9) The allowance for credit losses account is classified as A) a contra-asset account. B) a contra-revenue account. C) a contra-expense account. D) a contra-equity account. 10) Which one of the following is an example of an aggressive revenue recognition policy? A) A firm recognizes revenue at time of collection. B) A firm recognizes revenue at the expiration of the sales returns period. C) A firm with a liberal sales return policy recognizes revenue at shipment. D) A firm with a liberal sales return policy recognizes revenue at shipment with a corresponding allowance for returns and allowances. 11) When a note receivable has a stated interest rate that is lower than the prevailing rate for similar loans, it is recorded at: A) present value based on the stated interest rate. B) present value based on the prevailing rate of interest. C) maturity value. D) net realizable value. 12) Non-interest bearing notes are initially recorded at A) historical cost. B) maturity value because they bear no interest. C) present value, based on the prevailing interest for loans of this type. D) future value, based on the prevailing interest for loans of this type. 13) On January 2, 20X1, Jensen Corporation sells equipment it manufactured to Lewisburg Fabricators in exchange for an $80,000 note due in five years. The note bears no stated interest rate, but requires the entire $80,000 to be repaid at the end of five years. Jensen recently sold the same equipment to another company for $54,447. When Lewisburg Fabricators sought bank financing for this purchase the company was offered the funds at 8%, but decided to let Jensen hold the note. What amount will Jensen recognize as interest income during 20X1 ? A) $4,356 B) $4,704 C) $5,111 D) $0