Question 1

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) B) and D)
G) D) and E)

Question 2

A company had total sales of $600,000,net sales of $550,000,and an average accounts receivable of $90,000.Its accounts receivable turnover equals:

Accepted Answer

A)  6.1
B)  63.0
C)  54.8
D)  1.1
E)  6.3F) A) and B)
G) A) and C)

Question 3

MacKenzie Company sold $180 of merchandise to a customer who used a Regional Bank credit card.Regional Bank deducts a 4% service charge for sales on its credit cards.MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment immediately.The journal entry to record this sale transaction would be:

Accepted Answer

A)  Debit Cash of $180 and credit Sales $180.
B)  Debit Cash of $180 and credit Accounts Receivable−Regional $180.
C)  Debit Accounts Receivable−Regional $172.80; debit Credit Card Expense $7.20 and credit Sales $180.
D)  Debit Cash $172.80; debit Credit Card Expense $7.20 and credit Sales $180.
E)  Debit Cash $172.80 and credit Sales $172.80.F) B) and D)
G) A) and B)

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 unadjusted balance in Allowance for Doubtful Accounts is a $500 credit.The estimated amount of bad debts expense is $3,500.

Accepted Answer

A) True 
 B)False

Question 5

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.F) A) and D)
G) B) and C)

Question 6

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the transaction should be:

Accepted Answer

A)  Debit Notes Receivable for $25,000; credit Cash $25,000.
B)  Debit Accounts Receivable $25,000; credit Notes Receivable $25,000.
C)  Debit Cash $25,000; credit Notes Receivable for $25,000.
D)  Debit Notes Payable $25,000; credit Accounts Payable $25,000.
E)  Debit Notes Receivable $25,000; credit Sales $25,000.F) A) and B)
G) All of the above

Question 7

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.F) D) and E)
G) A) and E)

Question 8

The period of a note is the time from the note's (contract)date to its maturity date.

Accepted Answer

A) True 
 B)False

Question 9

Jax Recording Studio purchased $7,800 in electronic components from Music World.Jax signed a 60-day,8% promissory note for $7,800.Music World's journal entry to record the sales transaction is:

Accepted Answer

A)  Debit Accounts Receivable $7,800; credit Sales $7,800
B)  Debit Accounts Receivable $7,904; credit Sales $7,904
C)  Debit Notes Receivable $7,800; credit Sales $7,800
D)  Debit Notes Receivable $7,904; credit Sales $7,904
E)  Debit Notes Receivable $7,800; debit Interest Receivable $104; credit Sales $7,904F) D) and E)
G) A) and B)

Question 10

When the maker of a note is unable or refuses to pay at maturity,the note is said to be ________.

Accepted Answer

The answer of When the maker of a note is...

Question 11

The materiality constraint,as applied to bad debts:

Accepted Answer

A)  Permits the use of the direct write-off method when bad debts expenses are relatively small.
B)  Requires use of the allowance method for bad debts.
C)  Requires use of the direct write-off method.
D)  Requires that bad debts not be written off.
E)  Requires that expenses be reported in the same period as the sales they helped produce.F) B) and D)
G) A) and B)

Question 12

Allowance for Doubtful Accounts is a contra asset; its balance is added to Accounts receivable.

Accepted Answer

A) True 
 B)False

Question 13

What is the maturity date of a 120-day note receivable dated March 5?

Accepted Answer

The answer of What is the maturity date of a...

Question 14

Valley Spa purchased $7,800 in plumbing components from Tubman Co.Valley Spa signed a 60-day,10% promissory note for $7,800.If the note is dishonored,but Tubman intends to continue collection efforts,what is the journal entry to record the dishonored note? (Use 360 days a year.)

Accepted Answer

A)  Debit Accounts Receivable $7,930; debit Bad Debt Expense $130; credit Notes Receivable $8,060.
B)  Debit Bad Debt Expense $7,930; credit Accounts Receivable $7,930.
C)  Debit Bad Debt Expense $7,800; credit Notes Receivable $7,800.
D)  Debit Accounts Receivable−Valley Spa $7,800; credit Notes Receivable $7,800.
E)  Debit Accounts Receivable−Valley Spa $7,930,credit Interest Revenue $130; credit Notes Receivable $7,800.F) A) and B)
G) B) and E)

Question 15

The balance in Accounts Receivable,the control account,must always equal the total of all accounts in the accounts receivable subsidiary ledger.

Accepted Answer

A) True 
 B)False

Question 16

Prepare general journal entries for the following transactions for the current year:

Accepted Answer

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

Question 17

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

Accepted Answer

A)  An increase in the expenses of the current period.
B)  A reduction in current assets.
C)  A reduction in equity.
D)  No effect on the expenses of the current period.
E)  A reduction in current liabilities.F) A) and E)
G) B) and E)

Question 18

The person who signs a note receivable and promises to pay the principal and interest is the:

Accepted Answer

A)  Maker.
B)  Payee.
C)  Holder.
D)  Receiver.
E)  Owner.F) B) and D)
G) B) and C)

Question 19

The accounts receivable turnover is calculated by dividing ________ by ________.

Accepted Answer

net sales;...

Question 20

On July 31,Orwell Co.has $448,800 of accounts receivable.
Required:
1.Prepare journal entries to record the following selected August transactions.The company uses the perpetual inventory system.
2.Also prepare any footnotes to the August 31 financial statements that result from these transactions.
3.Calculate the balance in the Accounts Receivable account as of August 10.

Accepted Answer

1. <img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> 2.Orwell should include th...

Exam 7: Reporting and Analyzing Receivables

When the maker of a note is unable or refuses to pay at maturity,the note is said to be ________.

Correct Answer
verified

What is the maturity date of a 120-day note receivable dated March 5?

Correct Answer
verified

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

Correct Answer
verified

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the transaction should be:

Correct Answer
verified

The accounts receivable turnover is calculated by dividing by .

Correct Answer
verified
net sales;...
View Answer

A company had total sales of $600,000,net sales of $550,000,and an average accounts receivable of $90,000.Its accounts receivable turnover equals:

Correct Answer
verified

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 unadjusted balance in Allowance for Doubtful Accounts is a $500 credit.The estimated amount of bad debts expense is $3,500.

Correct Answer
verified

Correct Answer
verified
1. 2.Orwell should include th...
View Answer

Prepare general journal entries for the following transactions for the current year:

Correct Answer
verified

Valley Spa purchased $7,800 in plumbing components from Tubman Co.Valley Spa signed a 60-day,10% promissory note for $7,800.If the note is dishonored,but Tubman intends to continue collection efforts,what is the journal entry to record the dishonored note? (Use 360 days a year.)

Correct Answer
verified

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

Correct Answer
verified

The materiality constraint,as applied to bad debts:

Correct Answer
verified

The period of a note is the time from the note's (contract)date to its maturity date.

Correct Answer
verified

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

Correct Answer
verified

The balance in Accounts Receivable,the control account,must always equal the total of all accounts in the accounts receivable subsidiary ledger.

Correct Answer
verified

The person who signs a note receivable and promises to pay the principal and interest is the:

Correct Answer
verified

Jax Recording Studio purchased $7,800 in electronic components from Music World.Jax signed a 60-day,8% promissory note for $7,800.Music World's journal entry to record the sales transaction is:

Correct Answer
verified

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

Correct Answer
verified

Allowance for Doubtful Accounts is a contra asset; its balance is added to Accounts receivable.

Correct Answer
verified

Exam 7: Reporting and Analyzing Receivables

When the maker of a note is unable or refuses to pay at maturity,the note is said to be ________.

Correct AnswerverifiedShow Answer

What is the maturity date of a 120-day note receivable dated March 5?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the transaction should be:

Correct AnswerverifiedShow Answer

The accounts receivable turnover is calculated by dividing ________ by ________.

Correct Answerverifiednet sales;...View AnswerShow Answer

A company had total sales of $600,000,net sales of $550,000,and an average accounts receivable of $90,000.Its accounts receivable turnover equals:

Correct AnswerverifiedShow Answer

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 unadjusted balance in Allowance for Doubtful Accounts is a $500 credit.The estimated amount of bad debts expense is $3,500.

Correct AnswerverifiedShow Answer

Correct Answerverified1. 2.Orwell should include th...View AnswerShow Answer

Prepare general journal entries for the following transactions for the current year:

Correct AnswerverifiedShow Answer

Valley Spa purchased $7,800 in plumbing components from Tubman Co.Valley Spa signed a 60-day,10% promissory note for $7,800.If the note is dishonored,but Tubman intends to continue collection efforts,what is the journal entry to record the dishonored note? (Use 360 days a year.)

Correct AnswerverifiedShow Answer

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

Correct AnswerverifiedShow Answer

The materiality constraint,as applied to bad debts:

Correct AnswerverifiedShow Answer

The period of a note is the time from the note's (contract)date to its maturity date.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The balance in Accounts Receivable,the control account,must always equal the total of all accounts in the accounts receivable subsidiary ledger.

Correct AnswerverifiedShow Answer

The person who signs a note receivable and promises to pay the principal and interest is the:

Correct AnswerverifiedShow Answer

Jax Recording Studio purchased $7,800 in electronic components from Music World.Jax signed a 60-day,8% promissory note for $7,800.Music World's journal entry to record the sales transaction is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Allowance for Doubtful Accounts is a contra asset; its balance is added to Accounts receivable.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

The accounts receivable turnover is calculated by dividing by .

Correct Answer
verified
net sales;...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1. 2.Orwell should include th...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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