Question 1

As long as a company accurately records total credit sales information,it is not necessary to have separate accounts for specific customers.

Accepted Answer

A) True 
 B)False

Question 2

The expense recognition (matching)principle requires that accrued interest on outstanding notes receivable be recorded at the end of each accounting period.

Accepted Answer

A) True 
 B)False

Question 3

________ refers to the expected proceeds from converting an asset into cash.

Accepted Answer

The answer of ________ refers to the expected proceeds from...

Question 4

Separate accounts receivable information for each customer is important because it reveals all of the following except:

Accepted Answer

A)   How much each customer has purchased on credit.
B)   How much each customer has paid.
C)   How much each customer still owes.
D)   The basis for sending bills to customers.
E)   When the customer intends to pay outstanding balances.F) C) and D)
G) B) and E)

Question 5

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

Accepted Answer

A)   $10,450
B)   $10,900
C)   $10,075
D)   $11,800
E)   $10,300F) B) and D)
G) C) and D)

Question 6

The account receivable turnover measures:

Accepted Answer

A)   How long it takes to sell accounts receivable to a factor.
B)   How often, on average, receivables are received and collected during the period.
C)   The relation of cash sales to credit sales.
D)   How long it takes to sell merchandise inventory.
E)   All of the options are correct.F) None of the above
G) A) and B)

Question 7

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

Accepted Answer

A)   Betterman has the better turnover for both years.
B)   Axle has the better turnover for both years.
C)   Betterman's turnover is improving.
D)   Axle's credit policies are too loose.
E)   Betterman is collecting its receivables more quickly than Axle in both years.F) All of the above
G) C) and D)

Question 8

Under IFRS,the term provision:

Accepted Answer

A)   Refers to expense.
B)   Usually refers to a liability whose amount or timing is uncertain.
C)   Means establishing a provision for bad debts.
D)   Means establishing a contra-asset account.
E)   Means establishing an asset account.F) B) and C)
G) A) and D)

Question 9

The ________ method uses both past and current receivables to estimate the allowance amount,and assumes that the longer an amount is past due,the more likely it is to be uncollectible.

Accepted Answer

aging of a...

Question 10

If a customer owes interest on accounts receivable,Interest Receivable is debited and Accounts Receivable is credited.

Accepted Answer

A) True 
 B)False

Question 11

Prepare general journal entries for the following transactions of Norman Company,assuming they use the allowance method to account for uncollectible accounts.

Accepted Answer

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

Question 12

Gideon Company uses the direct write-off method of accounting for uncollectible accounts.On May 3,the Gideon Company wrote off the $2,000 uncollectible account of its customer,A.Hopkins.On July 10,Gideon received a check for the full amount of $2,000 from Hopkins.On July 10,the entry or entries Gideon makes to record the recovery of the bad debt is:

Accepted Answer

A)     Accounts Receivable-A Hopkins 2,000 Allowance for Doubtful Accounts 2,000 Cash 2,000 Accounts Receivable-A Hopkins 2,000\begin{array} { | l | r | r | } \hline 	ext { Accounts Receivable-A Hopkins } & 2,000 & \\hline 	ext { Allowance for Doubtful Accounts } & & 2,000 \\hline 	ext { Cash } & 2,000 & \\hline 	ext { Accounts Receivable-A Hopkins } & & 2,000 \\hline\end{array} Accounts Receivable-A Hopkins  Allowance for Doubtful Accounts  Cash  Accounts Receivable-A Hopkins ​2,0002,000​2,0002,000​​ 
B)     Cash 2,000 Bad debts expense 2,000\begin{array} { | l | r | r | } \hline 	ext { Cash } & 2,000 & \\hline 	ext { Bad debts expense } & & 2,000 \\hline\end{array} Cash  Bad debts expense ​2,000​2,000​​ 
C)     Accounts Receivable-A Hopkins 2,000 Bad debts expense 2,000 Cash 2,000 Accounts Receivable-A Hopkirs 2,000\begin{array} { | l | r | r | } \hline 	ext { Accounts Receivable-A Hopkins } & 2,000 & \\hline 	ext { Bad debts expense } & & 2,000 \\hline 	ext { Cash } & 2,000 & \\hline 	ext { Accounts Receivable-A Hopkirs } & & 2,000 \\hline\end{array} Accounts Receivable-A Hopkins  Bad debts expense  Cash  Accounts Receivable-A Hopkirs ​2,0002,000​2,0002,000​​ 
D)     Allowance for Doubtful Accounts 2,000 Accounts Receivable-A Hopkinse 2,000 Accounts Receivable-A Hopkins 2,000 Cash 2,000\begin{array} { | l | r | r | } \hline 	ext { Allowance for Doubtful Accounts } & 2,000 & \\hline 	ext { Accounts Receivable-A Hopkinse } & & 2,000 \\hline 	ext { Accounts Receivable-A Hopkins } & 2,000 & \\hline 	ext { Cash } & & 2,000 \\hline\end{array} Allowance for Doubtful Accounts  Accounts Receivable-A Hopkinse  Accounts Receivable-A Hopkins  Cash ​2,0002,000​2,0002,000​​ 
E)     Cash 2,000 Accournts Receivable-A Hopkins 2,000\begin{array} { | l | r | r | } \hline 	ext { Cash } & 2,000 & \\hline 	ext { Accournts Receivable-A Hopkins } & & 2,000 \\hline\end{array} Cash  Accournts Receivable-A Hopkins ​2,000​2,000​​F) B) and E)
G) D) and E)

Question 13

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used,a company should debit ________ and credit accounts receivable.

Accepted Answer

allowance ...

Question 14

On November 1,Orpheum Company accepted a $10,000,90-day,8% note from a customer settle an account.What entry should be made on the November 1 to record the acceptance of the note?

Accepted Answer

A)   Debit Note Receivable $10,000; credit Cash $10,000.
B)   Debit Note Receivable $10,000; credit Accounts Receivable $10,000.
C)   Debit Note Receivable $10,000; credit Sales $10,000.
D)   Debit Note Receivable $10,200; credit Accounts Receivable $10,000; credit Interest Revenue $200.
E)   Debit Sales $10,000; credit Accounts Receivable $10,000.F) None of the above
G) A) and D)

Question 15

On May 31,Cray has $375,800 of accounts receivable.Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $14,250.
1.Prepare journal entries to record the following selected May transactions.The company uses the perpetual inventory system.
2.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 balance sheet.
a.Sold $415,200 of merchandise (that cost $249,000)to customers on credit.
b.Received $465,800 cash in payment of accounts receivable.
c.Wrote off $15,800 of uncollectible accounts receivable.
d.In adjusting the accounts on May 31,its fiscal year-end,the company estimated that 4.0% of accounts receivable will be uncollectible.

Accepted Answer

a.
Calculation: Accounts Receivable $3...

Question 16

Match each of the following terms with the appropriate definitions.
-The expected proceeds from converting an asset into cash.

Accepted Answer

A)  Expense recognition (matching)  principle
B)  Realizable value
C)  Interest
D)  Bad debts
E)  Accounts receivableF) Aging of accounts receivableG) Allowance for doubtful accountsH) Promissory noteI) Payee of a noteJ) Maker of a noteK) A) and F)
L) A) and J)

Question 17

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

Accepted Answer

A) True 
 B)False

Question 18

Jordan Co.uses the allowance method of accounting for uncollectible accounts.Jordan Co.accepted a $5,000,12%,90-day note dated May 16,from Beckam Co.in exchange for its past-due account receivable.Make the necessary general journal entries for Jordan Co.on May 16 and the August 14 maturity date,assuming that the:
a.Note is held until maturity and collected in full at that time.
b.Note is dishonored; the amount of the note and its interest are written off as uncollectible.

Accepted Answer

The answer of Jordan Co.uses the allowance method of accounting...

Question 19

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

Accepted Answer

A) True 
 B)False

Question 20

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

Accepted Answer

July = 31 - 12 = 19 days,Augus...

Exam 7: Accounting for Receivables

The expense recognition (matching)principle requires that accrued interest on outstanding notes receivable be recorded at the end of each accounting period.

Correct Answer
verified

Match each of the following terms with the appropriate definitions. -The expected proceeds from converting an asset into cash.

Correct Answer
verified

________ refers to the expected proceeds from converting an asset into cash.

Correct Answer
verified

Correct Answer
verified

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used,a company should debit ________ and credit accounts receivable.

Correct Answer
verified
allowance ...
View Answer

The account receivable turnover measures:

Correct Answer
verified

The ________ method uses both past and current receivables to estimate the allowance amount,and assumes that the longer an amount is past due,the more likely it is to be uncollectible.

Correct Answer
verified
aging of a...
View Answer

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

Correct Answer
verified

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

Correct Answer
verified

If a customer owes interest on accounts receivable,Interest Receivable is debited and Accounts Receivable is credited.

Correct Answer
verified

As long as a company accurately records total credit sales information,it is not necessary to have separate accounts for specific customers.

Correct Answer
verified

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

Correct Answer
verified

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

Correct Answer
verified
July = 31 - 12 = 19 days,Augus...
View Answer

Prepare general journal entries for the following transactions of Norman Company,assuming they use the allowance method to account for uncollectible accounts.

Correct Answer
verified

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

Correct Answer
verified

On November 1,Orpheum Company accepted a $10,000,90-day,8% note from a customer settle an account.What entry should be made on the November 1 to record the acceptance of the note?

Correct Answer
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Correct Answer
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Separate accounts receivable information for each customer is important because it reveals all of the following except:

Correct Answer
verified

Under IFRS,the term provision:

Correct Answer
verified

Correct Answer
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a.
Calculation: Accounts Receivable $3...
View Answer

Exam 7: Accounting for Receivables

The expense recognition (matching)principle requires that accrued interest on outstanding notes receivable be recorded at the end of each accounting period.

Correct AnswerverifiedShow Answer

Match each of the following terms with the appropriate definitions. -The expected proceeds from converting an asset into cash.

Correct AnswerverifiedShow Answer

________ refers to the expected proceeds from converting an asset into cash.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used,a company should debit ________ and credit accounts receivable.

Correct Answerverifiedallowance ...View AnswerShow Answer

The account receivable turnover measures:

Correct AnswerverifiedShow Answer

The ________ method uses both past and current receivables to estimate the allowance amount,and assumes that the longer an amount is past due,the more likely it is to be uncollectible.

Correct Answerverifiedaging of a...View AnswerShow Answer

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

Correct AnswerverifiedShow Answer

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The maturity value of the note is: (Use 360 days a year.)

Correct AnswerverifiedShow Answer

If a customer owes interest on accounts receivable,Interest Receivable is debited and Accounts Receivable is credited.

Correct AnswerverifiedShow Answer

As long as a company accurately records total credit sales information,it is not necessary to have separate accounts for specific customers.

Correct AnswerverifiedShow Answer

A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.

Correct AnswerverifiedShow Answer

If a 90-day note receivable is dated July 12,what is the maturity date of the note?

Correct AnswerverifiedJuly = 31 - 12 = 19 days,Augus...View AnswerShow Answer

Prepare general journal entries for the following transactions of Norman Company,assuming they use the allowance method to account for uncollectible accounts.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

On November 1,Orpheum Company accepted a $10,000,90-day,8% note from a customer settle an account.What entry should be made on the November 1 to record the acceptance of the note?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Separate accounts receivable information for each customer is important because it reveals all of the following except:

Correct AnswerverifiedShow Answer

Under IFRS,the term provision:

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Calculation: Accounts Receivable $3...View AnswerShow Answer

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allowance ...
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aging of a...
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July = 31 - 12 = 19 days,Augus...
View Answer

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Correct Answer
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a.
Calculation: Accounts Receivable $3...
View Answer