Question 1

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Accepted Answer

A)  Protesting a note.
B)  Closing a note.
C)  Dishonoring a note.
D)  Discounting a note.
E)  Depreciating a note.

Question 2

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the collection of the note and interest at maturity should be:

Accepted Answer

A)  Debit Cash for $25,000;credit Notes Receivable $25,000.
B)  Debit Cash $25,437.50;credit Interest Revenue $437.50;credit Notes Receivable $25,000.
C)  Debit Cash $25,437.50;credit Notes Receivable for $25,437.50.
D)  Debit Notes Payable $25,000;Debit Interest Expense $1,750;credit Cash $26,750.
E)  Debit Cash $26,750;credit Interest Revenue $1,750,credit Notes Receivable $25,000.

Question 3

A company had net sales of $600,000,total sales of $750,000,and an average accounts receivable of $75,000.Its accounts receivable turnover equals:

Accepted Answer

A)  .13
B)  .80
C)  7.75
D)  8.00
E)  10.00

Question 4

The ________________________ methods of computing uncollectible accounts use balance sheet relations to estimate bad debts-mainly the relation between accounts receivable and the allowance amount.

Accepted Answer

The answer of The ________________________ methods of computing uncollectible accounts...

Question 5

At December 31,Yarrow Company reports the following results for its calendar year from the adjusted trial balance.  a.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 1.1% of credit sales.
b.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be .8% of total sales.
c.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 7.0% of year-end accounts receivable.

Accepted Answer

The answer of At December 31,Yarrow Company reports the following...

Question 6

The quality of receivables refers to:

Accepted Answer

A)  The creditworthiness of sellers.
B)  The speed of collection.
C)  The likelihood of collection without loss.
D)  Sales turnover.
E)  The interest rate. C

Question 7

Felton Corporation purchased $4,000 in merchandise from Marita Co.Felton signed a 60-day,10%,$4,000 promissory note.Marita should record the sale with a journal entry debiting ____________________ for ________ and crediting __________________ for ________.
answers need to appear in this order

Accepted Answer

es receiva...

Question 8

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

Accepted Answer

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

Question 9

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

Accepted Answer

accounts r...

Question 10

Which of the following is not true about the Allowance for Doubtful Accounts?

Accepted Answer

A)  It is a contra asset account.
B)  It is used instead of reducing accounts receivable directly.
C)  It is debited when uncollectible accounts are written off.
D)  It is a liability account.
E)  It is credited when bad debts expense is estimated and recorded. D

Question 11

The _________________________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.

Accepted Answer

The answer of The _________________________ method of computing uncollectible accounts...

Question 12

On July 9,Mifflin Company receives a $8,500,90-day,8% note from customer Payton Summers as payment on account.Compute the amount due at maturity for the note.

Accepted Answer

A)  $8,628
B)  $8,192
C)  $8,613
D)  $8,500
E)  $8,670

Question 13

Converting receivables to cash before they are due is usually done by either (1)_______________________ or (2)________________________________.
answers can appear in any order

Accepted Answer

selling them to a fa...

Question 14

Lemming makes an $18,750,120-day,8% cash loan to Notions Co.on November 2.Lemming's end-of-period adjusting entry on December 31 should be:

Accepted Answer

A)  Debit Cash for $250;credit Notes Receivable $250.
B)  Debit Interest Revenue $500;credit Notes Receivable $500.
C)  Debit Interest Receivable $250;credit Interest Revenue $250.
D)  Debit Interest Receivable $500;credit Interest Revenue $500.
E)  Debit Notes Receivable $500;credit Interest Revenue $500. C

Question 15

A credit sale of $5,275 to a customer would result in which of the following?

Accepted Answer

A)  A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger.
B)  A credit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger.
C)  A debit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger.
D)  A credit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger.
E)  A credit to Sales and a credit to the customer's account in the accounts receivable subsidiary ledger.

Question 16

On November 19,Nicholson Company receives a $15,000,60-day,8% note from a customer as payment on account.What adjusting entry should be made on the December 31 year-end?

Accepted Answer

A)  Debit Interest Receivable $1,200;credit Interest Revenue $1,200.
B)  Debit Interest Receivable $140;credit Interest Revenue $140.
C)  Debit Interest Receivable $200;credit Interest Revenue $200.
D)  Debit Interest Revenue $140;credit Interest Receivable $140.
E)  Debit Interest Revenue $200;credit Interest Receivable $200.

Question 17

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.

Question 18

A company receives a 10%,120-day note for $1,500.The total interest due on the maturity date is:

Accepted Answer

A)  $50.00.
B)  $150.00.
C)  $75.00.
D)  $37.50.
E)  $87.50.

Question 19

A company uses the percent of sales method to determine its bad debts expense.At the end of the current year,the company's unadjusted trial balance reported the following selected amounts:  All sales are made on credit.Based on past experience,the company estimates 0.6% of credit sales to be uncollectible.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Accepted Answer

A)  Debit Bad Debts Expense $2,130;credit Allowance for Doubtful Accounts $2,130.
B)  Debit Bad Debts Expense $2,630;credit Allowance for Doubtful Accounts $2,630.
C)  Debit Bad Debts Expense $4,300;credit Allowance for Doubtful Accounts $4,300.
D)  Debit Bad Debts Expense $4,800;credit Allowance for Doubtful Accounts $4,800.
E)  Debit Bad Debts Expense $5,300;credit Allowance for Doubtful Accounts $5,300.

Question 20

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?

Accepted Answer

A)  Relevance.
B)  Full disclosure.
C)  Evaluation.
D)  Materiality.
E)  Matching.

Exam 9: Accounting for Receivables

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Correct Answer
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Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the collection of the note and interest at maturity should be:

Correct Answer
verified

A company had net sales of $600,000,total sales of $750,000,and an average accounts receivable of $75,000.Its accounts receivable turnover equals:

Correct Answer
verified

The ________________________ methods of computing uncollectible accounts use balance sheet relations to estimate bad debts-mainly the relation between accounts receivable and the allowance amount.

Correct Answer
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Correct Answer
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The quality of receivables refers to:

Correct Answer
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C

Felton Corporation purchased $4,000 in merchandise from Marita Co.Felton signed a 60-day,10%,$4,000 promissory note.Marita should record the sale with a journal entry debiting __________ for and crediting for . answers need to appear in this order

Correct Answer
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es receiva...
View Answer

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

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

Correct Answer
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accounts r...
View Answer

Which of the following is not true about the Allowance for Doubtful Accounts?

Correct Answer
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D

The _________________________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.

Correct Answer
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On July 9,Mifflin Company receives a $8,500,90-day,8% note from customer Payton Summers as payment on account.Compute the amount due at maturity for the note.

Correct Answer
verified

Converting receivables to cash before they are due is usually done by either (1)_ or (2)__________. answers can appear in any order

Correct Answer
verified
selling them to a fa...
View Answer

Lemming makes an $18,750,120-day,8% cash loan to Notions Co.on November 2.Lemming's end-of-period adjusting entry on December 31 should be:

Correct Answer
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C

A credit sale of $5,275 to a customer would result in which of the following?

Correct Answer
verified

On November 19,Nicholson Company receives a $15,000,60-day,8% note from a customer as payment on account.What adjusting entry should be made on the December 31 year-end?

Correct Answer
verified

The account receivable turnover measures:

Correct Answer
verified

A company receives a 10%,120-day note for $1,500.The total interest due on the maturity date is:

Correct Answer
verified

Correct Answer
verified

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?

Correct Answer
verified

Exam 9: Accounting for Receivables

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Correct AnswerverifiedShow Answer

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the collection of the note and interest at maturity should be:

Correct AnswerverifiedShow Answer

A company had net sales of $600,000,total sales of $750,000,and an average accounts receivable of $75,000.Its accounts receivable turnover equals:

Correct AnswerverifiedShow Answer

The ________________________ methods of computing uncollectible accounts use balance sheet relations to estimate bad debts-mainly the relation between accounts receivable and the allowance amount.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The quality of receivables refers to:

Correct AnswerverifiedC

Felton Corporation purchased $4,000 in merchandise from Marita Co.Felton signed a 60-day,10%,$4,000 promissory note.Marita should record the sale with a journal entry debiting ____________________ for ________ and crediting __________________ for ________. answers need to appear in this order

Correct Answerverifiedes receiva...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct Answerverifiedaccounts r...View AnswerShow Answer

Which of the following is not true about the Allowance for Doubtful Accounts?

Correct AnswerverifiedD

The _________________________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.

Correct AnswerverifiedShow Answer

On July 9,Mifflin Company receives a $8,500,90-day,8% note from customer Payton Summers as payment on account.Compute the amount due at maturity for the note.

Correct AnswerverifiedShow Answer

Converting receivables to cash before they are due is usually done by either (1)_______________________ or (2)________________________________. answers can appear in any order

Correct Answerverifiedselling them to a fa...View AnswerShow Answer

Lemming makes an $18,750,120-day,8% cash loan to Notions Co.on November 2.Lemming's end-of-period adjusting entry on December 31 should be:

Correct AnswerverifiedC

A credit sale of $5,275 to a customer would result in which of the following?

Correct AnswerverifiedShow Answer

On November 19,Nicholson Company receives a $15,000,60-day,8% note from a customer as payment on account.What adjusting entry should be made on the December 31 year-end?

Correct AnswerverifiedShow Answer

The account receivable turnover measures:

Correct AnswerverifiedShow Answer

A company receives a 10%,120-day note for $1,500.The total interest due on the maturity date is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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C

Felton Corporation purchased $4,000 in merchandise from Marita Co.Felton signed a 60-day,10%,$4,000 promissory note.Marita should record the sale with a journal entry debiting __________ for and crediting for . answers need to appear in this order

Correct Answer
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es receiva...
View Answer

Correct Answer
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Correct Answer
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accounts r...
View Answer

Correct Answer
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D

Correct Answer
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Correct Answer
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Converting receivables to cash before they are due is usually done by either (1)_ or (2)__________. answers can appear in any order

Correct Answer
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selling them to a fa...
View Answer

Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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