Question 1

Installment accounts receivable is another name for aging of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 2

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1)computing the percent uncollectible from the total accounts receivable or (2)aging accounts receivable.

Accepted Answer

A) True 
 B)False

Question 3

Under IFRS, the term provision:

Accepted Answer

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

Question 4

A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is
$3,500.

Accepted Answer

A) True 
 B)False

Question 5

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4,000. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

Accepted Answer

A)  Debit Notes Receivable $4,000; credit Cash $4,000
B)  Debit Notes Receivable $4,060; credit Sales $4,060
C)  Debit Cash $4,000; debit Interest Receivable $60; credit Sales $4,060
D)  Debit Cash $4,060; credit Notes Receivable $4,060
E)  Debit Cash $4,060; credit Interest Revenue $60; credit Notes Receivable $4,000F) C) and E)
G) None of the above

Question 6

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

Accepted Answer

A)  Percent of accounts receivable method.
B)  Percentage of sales method.
C)  Aging of investments method.
D)  Direct write-off method.
E)  Aging of accounts receivable method.F) All of the above
G) B) and D)

Question 7

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)  7.75
B)  10.00
C)  8.00
D)  .13
E)  .80F) B) and D)
G) B) and C)

Question 8

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

Accepted Answer

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

Question 9

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Accepted Answer

A)  7.1.
B)  9.7.
C)  68.3.
D)  51.7.
E)  37.8.F) B) and E)
G) A) and D)

Exam 9: Accounting for Receivables

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4,000. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

Correct Answer
verified

Installment accounts receivable is another name for aging of accounts receivable.

Correct Answer
verified

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1)computing the percent uncollectible from the total accounts receivable or (2)aging accounts receivable.

Correct Answer
verified

Under IFRS, the term provision:

Correct Answer
verified

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

Correct Answer
verified

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Correct Answer
verified

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

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

A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is $3,500.

Correct Answer
verified

Exam 9: Accounting for Receivables

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4,000. Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)

Correct AnswerverifiedShow Answer

Installment accounts receivable is another name for aging of accounts receivable.

Correct AnswerverifiedShow Answer

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1)computing the percent uncollectible from the total accounts receivable or (2)aging accounts receivable.

Correct AnswerverifiedShow Answer

Under IFRS, the term provision:

Correct AnswerverifiedShow Answer

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

Correct AnswerverifiedShow Answer

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Correct AnswerverifiedShow Answer

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

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

A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is $3,500.

Correct AnswerverifiedShow Answer

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