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Exam 8: Reporting and Analyzing Receivables

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Question 51

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The interest rate for a three-month loan would normally be stated in terms of which of the following rates of interest?

A) Daily
B) Monthly
C) Quarterly
D) Annual

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Question 52

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The percentage of receivables basis of estimating uncollectible accounts ignores the existing balance in the allowance account when the bad debt adjusting entry is recorded.

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Question 53

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The accounts receivable turnover ratio is computed by dividing total sales by the average net receivables during the year.

Accounts receivable are the result of cash and credit sales.

All of the following statements regarding the financial statement presentation of receivables are true except:

Interest on a 6-month, 10 percent, $10,000 note is calculated by multiplying $10,000 * 0.10 *6/12.

Advances to employees are referred to as accounts receivable.

Bad Debt Expense is considered

When an account is written off using the allowance method, accounts receivable

Compute the maturity value as indicated for each of the following notes receivable.

The following information is related to December 31, 2013 balances. During 2014 sales on account were $195,000 and collections on account were $115,000. Also, during 2014 the company wrote off $11,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $72,000. Bad debt expense for 2014 is:

Which one of the following is not an accounting problem (issue) associated with accounts receivable?

An aging of a company's accounts receivable indicates that $4,500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a

On December 31, 2013, when its Allowance for Doubtful Accounts had a credit balance of $1,500, Leeds Company estimates that 6% of its accounts receivable balance of $95,000 will become uncollectible. On March 3, 2014, Leeds Company determined that Megan Jost's account of $950 was uncollectible. On May 15, 2014, Jost paid the amount previously written off. Instructions Prepare the journal entries for December 31, 2013, March 3, 2014 and May 15, 2014.

Great Plains Supply Co. has the following transactions related to notes receivable during the last 2 months of the year. Nov. 1 Loaned $75,000 cash to B. Benson on a 1-year, 8% note. Dec. 11 Sold goods to Roswell, Inc., receiving a $9,000, 90-day, 7% note. 16 Received a $20,000, 6-month, 9% note to settle an open account from M. Ling. 31 Accrued interest revenue on all notes receivable. Instructions Journalize the transactions for Great Plains Supply Co.

Which of the following is a way of disposing of a note receivable?

The sale or transfer of accounts receivable in order to raise funds is called

Three accounting issues associated with accounts receivable are

The average collection period for receivables is computed by dividing 365 days by

The two key parties to a note are the maker and the payee.