Q 8.1: What are notes or accounts receivables that result from sales transactions often called? A : B : C : D : |
D : trade receivables |
Q 8.2: ________ are also called trade receivables. A : B : C : D : |
A : Accounts receivable |
Q 8.3: ________ are three accounting issues associated with accounts receivable. A : B : C : D : |
A : Recognizing, valuing, and disposing |
Q 8.4: The net amount expected to be received in cash from receivables is termed the _____ _____ A) Cash realizable |
A) Cash realizable |
Q 8.5: When would a credit card holder receive lower interest charges? A : B : C : D : |
B : when the card company allows a grace period before interest is accrued |
Q 8.6: Writing off an uncollectible account affects ________ under the allowance method. A : B : C : D : |
C : only balance sheet accounts |
Q 8.7: What is the Bad Debts Expense considered? A : B : C : D : |
D : a necessary risk of doing business on a credit basis |
Q 8.8: The balance of Allowance for Doubtful Accounts prior to making the adjusting entry to record estimated uncollectible accounts _____ a) is |
a) is |
Q 8.9: The entry to recognize the bad debt expense ________ when the allowance method is used. A : B : C : D : |
C : decreases current assets |
Q 8.10: What are the two key parties to a promissory note? A : B : C : D : |
A : maker and the payee |
Q 8.11: Maynard Mills received a 60-day, 5% note for $10,000 on April 5th. Which of the following statements is true? A : B : C : D : |
A : The principal of the note plus interest is due on June 4th. |
Q 8.12: Which of the following statements about a note receivable is true? A : B : C : D : |
A : It can be transferred to another party by endorsement. |
Q 8.13: What happens when a note receivable is dishonored? A : B : C : D : |
A : accounts Receivable is debited if eventual collection is expected |
Q 8.14: When a note receivable is honored, Cash is debited for the note's A : B : C : D : |
A : maturity value. |
Q 8.15: A debit to ________ is entered to record the dishonor of a note receivable assuming the payee expects eventual collection. A : B : C : D : |
B : Accounts Receivable |
Q 8.16: Which of the following statements concerning receivables are true? Select all that apply. |
B : The contingent liability from selling notes receivable should be disclosed. C : Both the gross amount of receivables and the allowance for doubtful accounts should be reported. D : Interest revenue and gain on sale of notes receivable are shown under other revenues and gains. |
Q 8.17: How is the average collection period computed? A : B : C : D : |
A : by dividing 365 days by the accounts receivable turnover ratio |
Q 8.18: The use of credit cards offers advantages to the retailer. Which of the following is NOT an advantage of credit cards to the retailer? A : B : C : D : |
A : the retailer receives more cash from the credit card issuer |
Q 8.19: The retailer ________ when customers use national credit cards to make purchases. A : B : C : D : |
A : is not involved in the collection process |
Q 8.20: When a factor buys accounts receivable, the charge for the factor's commission is recorded as A : B : C : D : |
B : Service Charge Expense. |
Q 8.21: All of the following are principles of managing accounts receivable EXCEPT A : B : C : D : |
B : determining from which vendor credit should be requested. |
Q 8.22: The average collection period for receivables is computed by dividing 365 days by which of the following? A : B : C : D : |
A accounts receivable turnover |
Q 8.23: Another name for trade receivables, which result from sales transactions, is A : B : C : D : |
C : accounts receivable. |
Q 8.24: Two methods of accounting for uncollectible accounts are the direct write-off method and the accrual method. A : B : |
B : False |
Q 8.25: When the allowance method is used, current assets increase when an entry recognizes bad debts. A : B : |
B : False |
Q 8.26: Writing off an uncollectible account affects the balance sheet account and ______ a) does |
b) does not |
The _____ a) gross |
b) net |
Q 8.28: A written promise of amounts to be received as the result of a sales transaction, a note or account receivable is often called a A : B : C : D : |
C : trade receivable. |
Q 8.29: When a company receives an interest-bearing note receivable, it will ______ a) debit |
a) debit |
Q 8.30: What is represented by the following formula? A : B : C : D : |
B the basic formula for computing interest on an interest-bearing note. |
Q 8.31: If a company receives a 60-day, 5% note for $5,000 on September 5, which of the following statement is true? A : B : C : D : |
C : The company should receive the principal of the note plus interest in early November. |
Q 8.32: Short-term |
notes receivable |
Q 8.33: A(n) ________ may be used to settle accounts receivable. A : B : C : D : |
B : promissory note |
Q 8.34: A promissory note may be used to settle accounts receivable. A : B : |
A : True |
Q 8.35: A note receivable can be transferred ________ by endorsement. A : B : C : D : |
A : to another party |
Q 8.36: When calculating interest on a promissory note with the maturity date stated in terms of days, the payer receives _____ a) more |
a) more |
Q 8.37: Being transferrable to another party by endorsement _____ a) is |
a) is |
Q 8.38: When the due date of a note is stated in months, what is the time factor in computing interest? A : B : C : D : |
C : the number of months divided by 12 |
Q 8.39: In a promissory note, the party who will be paid is called the ______ |
I got this question wrong, and I didn't get the answer. Sorry! =( |
An annual rate of interest would be _____ a) the normal b) an unusual |
a) the normal |