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accounting MCQ with A+ answer quiz 10




Question;The face value of a note;refers to the amount;borrowed plus interest received at maturity from the maker.;remaining after a service charge has been deducted.;that can be received if sold to a factor.;that is identified on the formal instrument of credit.;The allowance method of;accounting for uncollectible accounts is required if;the company charges interest on accounts receivable.;the company makes any credit sales.;the company is a retailer.;bad debts are significant in amount.;When a note receivable is;honored, Cash is debited for the note's;maturity value.;net realizable value.;gross realizable value.;face value.;Receivables might be sold;to;take advantage of deep discounts on the cash realizable value of;receivables.;generate cash quickly.;finance companies at an amount greater than cash realizable;value.;lengthen the cash-to-cash operating cycle.;On March 1, 2014, Dick Miles;purchased a suit at Kenny's Fine Apparel Store. The suit cost $600 and Dick;used his Kenny credit card. Kenny charges 2% per month interest if payment on;credit charges is not made within 30 days. On April 30, 2014, Dick had not yet;made his payment. What entry should Kenny make on April 30th?;Accounts Receivable612Interest Revenue12Sales Revenue600;Uncollectible Account;600;Accounts Receivable;600;Accounts Receivable;12;Interest Revenue;12;Bad Debt Expense;588;Interest Expense;12;Accounts Receivable;600;The interest on a $9,000;6%, 90-day note receivable is;$270.;$405.;$540.;$135.;The retailer considers Visa;and MasterCard sales as;cash sales.;promissory sales.;contingent sales.;credit sales.;T'Pol Furniture factors;$900,000 of receivables to Trip Factors, Inc. Trip Factors assesses a 2%;service charge on the amount of receivables sold. T'Pol Furniture factors its;receivables regularly with Trip Factors. What journal entry does T'Pol make;when factoring these receivables?;Cash882,000Service Charge Expense18,000Accounts Receivable900,000;Cash;882,000;Loss on Sale of;Receivables;18,000;Accounts Receivable;900,000;Cash;882,000;Accounts Receivable;882,000;Cash;900,000;Accounts Receivable;882,000;Gain on Sale of;Receivables;18,000;Reck Company receives a;$15,000, 3-month, 8% promissory note from Fey Company in settlement of an open;accounts receivable. What entry will Reck Company make upon receiving the note?;Notes Receivable15,300Accounts Receivable?Fey;Company15,000Interest Revenue300;Notes Receivable;15,000;Interest Receivable;300;Accounts Receivable?Fey;Company;15,000;Interest Revenue;300;Notes Receivable;15,000;Accounts Receivable?Fey;Company;15,000;Notes Receivable;15,300;Accounts Receivable?Fey;Company;15,300


Paper#38156 | Written in 18-Jul-2015

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