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74 Cards in this Set
- Front
- Back
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1. Amount expected to be received in cash.
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Cash (net) realizable value
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2. The party in a promissory note who has issued the promise.
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Maker
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3. A method of accounting for bad debts that involves expensing accounts at the point they are determined to be uncollectable.
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Allowance Method
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4. A measure of the liquidity of receivables, computed by dividing net credit sales by average net receivables.
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Receivables turnover ratio
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5. A finance company or bank that buys receivables from businesses.
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Factor
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6. Receivables that do not result from sales transactions.
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Payee
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7. A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.
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Direct write-off method
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8. The average amount of time that a receivable is outstanding. Calculated by Dividing 365 days by the recievables turnover ratio
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Average collection period
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1. Amount expected to be received in cash.
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"Cash (net) realizable value
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2. The party in a promissory note who has issued the promise to pay.
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MAKER
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3. A method of accounting for bad debts that involves expensing accounts at the point they are determined to be uncollectible.
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Direct write-off method
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4. A measure of the liquidity of receivables, computed by dividing net credit sales by average net receivables
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Revievables turnover Ratio
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5. A finance company or bank that buys receivables from businesses.
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Factor
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6. Receivables that do not result form sales transactions.
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Non-trade receivables
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7. A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.
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Allowance method
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8. Claims for which formal instruments of credit are issued.
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Notes Recievable
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9. The party to whom payment of a promissory note is to be made.
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Payee
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10. The average amount of time that a receivable is outstanding.
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Average collection period
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11. Accounts and notes receivable that result from sales transactions are called:
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Trade receivables
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12. Interest receivable and loans to company officers are included in:
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Non-trade receivables
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13. For a service organization, a receivable is recorded when:
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14. If a company uses the allowance method for uncollectible accounts, then the entry to record estimated uncollectibles is:
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"d. Bad Debts Expense
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15. If a company uses the allowance method for uncollectible accounts, then the entry to record the write-off of an uncollectible account is:
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"b. Allowance for Doubtful Accounts
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16. If a company uses the allowance method for uncollectible accounts, then the entry to record the reinstatement of an account previously written off will include a:
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a. debit to Accounts Receivable
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17. Before a write-off of an uncollectible account, Accounts Receivable had a $10,000 balance, and the Allowance for Doubtful Accounts had a $500 balance. After a write-off of $100, the cash (net) realizable value is:
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b. $9,500
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18. The Allowance for Doubtful Accounts has a $400 credit balance. An aging schedule shows that total estimated bad debts is $3,600. The adjusting entry will require a debit and a credit for:
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3200
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19. The Allowance for Doubtful Accounts has a $400 debit balance. An aging schedule shows that total estimated bad debts is $3,600. The adjusting entry will require a debit and a credit for:
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a. $4,000
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20. A 90-day promissory note is issued on September 15. Its maturity date is:
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c. December 14
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21. A 120-day promissory note is issued on April 4. Its maturity date is:
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b. August 2
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22. A company issues a 120-day, 9% note for $30,000. The total interest on the note is:
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b. $900
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23. A company issues a 60-day, 8% note for $18,000. The total interest on the note is:
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a. $240
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24. The journal entry written on the maturity date by the holder of a 3-month, 12%, $15,000 note, assuming that the note is paid in full, will include a:
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d. debit to Cash for $15,450
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25. A company holds a 120-day, 10%, $21,000 note which was not paid in full on the maturity date. The journal entry on the maturity date will include a:
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a. debit to Accounts Receivable for $21,700
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26. A company holds a 90-day, 12%, $18,000 note which it received on December 1. The adjusting entry for this note on December 31 includes a:
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c. credit to Interest Revenue for $180
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27. A company holds a 60-day, 10%, $24,000 note which it received on November 16. The adjusting entry for this note on December 31 includes a:
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b. debit to Interest Receivable for $300
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28. Which of the following is the correct sequence for receivables on the balance sheet?
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c. Notes receivable, accounts receivable, and other receivables.
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29. A threat of nonpayment from a single customer or class of customers that could adversely affect the financial health of a company is called:
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d. a concentration of credit resk
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30. Net credit sales are $80,000, average net receivables total $150,000, average inventory totals $200,000, and the allowance for doubtful accounts totals $8,000. The receivables turnover ratio is:
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b. 5.33 times
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31. Please use the information from number 20. The average collection period is:
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c. 68.5 days
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32. Kerrison Company sold $6,000 of merchandise to customers who charged their purchases with a bank credit card. Kerrrison’s bank charges it a 4% fee. The journal entry to record the credit card swales will include a:
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a. debit to Cash for $5,760
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33. Costs related to plant assets that are not expensed immediately but are included in a plant asset account are considered ____________ Expenditures
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capital
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34. Depreciation is a process of ______ allocation, not a process of ______ valuation.
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cost, asset
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35. The cost of an asset less its salvage value is called __________ cost.
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depreciable
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36. Ordinary repairs are _______ expenditures.
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revenue
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37. If the proceeds from the sale of a plant asset exceed the book value of the asset, then a ____ on disposal occurs.
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gain
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38. The return on assets ratio can be computed by multiplying the ___________ ratio by the ___________ ratio.
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Profit margin, asset turnover
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39. ___________ is the term used to describe the allocation of the cost of an intangible asset to expense.
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Amortization
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40. A ________ protects artistic or published work.
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copyright
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41. If the useful life of an asset is 8 years, then the straight-line rate is ___________________.
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12.5% (100% / 8 years)
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42. Under the declining-balance method of depreciation, the ____________ is initially ignored in determining the amount to which the rate is applied.
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salvage value
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b. $60,500
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c. $59,000
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a. $209,000
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d. $22,900
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a. Land
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d. All of the above are expressions of useful life.
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d. $5,000
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d. $1,250
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"
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b. the total amount of depreciation for an asset is the same, regardless of the method used
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c. When a change in estimate for depreciation is required, the change is made in current and future years but not to prior periods
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a. an impairment
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b. gain of $500
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a. loss of $500
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d. debit to Loss on Disposal for $1,000
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d. 20%
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b. 1.25 times
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a. Patent
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c. Copyright for $75,000
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a. $2,500
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d. All of the above must be disclosed
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b. $5,500
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a. $3,000
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a. $5,000
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c. $2,500
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