Reporting and Analyzing Receivables MCQs

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What are notes or accounts receivables that result from sales transactions often called?






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________ are also called trade receivables.






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________ are three accounting issues associated with accounts receivable.






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The net amount expected to be received in cash from receivables is termed the _____ _____ value.




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When would a credit card holder receive lower interest charges?






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Writing off an uncollectible account affects ________ under the allowance method.






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What is the Bad Debts Expense considered?






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The balance of Allowance for Doubtful Accounts prior to making the adjusting entry to record estimated uncollectible accounts _____ relevant when usin...




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The entry to recognize the bad debt expense ________ when the allowance method is used.






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What are the two key parties to a promissory note?






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Maynard Mills received a 60-day, 5% note for $10,000 on April 5th. Which of the following statements is true?






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Which of the following statements about a note receivable is true?






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What happens when a note receivable is dishonored?






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When a note receivable is honored, Cash is debited for the note's






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A debit to ________ is entered to record the dishonor of a note receivable assuming the payee expects eventual collection.






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How is the average collection period computed?






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The use of credit cards offers advantages to the retailer. Which of the following is NOT an advantage of credit cards to the retailer?






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The retailer ________ when customers use national credit cards to make purchases.






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When a factor buys accounts receivable, the charge for the factor's commission is recorded as






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All of the following are principles of managing accounts receivable EXCEPT






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The average collection period for receivables is computed by dividing 365 days by which of the following?






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Another name for trade receivables, which result from sales transactions, is






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Two methods of accounting for uncollectible accounts are the direct write-off method and the accrual method.




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When the allowance method is used, current assets increase when an entry recognizes bad debts.




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Writing off an uncollectible account affects the balance sheet account and ______ affect the income statement accounts under the allowance method.




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The _____ amount expected to be collected from receivables is the cash realizable value.




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A written promise of amounts to be received as the result of a sales transaction, a note or account receivable is often called a






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When a company receives an interest-bearing note receivable, it will ______ Notes Receivable for the face value of the note.




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What is represented by the following formula? Face Value of Note × Annual Interest Rate × Time in Terms of One Year = Interest






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If a company receives a 60-day, 5% note for $5,000 on September 5, which of the following statement is true?






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If a company receives a 60-day, 5% note for $5,000 on September 5, which of the following statement is true?






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A(n) ________ may be used to settle accounts receivable.






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A promissory note may be used to settle accounts receivable.




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A note receivable can be transferred ________ by endorsement.






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When calculating interest on a promissory note with the maturity date stated in terms of days, the payer receives _____ interest if 360 days are used ...




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Being transferrable to another party by endorsement _____ one of the characteristics of a note receivable.




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When the due date of a note is stated in months, what is the time factor in computing interest?






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An annual rate of interest would be _____ way in which to state the interest rate for a three-month loan.