1.

When the allowance method of recognizing uncollectible accounts is used, what is the net effect of a collection of an account previously written off on Accounts Receivable and the Allowance for Uncollectible Accounts, respectively?

Select one:

a. Increase, Decrease

b. Increase, No Effect

c. No Effect, Decrease

d. No Effect, Increase

e. Increase, Increase

2.

The use of a Sales Discounts Forfeited account implies that the recorded amount of Sales Revenue is:

Select one:

a. Retail price

b. Retail price plus the sales discount amount, when taken

c. Retail price plus the sales discount amount, whether or not taken

d. Retail price less the sales discount allowable, when taken

e. Retail price less the sales discount allowable, whether or not taken

3.

Starting 1/1/14 and continuing each January 1 for four additional years, Case Corporation will deposit $10,000 in an account that will initially earn interest at a rate of 5%, credited each year on December 31. After the last deposit is made on 1/1/18, the account will earn 10% interest. What will be the approximate amount of the investment fund on December 31, 2020?

Select one:

a. $ 66,860

b. $60,782

c. $67,012

d. $70,363

e. $73,546

4.

Sharon Walsh has developed an educational software package. She agrees to sell the patent to Pensca for five annual payments of $50,000 each. The payments are to begin three years from today. Given an annual rate of 8%, what is the approximate present value of the five payments?

Select one:

a. $199,635

b. $184,848

c. $158,477

d. $171,155

e. $369,511

5.

On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $500,000 and a due date of December 31, 2017. The stated rate of interest is 10% with interest receivable at the end of each year through 12/31/17. Assume an effective interest rate of 5% is implicit in the agreed-upon price. The effective amortization method is used

Oxfords journal entry on 1/1/15 will record approximately what amount of service revenue?

Select one:

a. $500,000

b. $450,000

c. $562,171

d. $437,829

e. $568,081