Strayer ACC 556 Chapter 8 Quiz

Question 1

An aging of accounts receivable schedule is based on the premise that the longer the period an account remains unpaid, the greater the probability that it will eventually be collected.

Question 2

Allowance for Doubtful Accounts is a contra account that is deducted from Accounts Receivable on the balance sheet.

Question 3

Under the allowance method, Bad Debt Expense is debited when an account is deemed uncollectible and must be written off.

Question 4

Interest on a 6-month, 10 percent, $10,000 note is calculated by multiplying $10,000 ´ 0.10 ´ 6/12.

Question 5

If a company has significant concentrations of credit risk, it must discuss this risk in the notes to its financial statements.

Question 6

Interest is usually associated with

Question 7

On January 15, Nifty Company sells merchandise on account to Martinez Associates for $3,000 with terms 3/10, n/30. On January 20, Martinez returns merchandise worth $600 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received?

Question 8

The expense recognition

Question 9

Which one of the following is not a principle of sound accounts receivable management?

Question 10

Bad Debt Expense is considered

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Question 11

When an account is written off using the allowance method, the

Question 12

All of the following statements regarding the financial statement presentation of receivables are true except:

Question 13

Which of the following is not true regarding a promissory note?

Question 14

The bookkeeper recorded the following journal entry
Allowance for Doubtful Accounts 1,000
Accounts Receivable – Richard James 1,000

Which one of the following statements is false?

Question 15

The direct write-off method is acceptable for financial reporting purposes only if the bad debt losses are insignificant.

Question 16

When calculating interest on a promissory note with the maturity date stated in terms of days, the

Question 17

The interest on a $4,000, 9%, 90-day note receivable is

Question 18

Which of the following is a way of disposing of a note receivable?

Question 19

The accounts receivable turnover

Question 20

Match the items below by entering the appropriate code letter in the space provided.