FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Receivables

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Firms maintain their own credit cards:

A) In order to speed up receipt of cash from the sale.
B) To earn interest on any balances not paid within a specified period.
C) To grant credit to approved customers.
D) To avoid the fees charged by credit card companies such as VISA.
E) All of these answers are correct.

F) A) and E)
G) C) and E)

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

TechCom receives a 10%, 90-day note for $2,500. The interest on the note is:

A) $36.99.
B) $58.79.
C) $61.64.
D) $50.00.
E) $87.50.

F) B) and D)
G) C) and D)

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

The maturity date of a note receivable:

When a maker of a note honours a note:

During the current year, TechCom concluded that a customer's $4,400 accountreceivable was uncollectible and that the account should be written off. What effect will this write-off have on TechCom's current year net income and balance sheet assumingthe allowance method is used to account for bad debts?

TechCom has sales of $350,000 and estimates that 0.5% of its sales are uncollectible.The amount of bad debt expense is $17,500.

Hasbro had $750 million in accounts receivable and $2,900 million in net sales for the period. Its days' sales uncollected was 29.8.

Define a note receivable and describe how to calculate the interest due on a notereceivable.

Phuong Vo borrowed $5,000 and signed a 3-month promissory note at 10%. The total interest on the note is $125.

The practice of placing dishonoured notes receivable into Accounts Receivable keeps only current notes receivable in the Notes Receivable account.

The accounting principle that requires financial statements to report all contingent liabilities is called:

A promissory note is a written promise to pay a specified amount of money either on demand or at a definite future date.

TechCom received a $1,000, 90-day, 10% note receivable from Danny Outlaw. The journal entry to record the note includes a debit to notes receivable.

All of the following are characteristics of notes receivable except, notes receivable:

The following series of transactions occurred during 2015 and 2016 when Flip Company sold merchandise to Mara Natha. Flip Company's fiscal year end is December 31, and they use the perpetual inventory system. Assume 28 days in the month of February. Prepare Flip Company's journal entries for the above transactions. Round to 2 decimals.

Explain how to record the receipt of a note receivable.

Which of the following entries would be made to write off an uncollectible account receivable using the direct write-off method?

Capilano Company has a July 31 year-end. You have been provided with the following information for the year just ended:- Total sales revenue for the year was $930,000.- Cash sales represent 20% of total sales.- The accounts receivable balance at the beginning of the year was $102,000.- The accounts receivable balance at the end of the year was $162,000.- A review of the outstanding accounts receivable at the end of the year indicates that $8,100 should be written off.- The industry uses the allowance approach based on 4% of accounts receivable or 1% of credit sales.Prepare the necessary adjusting entry to record the bad debts expense assumingthat Capilano Company uses the direct write-off approach.

When is it acceptable to use the direct write-off method to account for uncollectible accounts?

The allowance method complies with the generally accepted accounting principle of matching.