1. Question 1 When product warranty expenses are estimated, an expense is debited and a liability is credited.
2. True
3. False

2 points

Question 2

1. The faster a company collects receivables, the more liquid the receivables are and the higher their quality.
2. True
3. False

2 points

Question 3

1. When credit cards are accepted by a retailer, the retailer generally receives less than the full amount of the sale from the credit agency.
2. True
3. False

2 points

Question 4

1. In June 2012, after trying to collect a $1,200 receivable from Ed Bundy, the Grinch Company wrote off the amount as uncollectible. Two months later, Bundy sent a check for $600. Collection of the remaining $400 is doubtful. Assuming the Grinch Company uses the allowance method, which of the following entries should it make upon receipt of the $600 check?
2. A.Cash
3. 600
5. Accounts Receivable
7. 600
9. B.Accounts Receivable
10. 600
12. Allowance for Uncollectible Accounts
14. 600
15. Cash
16. 600
18. Accounts Receivable
20. 600
22. C.Cash
23. 1,200
25. Accounts Receivable
27. 1,200
29. D.Accounts Receivable
30. 1,200
32. Allowance for Uncollectible Accounts
34. 1,200

2 points

Question 5

1. Contingent liabilities often result from lawsuits.
2. True
3. False

2 points

Question 6

1. The current portion of long-term debt will appear in the balance sheet under the heading:
2. A.Other Debt.
3. B.Intermediate-term Liabilities.
4. C.Long-term Liabilities.
5. D.Current Liabilities.

2 points

Question 7

1. When a note is dishonored, the payee should debit Accounts Receivable for the maturity value of the note.
2. True
3. False

2 points

Question 8

1. A properly adjusted Allowance for Uncollectible Accounts will always have a credit balance.
2. True
3. False

2 points

Question 9

1. The account, Allowance for Uncollectible Accounts, is a contra-asset account.
2. True
3. False

2 points

Question 10

1. Revenue from sales is generally recorded at the point of sale, whether cash or an account receivable is received in the exchange.
2. True
3. False

2 points

Question 11

1. When using the percentage of accounts receivable method of estimating uncollectible accounts, any existing balance in Allowance for Uncollectible Accounts is ignored.
2. True
3. False

2 points

Question 12

1. Generally, the older the account receivable, the lower the probability of collection.
2. True
3. False

2 points

Question 13

1. Credit card companies absorb the loss from uncollectible accounts.
2. True
3. False

2 points

Question 14

1. The price-earnings ratio is computed by dividing the current market price per share of common stock by earnings per share.
2. True
3. False

2 points

Question 15

1. The preemptive right refers to a stockholder's right to receive dividends when they are declared by the board of directors.
2. True
3. False

2 points

Question 16

1. The board of directors is elected by the stockholders and exercises broad directional control over the affairs of the corporation.
2. True
3. False

2 points

Question 17

1. The charter is the contract between the state and the incorporators which gives the corporation its separate legal existence.
2. True
3. False

2 points

Question 18

1. Preferred stockholders generally give up voting rights for priority claims on earnings of the corporation.
2. True
3. False

2 points

Question 19

1. The market value of a stock depends on a number of factors, including investors' expectations regarding the future performance of a corporation.
2. True
3. False

2 points

Question 20

1. When Retained Earnings has a debit balance, a deficit exists.
2. True
3. False

2 points

Question 21

1. The date of record follows the date of the declaration of a dividend.
2. True
3. False

2 points

Question 22

1. The par value of a share of common stock is:
2. A.a changing amount which varies according to earnings and losses of the issuing corporation.
3. B.generally of little significance, being merely a nominal and arbitrary amount printed on a stock certificate.
4. C.the amount at which, according to some state laws, the share must be first issued.
5. D.the amount for which the stock can be sold in the market.

2 points

Question 23

1. The fact that a stockholder's responsibility for corporate debts is usually limited to his or her investment in the capital stock of the corporation is the main reason one might favor the corporate form of business organization in a risky endeavor.
2. True
3. False

2 points

Question 24

1. Probably the most basic right of a stockholder is the right to:
2. A.serve as a director of the organization.
3. B.vote at stockholders' meetings.
4. C.receive at least his or her initial investment upon liquidation.
5. D.receive an assured dividend each year.

2 points

Question 25

1. When a statement of stockholders' equity is prepared, it replaces the statement of retained earnings.
2. True
3. False

2 points

Question 26

1. In The Profit's A Stein Meats Receivables Video clip,how much money does Marcus give Stein Meats for Brooklyn Burger and to help the company in the short-term?
2. $30,000
3. $200,000
4. $1 million
5. $10 million

2 points

Question 27

1. In The Profit's A Stein Meats Receivables Video clip,Jamie, Marcus' Portfolio Manager, uncovers that Stein Meats owes how much in liabilities?
2. $500,000
3. $7.8 million
4. $4 million
5. $2 million

2 points

Question 28

1. In The Profit's A Stein Meats Receivables Video clip, Stein Meats has negative equity, meaning they owe more than they own.
2. True
3. False

2 points

Question 29

1. In The Profit's A Stein Meats Receivables Video clip,how much money does Stein Meats have in the bank to pay their bills?
2. $30,000
3. $300,000
4. $500,000
5. $4 million

2 points

Question 30

1. In The Profit's A Stein Meats Receivables Video clip,one of the best ways to collect receivables from customers is to get on the phone and ask them for it.
2. True
3. False