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This assessment is worth 100 points.

  1. TechCom's customer, RDA, paid off an $8,300 balance on its account receivable. TechCom should record the transaction as a debit to Accounts Receivable-RDA and a credit to Cash.   (5 points)

      
      

  2. A company borrowed $1,000 by signing a six month promissory note at 11% interest. The total amount of interest is $55.   (5 points)

      
      

  3. A contingent liability is an obligation to make a future payment if an uncertain future event occurs.   (5 points)

      
      

  4. Short-term investments are reported and classified along with long-term investments on the balance sheet.   (5 points)

      
      

  5. The cost of a short-term investment includes the purchase price, commissions, and any other necessary acquisition costs.   (5 points)

      
      

  6. The aging of accounts receivable involves examining each account receivable, often grouped by datedness, to estimate the amount that is uncollectible.   (5 points)

      
      

  7. Installment accounts receivable is another name for aging accounts receivable.   (5 points)

      
      

  8. A company received a $1,000, 90-day, 10% note receivable. The journal entry to record receipt of the note includes a debit to Notes Receivable.   (5 points)

      
      

  9. It is always bad business practice to accept a note receivable in exchange for an overdue account receivable.   (5 points)

      
      

  10. Available-for-sale securities are actively managed trading securities.   (5 points)

      
      

  11. A promissory note received from a customer in exchange for an account receivable:   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  12. The person who signs a note receivable and promises to pay the principla and interest is the:   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  13. A company receives a 10%, 90-day note for $1,500. The total interest on the note is:   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  14. A note receivable discounted with recourse is:   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  15. Investments that mature between 3 and 12 months are:   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  16. The quality of receivables refers to:   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  17. A company has net sales of $435,000 and average accounts receivable of $87,000. What is its accounts receivable turnover for the period?   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  18. On October 29 of the current year, a company concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on this company's net income and total assets assuming the allowance method is used to account for bad debts?   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  19. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  20. Failure by a promissory note's maker to pay the amount due at maturity is known as:   (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  



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