information given

Question 16

A 60-day note dated December 10 is due on February 10.

Accepted Answer

A) True 
 B)False

Question 17

Each of the following is a characteristic of a promissory note except a(n)

Accepted Answer

A) maturity date that can be determined on the date the note is signed. 
B) payee who has an unconditional right to receive a definite amount on a definite date. 
C) maker who agrees to pay a definite sum subject to certain conditions. 
D) amount to be paid that can be determined on the date the note is signed. 
A) maturity date that can be determined on the date the note is signed. 
B) payee who has an unconditional right to receive a definite amount on a definite date. 
C) maker who agrees to pay a definite sum subject to certain conditions. 
D) amount to be paid that can be determined on the date the note is signed.

Question 18

The matching rule

Accepted Answer

A) results in the recording of a known amount for bad-debt losses. 
B) necessitates the recording of an estimated amount for bad debts. 
C) requires that all bad-debt losses be recorded when an individual customer defaults. 
D) is violated when the allowance method is employed. 
A) results in the recording of a known amount for bad-debt losses. 
B) necessitates the recording of an estimated amount for bad debts. 
C) requires that all bad-debt losses be recorded when an individual customer defaults. 
D) is violated when the allowance method is employed.

Question 19

The allowance method of handling bad debts violates the matching principle.

Accepted Answer

A) True 
 B)False

Question 20

The interest on a three-month,12 percent,$16,200 note receivable is

Accepted Answer

A) $486. 
B) $162. 
C) $324. 
D) $1,944. 
A) $486. 
B) $162. 
C) $324. 
D) $1,944.

A company's acceptance of credit cards,like MasterCard,is an example of factoring with recourse.

A company that uses the allowance method writes off a specific account as uncollectible,but then the customer pays.The entries made upon receiving payment will

The Allowance for Uncollectible Accounts is a contra-asset account.

Purchasing receivables with recourse is riskier than purchasing them without recourse.

Interest on a 180-day,10 percent,$10,000 note receivable is

When using the direct charge-off method,year-end adjustments for uncollectible accounts expense are not made.

The maturity value of a 60-day,9 percent,$4,000 note receivable is

The higher the receivables turnover,the lower the days' sales uncollected.

Interest on a note receivable may be calculated without knowledge of the

Under the allowance method,Uncollectible Accounts Expense is not recorded when an individual customer defaults.

The matching rule relates to credit losses by stating that Uncollectible Accounts Expense should be recorded

Under the allowance method,uncollectible accounts must be estimated if the matching rule is to be followed.

A company that factors its receivables will have a less favorable receivable turnover than a company that does not factor.

It is considered unethical to use the estimate for bad debts to purposely manipulate the amount of net income.

If the receivables turnover is 3.1 times,what is the days' sales uncollected?

A 60-day note dated December 10 is due on February 10.

Each of the following is a characteristic of a promissory note except a(n)

The matching rule

The allowance method of handling bad debts violates the matching principle.

The interest on a three-month,12 percent,$16,200 note receivable is

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

Exam 9: Receivables

A company's acceptance of credit cards,like MasterCard,is an example of factoring with recourse.

A company that uses the allowance method writes off a specific account as uncollectible,but then the customer pays.The entries made upon receiving payment will

The Allowance for Uncollectible Accounts is a contra-asset account.

Purchasing receivables with recourse is riskier than purchasing them without recourse.

Interest on a 180-day,10 percent,$10,000 note receivable is

When using the direct charge-off method,year-end adjustments for uncollectible accounts expense are not made.

The maturity value of a 60-day,9 percent,$4,000 note receivable is

The higher the receivables turnover,the lower the days' sales uncollected.

Interest on a note receivable may be calculated without knowledge of the

Under the allowance method,Uncollectible Accounts Expense is not recorded when an individual customer defaults.

The matching rule relates to credit losses by stating that Uncollectible Accounts Expense should be recorded

Under the allowance method,uncollectible accounts must be estimated if the matching rule is to be followed.

A company that factors its receivables will have a less favorable receivable turnover than a company that does not factor.

It is considered unethical to use the estimate for bad debts to purposely manipulate the amount of net income.

If the receivables turnover is 3.1 times,what is the days' sales uncollected?

A 60-day note dated December 10 is due on February 10.

Each of the following is a characteristic of a promissory note except a(n)

The matching rule

The allowance method of handling bad debts violates the matching principle.

The interest on a three-month,12 percent,$16,200 note receivable is

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