The Sale of Receivables by a Business: A Quick Way to Generate Cash for Operating Needs
Question 1
Correct! The sale of receivables by a business can be a quick way to generate cash for operating needs.
The sale of receivables by a business
can be a quick way to generate cash for operating needs.
Question 2
Correct! April 30 –13 = 17 days remaining in April + 31 days in May + 12 days in June = a maturity date of June 12.
A 60-day note receivable dated April 13 has a maturity date of
June 12.
Question 3
Correct! A company receiving an interest bearing note will debit the Notes Receivable account for the face value of the note.
A company that receives an interest bearing note receivable will
debit Notes Receivable for the face value of the note.
Question 4
Correct! When a note receivable is dishonored, Accounts Receivable is debited for the maturity value of the note, and Notes Receivable and Interest Revenue are credited.
When a note receivable is dishonored,
accounts receivable is debited if eventual collection is expected.
Question 5
Correct! All of the options are issues associated with accounts receivable except analyzing accounts receivable (“Accounts Receivables”).
Accounting issues associated with accounts receivable include all of the following except:
analyzing accounts receivable.
Question 6
Correct! Companies report accounts receivable at their cash (net) realizable value on the balance sheet (“Allowance Method for Uncollectible Accounts”).
Companies report accounts receivable on the balance sheet at:
cash (net) realizable value.
Question 7
Correct! The percentage-of-sales basis of estimating uncollectibles results in a better matching of expenses with revenues-an income statement viewpoint (“Bases Used for Allowance Method”).
The percentage-of-sales basis of estimating uncollectibles:
results in a better matching of expenses with revenues.
Correct! The sale of receivables by a business can be a quick way to generate cash for operating needs.
The sale of receivables by a business
can be a quick way to generate cash for operating needs.
Question 2
Correct! April 30 –13 = 17 days remaining in April + 31 days in May + 12 days in June = a maturity date of June 12.
A 60-day note receivable dated April 13 has a maturity date of
June 12.
Question 3
Correct! A company receiving an interest bearing note will debit the Notes Receivable account for the face value of the note.
A company that receives an interest bearing note receivable will
debit Notes Receivable for the face value of the note.
Question 4
Correct! When a note receivable is dishonored, Accounts Receivable is debited for the maturity value of the note, and Notes Receivable and Interest Revenue are credited.
When a note receivable is dishonored,
accounts receivable is debited if eventual collection is expected.
Question 5
Correct! All of the options are issues associated with accounts receivable except analyzing accounts receivable (“Accounts Receivables”).
Accounting issues associated with accounts receivable include all of the following except:
analyzing accounts receivable.
Question 6
Correct! Companies report accounts receivable at their cash (net) realizable value on the balance sheet (“Allowance Method for Uncollectible Accounts”).
Companies report accounts receivable on the balance sheet at:
cash (net) realizable value.
Question 7
Correct! The percentage-of-sales basis of estimating uncollectibles results in a better matching of expenses with revenues-an income statement viewpoint (“Bases Used for Allowance Method”).
The percentage-of-sales basis of estimating uncollectibles:
results in a better matching of expenses with revenues.