| Question 1.1.The person or business to whom the signer of a promissory note promises a future payment is called the_______. (Points : 1) |
payee of the note
drawer of the note
maker of the note
principal of the note |
| Question 2.2.The maturity value of a note receivable is ________. (Points : 1) |
the principal amount of the loan
the interest earned on the principal
the principal amount of the loan plus interest earned
the principle amount of the loan less interest earned |
| Question 3.3.One method of establishing control over collections of accounts receivable is to_______. (Points : 1) |
allow no one but the bookkeeper to handle cash
designate an authorized check signer
establish a bank lock box
set up a petty cash fund |
| Question 4.4.The accounts receivable clerk within a company should not have access to ________. (Points : 1) |
remittance advices
the accounts receivable subsidiary ledger
the general ledger
customer payments |
| Question 5.5.Jones Company has $130,000 in accounts receivables at year end. At the beginning of the year, the balance in the allowance account was $15,000. Jones Company recorded bad debt expense of $5000 during the year based on aged receivables. No accounts were written off during the year. Net realizable value for accounts receivable at year end is ________. (Points : 1) |
$130,000
$115,000
$110,000
$5,000 |
| Question 6.6.Under the direct write-off method, ________. (Points : 1) |
a contra-asset account is used
accounts receivable is always reported at net realizable value
bad debt expense is matched to sales revenue
specific accounts that are deemed uncollectible are written off to bad debt expense |
| Question 7.7.Frankco Company had accounts receivable of $50,000 and net credit sales of $250,000 for May 20X2. There is a balance in the allowance account of $3,500 before adjusting entries are recorded. Historically, 2% of net sales are uncollectible. If Frankco Company uses the percentage-of-sales method for uncollectibles, the balance in the allowance on May 31, 20X2 after adjusting entries are recorded should be ________. (Points : 1) |
$5,000
$8,500
$3,500
$4,500 |
| Question 8.8.If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer’s account? (Points : 1) |
allowance for uncollectible accounts
uncollectible account expense
accounts receivable
interest revenue |
| Question 9.9.If the direct write-off method is used for uncollectible receivables, what account is debited when writing off a customer’s account? (Points : 1) |
accounts receivable
allowance for uncollectible accounts
uncollectible-account expense
sales returns and allowances |
| Question 10.10.A three-month note dated November 12 matures on_______. (Points : 1) |
February 12
February 11
February 13
February 10 |
| Question 11.11.Carolina Supply accepted an eight-month, $16,000 note receivable, with 8% interest, from Reading Corporation on August 1, 20X6. Carolina Supply’s year-end is December 31. The amount of interest to be accrued on December 31, 20X6 is_______. (Points : 1) |
$533
$1,280
$853
$320 |
| Question 12.12.A $12,000, 10%, 90-day note accepted from Daniels & Company was not paid at maturity. The journal entry to recognize this event involves a_______. (Points : 1) |
debit to Accounts Receivable-Daniels & Company for $12,000
debit to Accounts Receivable-Daniels & Company for $11,200
debit to Accounts Receivable-Daniels & Company for $12,300
debit to Allowance for Uncollectible Accounts for $12,300 |
| Question 13.13.The acid-test ratio measures whether an entity ________. (Points : 1) |
quickly collects on accounts receivables
is solvent
could pay its current liabilities if they were to become due immediately
could pay its current liabilities from its current assets |
| Question 14.14.A company has $60,000 in cash, $75,000 in short-term investments, $140,000 in net current receivables, and $145,000 in inventory. The total current liabilities of the firm are $395,000. The acid-test ratio of the company is_______. (Points : 1) |
1.06
0.94
0.91
0.70 |
|
Question 15.15.Which of the following allowance methods generally isNOTacceptable for use when a company follows international financial reporting standards? (Points : 1)
|
percent-of-sales method
aging-of-accounts receivable method
percent-of accounts-receivable method
direct write off method |
|
