Question CHAPTER 8 Circle the letter of the best response (20 points) 1 Which of the following is an example of a good internal control for the credit department a Employees who grant credit to customers should not also evaluate customer financial position b Employees who handle cash receipts should not also grant credit to customers c Only employees who are responsible for billing customers should also grant credit to customers d All of these are good internal controls for the credit department 2 What is the term that describes an entity that purchases the accounts receivables of a seller a Honorer b Buyer c Pledger d Factor 3 The person who signs a note receivable and promises to pay the principal and interest is called the a payee b principal c maker d signer 4 What is the amount of interest accrued on $3,600 at 7 for 60 days a $42 b $60 c $252 d $600 5 Heather's Hair Products estimates that $534 of its $28,720 Accounts Receivable are uncollectible What is the net realizable value of Accounts Receivable a $534 b $28,186 c $28,720 d $29,274 6 The direct write off method of accounting for uncollectible receivables is a an example of the balance sheet approach b an example of the income statement approach c not in conformity with GAAP d in conformity with the matching principle 7 Gorp Corp has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Gorp customers' credit card a sales receipts The credit card company receives 3 5 of card sales as its fee Today Gorp has $2,000 in credit card sales The journal entry to record the sales transactions will include which of the following a Debit Accounts ReceivableCredit Card Co $2,000 b Debit Accounts ReceivableCredit Card Co $1,930 c Debit Cash $2,000 d Debit Cash $1,930 8 On December 12, Howard's Hardware sells materials for $7,800 to John Smith Smith signs a 60 day promissory note at 7 annual interest On December 12, the journal entry made by Howard's Hardware for the sale to John Smith will include a a credit to Sales Revenue for $7,800 b a debit to Accounts Receivable for $7,800 c a credit to Interest Revenue for $91 d a debit Interest Receivable for $91 9 At year end, Urus Company has Cash of $15,500, Accounts Receivable of $52,300, Inventory of $28,700, and Prepaid Expenses totaling $7,200 Total Current Liabilities are $48,800 and Total Assets are $195,500 What is the quick ratio (rounded) a 0 32 b 0 95 c 1 39 d 1 98 10 Accounts receivable turnover for ABC Company was 8 7 for this year and 9 8 for last year For XYZ, Inc , accounts receivable turnover was 9 4 for this year and 8 9 for last year These results indicate that a ABC Company has better turnover than XYZ, Inc for both years b XYZ, Inc is collecting its receivables more quickly this year than last year c Turnover for ABC Company is improving d Credit policies for XYZ, Inc are too strict for its customer base

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 28, 2024

Question: CHAPTER 8 Circle the letter of the best response. (20 points) 1-Which of the following is an example of a good internal control for

Question:

CHAPTER 8

Circle the letter of the best response. (20 points)

1-Which of the following is an example of a good internal control for the credit department?
a-Employees who grant credit to customers should not also evaluate customer financial position.
b-Employees who handle cash receipts should not also grant credit to customers.
c-Only employees who are responsible for billing customers should also grant credit to customers.
d-All of these are good internal controls for the credit department.
2-What is the term that describes an entity that purchases the accounts receivables of a seller?
a-Honorer
b-Buyer
c-Pledger
d-Factor
3-The person who signs a note receivable and promises to pay the principal and interest is called the
a-payee.
b-principal.
c-maker.
d-signer.
4-What is the amount of interest accrued on $3,600 at 7% for 60 days?
a-$42
b-$60
c-$252
d-$600
5-Heather's Hair Products estimates that $534 of its $28,720 Accounts Receivable are uncollectible. What is the net realizable value of Accounts Receivable?
a-$534
b-$28,186
c-$28,720
d-$29,274
6-The direct write-off method of accounting for uncollectible receivables is
a-an example of the balance sheet approach.
b-an example of the income statement approach.
c--not in conformity with GAAP.
d-in conformity with the matching principle.
7-Gorp Corp. has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Gorp customers' credit card a-sales receipts. The credit card company receives 3.5% of card sales as its fee. Today Gorp has $2,000 in credit card sales. The journal entry to record the sales transactions will include which of the following?
a-Debit Accounts ReceivableCredit Card Co $2,000
b-Debit Accounts ReceivableCredit Card Co $1,930
c-Debit Cash $2,000
d-Debit Cash $1,930
8-On December 12, Howard's Hardware sells materials for $7,800 to John Smith. Smith signs a 60-day promissory note at 7% annual interest. On December 12, the journal entry made by Howard's Hardware for the sale to John Smith will include
a-a credit to Sales Revenue for $7,800.
b-a debit to Accounts Receivable for $7,800.
c-a credit to Interest Revenue for $91.
d-a debit Interest Receivable for $91.
9-At year-end, Urus Company has Cash of $15,500, Accounts Receivable of $52,300, Inventory of $28,700, and Prepaid Expenses totaling $7,200. Total Current Liabilities are $48,800 and Total Assets are $195,500. What is the quick ratio (rounded)?
a-0.32
b-0.95
c-1.39
d-1.98
10-Accounts receivable turnover for ABC Company was 8.7 for this year and 9.8 for last year. For XYZ, Inc., accounts receivable turnover was 9.4 for this year and 8.9 for last year. These results indicate that
a-ABC Company has better turnover than XYZ, Inc. for both years.
b-XYZ, Inc. is collecting its receivables more quickly this year than last year.
c-Turnover for ABC Company is improving.