As they are less liquid than cash, cash equivalents cannot be reported on the same line as
Question:
As they are less liquid than cash, cash equivalents cannot be reported on the same line as cash.*
True
False
The expense of not collecting from customers is called:
allowance for uncollectible
net receivables
net realizable value
bad debt expense
With regard to notes receivable, which of the following statements is correct?
Notes receivable are less formal contracts than accounts receivable.
Notes receivable are also called promissory notes because a written promise to pay is not required.
All notes receivable require the borrower to pledge collateral.
The borrower signs a written promise to pay the lender a definite sum at the maturity date, with interest.
Two major types of receivables include account receivables and notes payable.
True
False
One of the benefits of extending credit to customers is the possibility of increased sales.
True
False
Estimating uncollectible accounts by analyzing receivables from specific customers according to how long each has been outstanding is known as the:*
direct write-off method
percent-of-sales method
indirect write-off method
aging-of-receivables method
What category of account is the Allowance for Doubtful Accounts account?*
contra-asset account
contra-revenue account
contra-expense account
expense account
A written promise to pay a specified amount of money at a particular future date is called a(n):*
account receivable
promissory note
maturity note
unearned revenue
The interest on a $50,000 note at 9% for 4 months is:
$1,500
$1,125
$4,500
$18,000
Waterloo Limited accepts a note to settle an overdue account from a customer. The journal entry on Waterloo Limited's books will include a:*
debit to Accounts Receivable
debit to Note Receivable
credit to Note Receivable
debit to Note Payable
Fundamentals of Advanced Accounting
ISBN: 978-0077862237
6th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik