__________________________ Date: _____________ 1. The maturity date of a note receivable: A) Is the day of the credit sale. B) Is the day the note was signed. C) Is the day the note is due to be paid. D) Is the date of the first payment. E) Is the last day of the month. 2. The amount of bad debt expense can be estimated by: A) The percent of sales method. B) The percent of accounts receivable method. C) The aging of accounts receivable method. D) Only b and c. E) Bad debt expense can be estimated by any of
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bad debts are: (1) Uncollectible accounts receivable are estimated and matched against revenues in the same accounting period in which the revenues occurred. (2) Estimated uncollectibles are debited to Bad Debts Expense and credited to Allowance for Doubtful Accounts through an adjusting entry at the end of each period. (3) Actual uncollectibles are debited to Allowance for Doubtful Accounts and credited to Accounts Receivable at the time the specific account is written off as uncollectible.
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of _ accounts receivable _______ for the company. Q 8.36: Which of the following is true of accounts receivable and notes receivable? Both accounts receivable and notes receivable represent claims that a company expects to receive in cash. Q 8.37: Notes receivable are written promises that are considered formal instruments of credit Q 8.38: Another name for trade receivables‚ which result from sales transactions‚ is accounts receivable Q 8.39: Trade receivables are accounts receivable that
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accounting concept governs the above? a. The prudence concept b. The materiality concept c. The accruals concept * d. The dual accept concept 3. Which accounting concept requires that foreseen losses should be anticipated and taken into account immediately? a. The consistency concept b. The accruals concept c. The prudence concept * d. The going concern concept 4. In times of rising prices‚ what effect does the use of the historical cost concept have on a company’s asset values
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Chapter 4 Receivables and Related Revenues MULTIPLE CHOICE – THEORY 1. D 6. D 2. C 7. B 3. C 8. B 4. B 9. A Problem 1 (Fontana Blue) a. Cost of Sales Inventory 20‚000 b. Cost of Sales Inventory 18‚000 18‚000 c. No adjustment d. Sales 20‚000 40‚000 Accounts Receivable e. 40‚000 Sales 60‚000 Accounts Receivable 60‚000 Inventory 33‚600 Cost of Sales f. 33‚600 Sales 120‚000 Accounts Receivable g. 120‚000
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Current Assets Learning Objectives Upon reading this chapter‚ students should: • Be able to compare and contrast working and fixed capital • Understand the impact of the operating cycle on the size of investment in accounts receivable and inventories • Know the differences between the three motives • Be able to differentiate between float‚ collection float‚ and disbursement float • Know how to appraise a firm’s credit worthiness •
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share $1.21 $0.78 $0.46 Common Size Balance Sheets Column7 Year 1988 1988 1987 1987 1986 1986 Current Assets Cash $885 0.75% $514.00 0.79% $63 0.15% Receivables $51‚076 43.23% $27‚801.00 42.61% $14‚402 33.34% Inventories $39‚135 33.13% $19‚577.00 30.01% $9‚762 22.60% Other Assets $3‚015 2.55% $1‚449.00 2.22% $708 1.64% Total Current Assets $94‚111 79.66% $49
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collectability of the accounts receivables was problematic. It seemed as if Fly-by-Night had a good system of collecting their sales on account from year 9 to year 10 as the accounts receivable number decreased during those years. However‚ the accounts receivable account increased by more than six times through years ten and fourteen. Because of this poor system of collecting accounts receivable‚ Fly-by-Night’s cash flow would suffer. The same can be said about the inventory account. Because the amount
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you are responsible for developing an audit program for a manufacturing client that sells to over 1‚400 customers. You want to ensure your audit program addresses all relevant assertions for sales and accounts receivable. Address the following question in the context of the audit sales and receivables for this manufacturing client. Required a. What is the purpose of an audit program? The purpose of an audit program is to document decisions about the audit procedures that the auditor believes are
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1‚500 Inventory December 31‚ 2007 (adjusted) $237‚392 (b) Transaction 3 Sales 12‚800 Accounts Receivable 12‚800 (To reverse sale entry in 2007) Transaction 4 Purchases (Inventory) 15‚630 Accounts Payable 15‚630 (To record purchase of merchandise in 2007) Transaction 8 Sales Returns and Allowances 2‚600 Accounts Receivable 2‚600 EXERCISE 8-14 (20–25 minutes) (a) (1) LIFO 600 @ $6.00 = $3‚600 100 @ $6.08 =
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