CHAPTER 8 Receivables & The maturity date on the outstanding note receivable is important for the following reason: The specific number of days the note is outstanding is important to determine interest income and interest receivable. b. The maturity date on the note triggers the collection of cash outstanding on the value of the note. c. Both A and B. d. None of the above 9. When a note receivable is dishonoured, the following action is taken to adjust accounting records: a. The note receivable is immediately written off to bad debt expense. b. A percentage of the note receivable outstanding is written off to bad debt expense. c. The dollar value of the note receivable is transferred to an accounts receivable balance. d. The dollar value of the note receivable plus outstand- ing interest owed is transferred to an accounts receiv- able balance. 10. Accounts receivable turnover helps users of financial statements to: a. Measure quality of accounts receivable. b. Measure liquidity of accounts receivable. c. Both A and B d. None of the above. CONCEPT REVIEW QUESTIONS process 1. Identify and explain the criteria that must be met before recording accounts receivable and revenue. 2. Identify three roles or responsibilities that should be seg. regated within the accounts receivable 3. Explain why writing off a bad debt against the allowance account does not reduce the estimated realizable value of a company's accounts receivable. Why does the Bad Debt Expense account usually not have adjusted balance as the Allowance for Doubtful 5. Why does the direct write-off method of accounting for bad debts commonly fail to match revenues and expenses? 6. What is the essence of the accounting principle of materiality? 7. Why might a business prefer a note receivable to an ac- count receivable? 8. Review the balance sheet for Spin Master in Appendix III. Did accounts receivable increase or decrease from 2016 to 2017 and by how much? 9. What does it mean to sell a receivable without recourse? the same Accounts