1) The interest element for trade receivables

a.must always be recognized and be accounted for.

b.is included in the net realizable value of the receivables.

c.becomes more significant as the time between the sale and payment shortens.

d.is usually not recognized because of materiality considerations.

2) Assuming that the ideal measure of short-term receivables in the statement of financial position is the discounted value of the cash to be received in the future, failure to follow this practice usually does NOT make the financial statements misleading because

a.the amount of the discount is not material.

b.the allowance for uncollectible accounts includes a discount element.

c.most receivables can be sold to a bank or factor.

d.most short-term receivables are not interest-bearing.

3) Playtime sold toys listed at $280 per unit to Jack Inc. for $252, a trade discount of 10 percent. Jack Inc. in turn sells the toys in the market at $265. Playtime should record the receivable and related sales revenue (per unit) at

a.$280.

b.$265.

c.$252.

d.$227.

4) During the year, Popsicle Inc., which uses the allowance method, made an entry to write off a $4,000 uncollectible account. Before this entry was posted, the balance in accounts receivable was $80,000 and the balance in the allowance account was $7,000. The net realizable value of accounts receivable afterthe write off entry was

a.$73,000.

b.$80,000.

c.$77,000.

d.$76,000.