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started by anonymous on 16 Aug 14
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    ACC 291 Week 2 Chapter 08, 09 and 10 Practice Quiz

    Question 1

    Receivables are frequently classified as:

    accounts receivable and general receivables.

    accounts receivable, notes receivable, and employee receivables.

    accounts receivable, notes receivable, and other receivables.

    accounts receivable, company receivables, and other receivables.

    Question 2

    Buehler Company on June 15 sells merchandise on account to Chaz Co. for $1,000, terms 2/10, n/30. On June 20, Chaz Co. returns merchandise worth $300 to Buehler Company. On June 24, payment is received from Chaz Co. for the balance due. What is the amount of cash received?

    $700

    $680

    $686

    None of the above

    Question 3

    Which of the following approaches for bad debts is best described as a balance sheet method?

    percentage-of-sales basis

    percentage-of-receivables basis

    Both percentage-of-receivables basis and direct write-off method

    direct write-off method

    Question 4

    Hughes Company has a credit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. Based on the review and aging of its accounts receivable at the end of the year, Hughes estimates that $60,000 of its receivables are uncollectible. The amount of bad debts expense which should be reported for the year is:

    $55,000.

    $65,000.

    $5,000.

    $60,000.

    Question 5

    Hughes Company has a debit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. Based on the review and aging of its accounts receivable at the end of the year, Hughes estimates that $60,000 of its receivables are uncollectible. The amount of bad debts expense which should be reported for the year is:

    $60,000.

    $55,000.

    $65,000.

    $5,000.

    Question 6

    Net sales for the month are $800,000, and bad debts are expected to be 1.5% of net sales. The company uses the percentage-of -sales basis. If the Allowance for Doubtful Accounts has a credit balance of $15,000 before adjustment, what is the balance after adjustment?

    $23,000

    $15,000

    $31,000

    $27,000

    Question 7

    In 2011, Roso Carlson Company had net credit sales of $750,000. On January 1, 2011, Allowance for Doubtful Accounts had a credit balance of $18,000. During 2011, $30,000 of uncollectible accounts receivable were written off. Past experience indicates that 3% of net credit sales become uncollectible. What should be the adjusted balance of Allowance for Doubtful Accounts at December 31, 2011?

    $10,050

    $40,500

    $10,500

    $22,500

    Question 8

    An analysis and aging of the accounts receivable of Prince Company at December 31 reveals the following data.

    Accounts receivable $ 800,000

    Allowance for doubtful accounts per books before adjustment $ 50,000

    Amounts expected to become uncollectible $ 65,000

    The cash realizable value of the accounts receivable at December 31, after adjustment, is:

    $800,000.

    $735,000.

    $750,000.

    $685,000.

    Question 9

    One of the following statements about promissory notes is incorrect. The incorrect statement is:

    A promissory note is not a negotiable instrument.

    The party making the promise to pay is called the maker.

    A promissory note is often required from high-risk customers.

    The party to whom payment is to be made is called the payee.

    Question 10

    Which of the following statements about Visa credit card sales is incorrect?

    Two parties are involved.

    The credit card issuer makes the credit investigation of the customer.

    The retailer is not involved in the collection process.

    The retailer receives cash more quickly than it would from individual customers on account.

    Question 11

    Blinka Retailers accepted $50,000 of Citibank Visa credit card charges for merchandise sold on July 1. Citibank charges 4% for its credit card use. The entry to record this transaction by Blinka Retailers will include a credit to Sales of $50,000 and a debit(s) to:

    Cash $48,000

    and Service Charge Expense $2,000

    Cash $50,000

    Accounts Receivable $50,000

    Accounts Receivable $48,000

    and Service Charge Expense $2,000

    Question 12

    Foti Co. accepts a $1,000, 3-month, 12% promissory note in settlement of an account with Bartelt Co. The entry to record this transaction is as follows.

    Notes Receivable 1,030

    Accounts Receivable 1,030

    Notes Receivable 1,000

    Accounts Receivable 1,000

    Notes Receivable 1,000

    Sales 1,000

    Notes Receivable 1,020

    Accounts Receivable 1,020

    Question 13

    Ginter Co. holds Kolar Inc.'s $10,000, 120-day, 9% note. The entry made by Ginter Co. when the note is collected, assuming no interest has been previously accrued, is:

    Accounts Receivable 10,300

    Notes Receivable 10,000

    Interest Revenue 300

    Cash 10,300

    Notes Receivable 10,000

    Interest Revenue 300

    Cash 10,300

    Notes Receivable 10,300

    Cash 10,000

    Notes Receivable 10,000

    Question 14

    Accounts and notes receivable are reported in the current assets section of the balance sheet at:

    invoice cost.

    cash (net) realizable value.

    net book value.

    ower-of-cost-or-market value.

    Question 15

    Oliveras Company had net credit sales during the year of $800,000 and cost of goods sold of $500,000. The balance in accounts receivable at the beginning of the year was $100,000, and the end of the year it was $150,000. What were the accounts receivable turnover ratio and the average collection period in days?

    8.0 and 45.6 days

    6.4 and 57 days

    4.0 and 91.3 days

    5.3 and 68.9 days

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