16. Sellers allow customers to use credit cards: A. To avoid having to evaluate a customer's credit standing for each sale. B. To lessen the risk of extending credit to customers who cannot pay. C. To speed up receipt of cash from the credit sale. D. To increase total sales volume. E. All of these. 17. A promissory note: A. Is a short-term investment for the maker. B. is a written promise to pay a specified amount of money at a certain date. C. Is a liability to the payee. D. Is another name for an installment receivable. E. Cannot be used in payment of an account receivable. 18. Pledging receivables: A. Allows firms to raise cash. B. Allows a firm to retain ownership of its receivables. C. Does not transfer risk of bad debts to the lender. D. Should be disclosed in the financial statements. E. All of these. 19. A company factored $45,000 of its accounts receivable and was charged a 3% factoring fee. The journal entry to record this transaction would include a: A. Debit to Cash of $45,000, a debit to Factoring Fee Expense of $1,350, and credit to Accounts Receivable of $43,650. 8. Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000. C. Debit to Cash of $43,650, a debit to Factoring Fee Expense of $1,350, and a credit to Accounts Receivable of $45,000. D. Debit to Cash of $46,350 and a credit to Accounts Receivable of $46,350. E. Debit to Cash of $45,000 and a credit to Notes Payable of $45,000. 20. On December 31 of the current year, a company's unadjusted trial balance included the following: Accounts Receivable, debit balance of $97.250; Allowance for Doubtful Accounts, credit balance of $951. What amount should be debited to Bad Debts Expense, assuming 6% of outstanding accounts receivable at the end of the current year will be uncollectible? A. $951. B. $3,992 C. $4,884. D. $5,835. E. $6,786 4 Page