|1. |Notes Receivable and Accounts Receivable can also be called trade receivables. |True False | |2. |Receivables not currently collectible are reported in the investments section of the balance sheet. | | | | |True False |
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Employees 7. Financing activities involve obtaining __________ to operate a business. a. products b. customers c. business incentives d. funds 8. When a business borrows money‚ it incurs a(n) a. tax. b. liability. c. receivable. d. additional equity. 9. Shares of ownership are evidenced by issuing a. bonds payable. b. commercial paper. c. shares of stock. d. notes payable. 10. The resources a business owns are called a. assets. b. liabilities
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for 3 month’s advance tk. 6‚000. 02: Purchased delivery van for cash tk. 20‚000. 04: Purchased supplies on account tk. 2‚500. 06: Purchased supplies for cash tk. 1‚000. 10: Service rendered to a customer and immediately collected tk. 6‚000 12: Service rendered to a customer on account tk. 13‚000. 18: Paid utility expense of the month tk. 1‚000 cash. 22: Paid for the supplies purchased on
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result of sales on credit or on account is a bad debts expense. 2. What is the purpose of the Allowance for Doubtful Accounts? This account is a contra-asset account that accumulates the expected amount of bad debts as of a given date. This account is also a permanent account that is not closed to Income Summary at the end of the year. 3. What is net realizable value? Net realizable value is the amount of accounts receivable that is expected to be collected
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Case: Island Trading Co.‚ a client of your CPA firm‚ has requested your advice on the following problems. It has three clerical employees who must perform the following functions: 1) maintain general ledger. 2) Maintain accounts payable ledger. 3) Maintain accounts receivable ledger. 4) Maintain cash disbursements journal and
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expects that 9 percent of the new accounts will be uncollectible. Collection costs are 5 percent of new sales‚ production and selling costs are 78 percent‚ and accounts receivable turnover is five times. Assume income taxes of 30 percent and an increase in sales of $80‚000. No other asset buildup will be required to service the new accounts. a. What is the level of accounts receivable needed to support this sales expansion? Investment in Accounts receivables = 80‚000/ 5 = $16‚000 b. What would
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(c) July Sale Entry. Accounts Receivable 16‚000‚000 Allowance for Returns 1‚920‚000 ($16‚000‚000 X 12%) Sales Revenue—Texts 14‚080‚000 (d) October Collection. Cash 14‚000‚000 Sales Revenue—Texts* 80‚000 Allowance for Returns 1‚920‚000 Accounts Receivable 16‚000‚000 *A debit to either Sales Revenue—Texts or Sales Returns could be made here. EXERCISE 18-2 (15-20 minutes) (a) 1. 6/3 Accounts Receivable—Kim Rhode 5‚000 Sales 5‚000
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savings accounts. b. money orders from customers. c. compensating balances. d. IOUs from customers. ANS: D PTS: 1 OBJ: LO1 NAT: AACSB correlation: analytic LOC: Learning Type: Recall KEY: cash and cash equivalents 2. A company’s acceptance of credit cards like Visa is an example of a. securitization. b. factoring with recourse. c. discounting. d. factoring without recourse. ANS: D PTS: 1 OBJ: LO1 NAT: AACSB correlation: analytic LOC: Learning Type: Comprehension KEY: financing receivables 3
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intermediate 1 points Save Remington Corporation had accounts receivable of $100‚000 at 1/1. The only transactions affecting accounts receivable were sales of $600‚000 and cash collections of $550‚000. The accounts receivable turnover is A. 4.0. B. 4.8. C. 4.4. D. 6.0. 1 points Save The percentage-of-receivables approach of estimating uncollectible accounts emphasizes matching over valuation of accounts receivable. True False 1 points Save Which
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disposition of accounts receivables? What is their function? Since the majority of US thrive on the use of credit cards‚ the accounts receivables for a company may no longer be on a cash-to-cash basis. A company may need to sell these accounts to other companies who specialize in handling accounts receivables if they need cash more quickly or if it would be too costly to perform the necessary billing to collect on the account. The entries used to record the disposition when the receivables are sold
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