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ACC 291 WEEK 1 CHAPTER 08 QUIZ

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Question;1.Receivables;are frequently classified as;a.accounts;receivable, company receivables, and other receivables.;b.accounts;receivable, notes receivable, and employee receivables.;c.accounts;receivable and general receivables.;d.accounts;receivable, notes receivable, and other receivables.;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?;a.$700;b.$680;c.$686.;d.None;of the above.;3.Which;of the following approaches for bad debts is best described as a balance sheet;method?;a.Percentage-of-receivables;basis.;b.Direct;write-off method.;c.Percentage-of-sales;basis.;d.Both;a and b.;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 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;a.$5,000.;b.$55,000.;c.$60,000.;d.$65,000.;5.Use;the same information as in question 4, except that Hughes has a debit balance;of $5,000 in its Allowance for Doubtful Accounts before any adjustments are;made at the end of the year. In this situation, the amount of bad debt expense;that should be reported for the year is;a.$5,000;b.$55,000.;c.$60,000.;d.$65,000.;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?;a.$15,000.;b.$27,000.;c.$23,000;d.$31,000.;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?;a.$10,050.;b.$10,500.;c.$22,500.;d.$40,500.;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;a.$685,000.;b.$750,000.;c.$800,000.;d.$735,000.;9.One;of the following statements about promissory notes is incorrect. Theincorrectstatement is;a.The;party making the promise to pay is called the maker.;b.The;party to whom payment is to be made is called the payee.;c.A;promissory note is not a negotiable instrument.;d.A;promissory note is often required from high-risk customers.;10.Which;of the following statements about Visa credit card sales isincorrect?;a.The;credit card issuer makes the credit investigation of the customer.;b.The;retailer is not involved in the collection process.;c.Two;parties are involved.;d.The;retailer receives cash more quickly than it would from individual customers on;account.;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;a.Cash;$48,000 and Service Charge Expense $ 2,000;b.Accounts;Receivable $48,000 and Service Charge Expense $ 2,000;c.Cash;$50,000;d.Accounts;Receivable $50,000;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.;a.Notes;Receivable 1,030 Accounts Receivable 1,030;b.Notes;Receivable 1,000 Accounts Receivable 1,000;c.Notes;Receivable 1,000 Sales 1,000;d.Notes;Receivable 1,020 Accounts Receivable 1,020;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;a.Cash;10,300 Notes Receivable 10,300;b.Cash;10,000 Notes Receivable 10,000;c.Accounts;Receivable 10,300 Notes Receivable 10,000 Interest Revenue 300;d.Cash;10,300 Notes Receivable 10,000 Interest Revenue 300;14.Accounts;and notes receivable are reported in the current assets section of the balance;sheet at;a.cash;(net) realizable value;b.net;book value.;c.lower-of-cost-or-market;value.;d.invoice;cost.;15.;Apollo 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?;a.4.0;and 91.3 days.;b.5.3;and 68.9 days.;c.6.4;and 57 days.;d.8.0;and 45.6 days.

 

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