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Exam 9: Receivables

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Question 91

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What is the maturity value of a 6-month,13% note for $80,000? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

A) $82,000
B) $90,400
C) $85,200
D) $80,000

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Question 92

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Sales through credit or debit cards transfer the risk of collection of receivables from the seller to the card issuer.

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Question 93

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If a customer makes payment on a receivable that has already been written off,the receivable account is reestablished.

When a company is using the direct write-off method,and an account is written off,the journal entry consists of a ________.

The employees who handle cash know how customers pay and thus are in the best position to grant credit to customers.

A six-month note receivable for $5000 at 11%,dated October 1,2020,has accrued interest revenue of ________ as of December 31,2020.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

Accounts Receivable are generally reported at the gross amount on the balance sheet.

Edgewood Home Improvement Store reported the following selected items at June 30,2019 (previous year - 2018 - amounts are also given as needed): Compute Edgewood's days' sales in receivables for the year ending June 30,2019.Show your computations.

Interest is generally stated as a monthly rate on notes receivable.

Interest on a $15,000 note at 4% for 4 months is $200.

Accounts receivable are usually collected within a short period of time and are therefore reported as a current liability on the balance sheet.

Interest on a $40,000 note at 10% for 45 days is $493.(Use a 360 day year.Round your answer to the nearest dollar. )

The following information is from the records of Chicago Photography: Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $2950 of accounts receivable will be uncollectible.Calculate the amount of net accounts receivable after the adjustment for bad debts.

When a business factors its receivables,the factor collects cash on the receivables.

Historical Art is a new business.During its first year of operations,credit sales were $55,000 and collections on credit sales were $33,000.One account of $500 was written off.Management uses the percent-of-sales method to account for bad debts expense and estimates 3% of credit sales to be uncollectible.The ending balance of Allowance for Bad Debts account is ________.

The following information is from the 2019 records of Uptown Antique Shop: Bad debts expense is estimated by the percent-of-sales method.Management estimates that 4% of net credit sales will be uncollectible.The ending balance of the Allowance for Bad Debts account after adjustment will be ________.

The allowance method of accounting for uncollectible receivables ________.

The entity that signs the promissory note and promises to pay the required amount is the ________.

Two methods of estimating uncollectible receivables are ________.

Which of the following is TRUE of the acid-test ratio?