Help with Accounting multiple choice questions Chapter 7

Multiple Choice 6-1 Which of the following statements is true? i. Accounts receivable may be reported as a current asset or a current liability. ii. Accounts receivable are reported at net realizable value on the balance sheet. a. i only b. ii only c. Both i and ii d. Neither i nor ii 2. eBook Multiple Choice 6-2 Accounts receivable are: a. recorded at the time cash is received. b. netted with a liability account to be presented on the balance sheet at net worth. c. recorded when a revenue is earned but cash has not yet been received. d. reported as unearned revenue until payment is received. 3. eBook Multiple Choice 6-3 Which of the following is not true of the Sales Returns and Allowances account? a. It is a contra-revenue account b. It is increased when sales are returned c. It is a contra-expense account d. It is a temporary account that is zeroed-out during the closing process 4. eBook Multiple Choice 6-4 Under the direct write-off method: a. bad debt expense increases only when a receivable is deemed uncollectible. b. a contra-asset account is used to estimate the amount of receivables that will be uncollectible. c. the matching principle of accounting is not violated. d. the income statement approach is used to estimate Bad Debt Expense. 5. eBook Multiple Choice 6-5 The allowance method: a. requires only one journal entry to write off uncollectible accounts and record bad debt expense. b. uses a contra-asset account to report accounts receivable at net realizable value. c. is not recommended by GAAP. d. is only used if the amount of accounts receivable is immaterial. 6. eBook Multiple Choice 6-6 The percentage-of-sales approach to estimating bad debt expense: a. is considered a balance sheet approach. b. focuses on getting the allowance for bad debts account as accurate as possible. c. matches expenses and revenues better than the percentage-of-receivables approach. d. is calculated using gross margin. 7. eBook Multiple Choice 6-7 Which is not true of the percentage-of-receivables approach to estimating bad debt expense? a. It is calculated in two steps b. It is a function of a company's receivables balance c. It results in a meaningful net realizable value d. It always results in less bad debt expense compared to the percentage-of-sales approach 8. eBook Multiple Choice 6-10 Which of the following statements is correct? i. The receivables turnover ratio is indicative of a company's ability to collect its receivables ii. Companies normally strive to maintain a high receivables turnover ratio. a. i only b. ii only c. Both i and ii d. Neither i nor ii 9. eBook Multiple Choice 6-12 Which of the following is not true of a note receivable: a. A note receivable can be reported as a current asset or a non-current asset depending on the maturity date of the receivable b. A note receivable is normally acquired through the acceptance of a promissory note in settlement of a debt c. When a note receivable is received for services rendered, the revenue is not reported until the maturity date of the note d. The entity borrowing the money is considered the maker of the note 10. eBook Multiple Choice 6-13 When accounting for a note receivable: a. interest revenue is never recorded until payment is received. b. interest receivable is normally reported as a current asset. c. interest rates are normally stated at semi-annual rates. d. the note receivable is recorded at issuance with a credit entry