Question 1

Special forms of factoring are called ____________________.

Accepted Answer

The answer of Special forms of factoring are called ____________________....

Question 2

The method of recording bad debts that results in a bad debt expense before the actual default is the ____________________.

Accepted Answer

The answer of The method of recording bad debts that...

Question 3

MATCHING
Select the term that matches each of the following descriptions.
a.Interest
b.Maturity Value
c.Principal
d.Lender
e.Factoring
f.Fraction of year
g.Maturity date
h.Implicit
i.Maker
-The amount borrowed

Accepted Answer

The answer of MATCHING
Select the term that matches each of...

Question 4

Because the allowance method results in better matching, accounting standards require its use rather than the direct write-off method, unless bad debts are immaterial.

Accepted Answer

A) True 
 B)False

Question 5

Match each statement to the item listed below
a.Accounts receivable
e.Notes receivable
b.Aging method
f.Realized
c.Allowance for Doubtful Accounts
g.Securitization
d.Earned
-Money due the company from another business or individual.

Accepted Answer

The answer of Match each statement to the item listed...

Question 6

Affinity Services Group received a 12%, 6-month promissory note with a principal amount of $10,000 from a customer for the sale of merchandise on December 1, 2013.

Accepted Answer

The answer of Affinity Services Group received a 12%, 6-month...

Question 7

Academy Grill Supply
On October 1, 2013, the company received a $50,000 promissory note from a customer. The annual interest rate is 6%. Principal and interest will be collected in cash at the maturity date of September 30, 2013.
-Refer to Absolute Appliances. What is the maturity date of the note?

Accepted Answer

A) December 31, 2013 
B) January 31, 2014 
C) February 28, 2014 
D) March 1, 2014

Question 8

The lender of a note recognizes a note payable on the balance sheet and interest expense on its income statement.

Accepted Answer

A) True 
 B)False

Question 9

MATCHING
Select the term that matches each of the following descriptions.
a.Interest
b.Maturity Value
c.Principal
d.Lender
e.Factoring
f.Fraction of year
g.Maturity date
h.Implicit
i.Maker
-The amount of cash the maker is to pay the payee on the maturity date of the note

Accepted Answer

The answer of MATCHING
Select the term that matches each of...

Question 10

-Refer to AT&U Company. If the company uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2013?

Accepted Answer

A) $25,000 
B) $45,000 
C) $20,000 
D) $49,000

Question 11

The basis of accounting that recognizes revenue when it is realizable and earned is called the ____________________.

Accepted Answer

The answer of The basis of accounting that recognizes revenue...

Question 12

Match each statement to the item listed below
a.Accounts receivable
e.Notes receivable
b.Aging method
f.Realized
c.Allowance for Doubtful Accounts
g.Securitization
d.Earned
-A way to estimate bad debts.

Accepted Answer

The answer of Match each statement to the item listed...

Question 13

If a company estimates its bad debt expense on the basis of a receivables aging, the balance in the Allowance for Doubtful Accounts account will not affect the amount of the end-of-period adjusting entry for bad debts.

Accepted Answer

A) True 
 B)False

Question 14

Which one of the approaches for the allowance procedure emphasizes the net realizable value of accounts receivable on the balance sheet?

Accepted Answer

A) The aging of accounts receivable method 
B) The percentage of net credit sales method 
C) The percentage of accounts written off method 
D) The direct write-off method

Question 15

Which of the following would be correct if a company factored $2,500,000 of receivables with a 2 percent fee?

Accepted Answer

A) $2,450,000 credit to cash 
B) $50,000 debit to factoring fee expense 
C) $2,500,000 debit to accounts receivable. 
D) $50,000 debit to factoring fee receivable.

Question 16

Identify two methods of accelerating cash from sales.

Accepted Answer

The answer of Identify two methods of accelerating cash from...

Question 17

A primary advantage of the allowance method to account for bad debts is that it supports the matching principle.

Accepted Answer

A) True 
 B)False

Question 18

The Allowance for Doubtful Accounts represents:

Accepted Answer

A) Bad debt losses incurred in the current period 
B) The amount of uncollected accounts written off to date 
C) The difference between total sales made on credit and the amount collected from those credit sales 
D) The difference between the recorded value of accounts receivable and the net realizable value of accounts receivable

Question 19

The following information was obtained from the company's records for 2013:
 
-Refer to A Better Mousetrap. What amount should the company recognize as interest revenue on December 31, 2013?

Accepted Answer

A) $ -0- 
B) $ 750 
C) $1,500 
D) $9,000

Question 20

On November 1, 2013, Aero Graphics sold merchandise to a customer and received a 10%, 90-day promissory note with a principal amount of $60,000.

Accepted Answer

The answer of On November 1, 2013, Aero Graphics sold...

Exam 5: Sales and Receivables

Special forms of factoring are called ____________________.

The method of recording bad debts that results in a bad debt expense before the actual default is the ____________________.

MATCHING Select the term that matches each of the following descriptions. a.Interest b.Maturity Value c.Principal d.Lender e.Factoring f.Fraction of year g.Maturity date h.Implicit i.Maker -The amount borrowed

Because the allowance method results in better matching, accounting standards require its use rather than the direct write-off method, unless bad debts are immaterial.

Match each statement to the item listed below a.Accounts receivable e.Notes receivable b.Aging method f.Realized c.Allowance for Doubtful Accounts g.Securitization d.Earned -Money due the company from another business or individual.

Affinity Services Group received a 12%, 6-month promissory note with a principal amount of $10,000 from a customer for the sale of merchandise on December 1, 2013.

Academy Grill Supply On October 1, 2013, the company received a $50,000 promissory note from a customer. The annual interest rate is 6%. Principal and interest will be collected in cash at the maturity date of September 30, 2013. -Refer to Absolute Appliances. What is the maturity date of the note?

The lender of a note recognizes a note payable on the balance sheet and interest expense on its income statement.

MATCHING Select the term that matches each of the following descriptions. a.Interest b.Maturity Value c.Principal d.Lender e.Factoring f.Fraction of year g.Maturity date h.Implicit i.Maker -The amount of cash the maker is to pay the payee on the maturity date of the note

-Refer to AT&U Company. If the company uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2013?

The basis of accounting that recognizes revenue when it is realizable and earned is called the ____________________.

Match each statement to the item listed below a.Accounts receivable e.Notes receivable b.Aging method f.Realized c.Allowance for Doubtful Accounts g.Securitization d.Earned -A way to estimate bad debts.

If a company estimates its bad debt expense on the basis of a receivables aging, the balance in the Allowance for Doubtful Accounts account will not affect the amount of the end-of-period adjusting entry for bad debts.

Which one of the approaches for the allowance procedure emphasizes the net realizable value of accounts receivable on the balance sheet?

Which of the following would be correct if a company factored $2,500,000 of receivables with a 2 percent fee?

Identify two methods of accelerating cash from sales.

A primary advantage of the allowance method to account for bad debts is that it supports the matching principle.

The Allowance for Doubtful Accounts represents:

The following information was obtained from the company's records for 2013: -Refer to A Better Mousetrap. What amount should the company recognize as interest revenue on December 31, 2013?

On November 1, 2013, Aero Graphics sold merchandise to a customer and received a 10%, 90-day promissory note with a principal amount of $60,000.