TRUE OR FALSE

1. When calculating bad debts, an aging of receivables is used for the direct write off method.
2. Promoting inefficient operations is a purpose of effective financial controls.
3. Separation of duties is an important internal control with regards to cash.
4. A compensating balance is a minimum cash balance in a company's chequing or savings account as support for a loan borrowed from a bank.
5. A trade (accounts) receivable is an amount owed by customers for goods or services sold by a company on credit in the normal course of business.
6. The credit term 2/10, n/45 means that there is a 2% discount if the invoice is paid within 10 days, with the total amount due in 45 days.
7. When accounts receivables exist, some amounts of uncollectible receivables are inevitable due to credit risk
8. If accounts receivable are used as collateral for a loan, the receivables should be removed from a companies books.
9. The net realizable value regarding accounts receivable is the amount expected to be paid to vendors.
10. "Sales Discounts" is reported on the balance sheet as a contra-account.