Verizon 1:21 PM 73% XACCT 2110-04 CH 5 TKH Q 1) To satisfy a performance obligation means that: A) the provider has substantially completed the service for the customer. B) the goods have been transferred to the customer who has assumed ownership and control over goods. C) the selling entity has done everything required to earn the revenue D) All of the above statements are correct. 2) We sell to a customer paying with Visa and the fee is 2%. Part of the transaction would include a debit to: A) Sales Revenue. B) Sales Discount. C) Accounts Receivable. D) Credit Card Discount Expense. 3) Stelloh's Berry Farm accepted a bank-issued credit card in payment of a $1,600 sales transaction. Stelloh's bank charges 1% to process the transaction. The journal entry to record the sales transaction will include (Ignore cost of goods sold.): A) a debit to Accounts Receivable for $1,584 and a credit to Sales Revenue for $1,584 B) a debit to Cash for S1,600 and a credit to Sales Revenue for $1,600 C) a debit to Cash for $1,584, a debit to Credit Card Discount Expense for $16 and a credit to Sales Revenue for S1,600. D) a debit to Accounts Receivable for $1,600, a debit to Credit Card Revenue for $16 and a credit to Sales Revenue for $1,616. 4) If Abby, Inc. sells items to a customer who uses a credit card for $1,900, and there is a credit card fee of 2.5%, Abby will record a(n): (Round your final answer to the nearest dollar.) A) credit to Sales Revenue for $1,852. B) debit to Accounts Receivable for $1,852 C) debit to Sales Expense for $48. D) debit to Credit Card Discount Expense for $48. 5) When a merchant sells merchandise and lets the customer pay with a VISA credit card: A) The strategy may increase sales dramatically, with no additional costs involved. B) At the time of sale, Credit Card Receivable is debited and a Open With Print ." Verizon 1:22 PM 73% XACCT 2110-04 CH 5 TKH Q 5) When a merchant sells merchandise and lets the customer pay with a VISA credit card: A) The strategy may increase sales dramatically, with no additional costs involved. B) At the time of sale, Credit Card Receivable is debited and Sales Revenue is credited for the discounted portion of the sale amount. C) The merchant's point-of-sale terminal is linked to a VISA server which automatically credits the merchant's bank account for the full sale amount. D) The credit card discount is similar to interest expense and is reported on the income statement separately from operating ncome as other income (expense). 6) When journalizing for the estimated sales returns, there would be a debit to: A) Sales Refunds Payable. B) Cost of Goods Sold. C) Sales Returns and Allowances. D) Accounts Receivable. 7) When journalizing for an actual sales return, there would be a debit to: A) Sales Refunds Payable. B) Cost of Goods Sold. C) Sales Returns and Allowances. D) Accounts Receivable. 8) On December 2, a customer returned merchandise, with a selling price of $1,400 purchased on account, to a department store. Ignoring cost of goods sold, which journal entry should the department store prepare? Assume no discounts were offered. A) Debit Sales Revenue for S1,400 and credit Accounts Receivable for S1,400. B) Debit Sales Revenue for $1,400 and credit Cash for $1,400. C) Debit Sales Revenue for $1,400 and credit Sales Refunds Payable for $1,400 D) Debit Sales Refunds Payable for $1,400 and credit Accounts Receivable for $1,400. 9) Leno Company sells goods to the Fallon Company for $11,000. It offers credit terms of 3/10, n/30. If Fallon C a Open With Print Verizon 1:22 PM 73% XACCT 2110-04 CH 5 TKH Q 9) Leno Company sells goods to the Fallon Company for $11,000. It offers credit terms of 3/10, n/30. If Fallon Company pays the invoice within the discount period, Leno Company will record a debit to Cash in the amount of A) $11,330. B) S330 C) S10,670 D) $11,000. 10) On December1, Macy Company sold merchandise with a selling price of $3,000 on account to Mrs. Jorgensen, with terms 1/10, n/30. Using the gross method and ignoring cost of goods sold, what journal entry did Macy Company prepare on December 1? Macy expects no sales returns. A) Debit Cash for $3,000 and credit Accounts Receivable for 3,000 B) Debit Accounts Receivable for $2,970 and credit Cash for $2,970 C) Debit Accounts Receivable for $2,970 and credit Sales Revenue for $2,970 D) Debit Accounts Receivable for $3,000 and and credit Sales Revenue for $3,000 11) On December 1, Macy Company sold merchandise with a selling price of $9,000 on account to Mrs. Jorgensen, with terms 4/10, n/30. On December 3, Mrs. Jorgensen returned merchandise with a selling price of $700. Mrs. Jorgensen paid the amount due on December 9. What journal entry did Macy Company prepare on December 9 assuming the gross method is used? A) Debit Cash for $7,968 and credit Accounts Receivable for $7,968 B) Debit Sales Revenue for $7,968, debit Sales Discounts for $332, and credit Accounts Receivable for $8,300 C) Debit Sales Revenue for $8,300, credit Sales Discount for $332 and credit Cash for $7,968 D) Debit Cash for $7,968, debit Sales Discounts for S332, and credit Accounts Receivable for $8,300. 12) With regard to Accounts Receivable, a separate account for each customer is kept in a(n): A) control account. B) subsidiarvl a Open With Print Verizon 1:22 PM 73% XACCT 2110-04 CH 5 TKH Q 12) With regard to Accounts Receivable, a separate account for each customer is kept in a(n): A) control account. B) subsidiary ledger. C) general ledger D) control ledger 13) One way the risk of not collecting receivables can be managed is: A) have all customers pay by check B) separate cash-handling duties from record-keeping duties. C) separate cash-handling from the mailroom. D) have an imprest petty cash fund. 14) With regard to notes receivable, which of the following statements is CORRECT? A) Notes receivable are less formal contracts than accounts B) Notes receivable are also called promissory notes because a written promise to pay is not required. C) All notes receivable require the borrower to pledge collateral. D) The borrower signs a written promise to pay the lender a definite sum at the maturity date, with interest. 15) The journal entry to record lending money on a note receivable is: A) Debit Cash, credit Notes Receivable B) Debit Notes Receivable, credit Cash. C) Debit Cash, credit Accounts Receivable. D) Credit Accounts Receivable, credit Cash. 16) On December 31 of the current year, Jerome Company has an accounts receivable balance of S329,000 before any year-end adjustments. The Allowance for Doubtful Accounts has a $1,100 credit balance. The company prepares schedule for accounts receivable: the following aging otal Balance 20% What is the Allowance for Uncollectible Accounts at December 31 of the current year after A)$1,100 a Open With Print Verizon 1:22 PM 72% XACCT 2110-04 CH 5 TKH Q 16) On December 31 of the current year, Jerome Company has an accounts receivable balance of S329,000 before any year-end adjustments. The Allowance for Doubtful Accounts has a $1,100 credit balance. The company prepares the following aging schedule for accounts receivable: otal Balance 29,000 3% 20% What is the Allowance for Uncollectible Accounts at December 31 of the current year after adjustments? A) $1,100 B) S9,430 C) S10,530 D) S11,630 17) An aging-of-accounts-receivable indicates that the amount of uncollectible accounts is $3,910. The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of S600. The Accounts Receivable balance is $44,620. The amount of the adjusting entry for uncollectible accounts should be for: A) $600. B) S3,310. C) S3,910. D) $4,510 18) The balance in Accounts Receivable at the beginning of the year was S530,000. The balance in Accounts Receivable at the end of the year was S710,000. Customer accounts of $480,000 were written off. The company collected $4,100,000 from credit customers and $1,030,000 from cash customers. What are credit sales for the year? A) $4,400,000 B) S4,100,000 C) S4,580,000 D) $4,760,000 19) At the end of the year, Seidner Company has the following information available: a Open With Print Verizon 1:22 PM 72% XACCT 2110-04 CH 5 TKH Q 19) At the end of the year, Seidner Company has the following information available: counts Receivable Debit) The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense. What does the debit balance in the Allowance for Uncollectible Accounts indicate? A) The company overestimated the amount of uncollectible accounts at the end of the prior accounting period. B) The company underestimated the amount of uncollectible accounts at the end of the prior accounting period. C) Write-offs of uncollectible accounts increased dramatically in the current accounting period. D) B and C 20) At the end of the year, Smith Company has the following information available: redit sales rcturms and allowances Receivable Debit) 42 The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense. In the prior year, uncollectible accounts were estimated at 1% of credit sales. What action should Smith Company take in regards to uncollectible accounts at the end of the current year? A) increase the percentage in the percent-of-sales method B) reexamine credit policies, especially the extension of credit C) change to the direct write-off method D) A and EB 21) What amount does a company expect to collect from Accounts Receivable? A) gross amount of Accounts Receivable R) net realizahle value of Acconnts R a Open With Print Verizon 1:22 PM 72% XACCT 2110-04 CH 5 TKH Q 21) What amount does a company expect to collect from Accounts Receivable? A) gross amount of Accounts Receivable B) net realizable value of Accounts Receivable C) gross amount of Accounts Receivable minus Allowance for Uncollectible Accounts D) B and GC 22) The income statement approach to estimating uncollectible accounts is called the approach to estimating uncollectible accounts is called the method. The balance sheet method. A) direct write-off; allowance B) allowance; direct write-off C) percent-of-sales; aging-of-receivables D) aging-of-receivables; percent-of-sales 23) Tanya Company has the following information: Receivable, January I, 20 S230 Receivable, December 31, 2x400 edit Sales ite-of's of unc What are collections from customers during the current year? A) $1,626,000 B) S1,640,000 C) S2,626,000 D) S2,640,000 24) Lennon Company signed a 12-month, $53,000, 10% note on June 1, 2019. The amount of interest to be accrued on December 31, 2019, is: (Round your final answer to the nearest dollar.) A) $442. B) S2,650. C) S3,092 D) S5,300 25) The maturity value of a $55,000 note at 10% for 7 months is: (Round your final answer to the nearest dollar.) A) $55,000 B) S58,208 S57.750 a Open With Print ." Verizon 1:22 PM 72% XACCT 2110-04 CH 5 TKH Q 25) The maturity value of a S55.000 note at 10% for 7 months is: (Round your final answer to the nearest dollar.) A) $55,000 B) S58,208 C) S57,750. D) $60,500 26) The maturity value of a 6 month, 7% note for $70,000, dated May 12 is: (Round your final answer to the nearest dollar.) A) $2,450 B) S70,000. C) S74,900 D) $72,450 27) If the interest rate on a note is 12.5% and the principal was 57,000, what is the maturity value of the note, if the term of the note is 5 months? (Round your final answe dollar.) A) $57,000 B) S59,969 C) S64,12:5 D) $61,156 r to the nearest 28) On December 31, 2017, the lender on a S5,700, 120- day, 10% note dated November 5, 2017, will recognize: (Use a 365 day year and round your final answer to the nearest dollar.) A) interest receivable, $187 B) interest receivable, $87 C) interest payable, $187 D) interest payable, $87 29) If the interest rate on a note is 12% and the principal was 60,000, what is the interest expense for the 8 month note? (Round your final answer to the nearest dollar.) A) $3,600 B) S4,800 C) S7,200 D) $7,800 30) Emma Jones Company has the following information available: a Open With Print ." Verizon 1:22 PM XACCT 2110-04 CH 5 TKH Q 30) Emma Jones Company has the following information available: counts Payable Investments ncome Taxes Payable 2000 Notes Payable 20000 5,000 Did the quick ratio improve from 2018 to 2019? A) No. B) Yes. C) It stayed the same. D) There is not enough information. 31) Excalibur Company has calculated the following ratios /31/201912/31/201 urrent Ratio ick Ratio 225 Did the company's liquidity improve in 2019? A) No. B) Yes, the ratios improved. C) There is conflicting information. Two ratios improved and one ratio declined D) There is not enough information to assess. 32) Rockford Moving Company has calculated the following ratios 2/31/20: 1/201 urrent Ratio ollection Did the company's liquidity improve in 2019? A) No. B) Yes. C) There is conflicting information. One ratio improved and two ratios did not improve. a Open With Print Verizon 1:22 PM 72% XACCT 2110-04 CH 5 TKH Q 32) Rockford Moving Company has calculated the following ratios: urrent Ratio 30 Did the company's liquidity improve in 2019? A) No. B) Yes. C) There is conflicting information. One ratio improved and two ratios did not improve. D) There is not enough information to assess. 33) Days' sales in receivables is also called: A) days' sales outstanding B) collection period C) accounts receivable turnover D) A and B 34) Accounts receivable turnover A) days' sales in receivables. B) average collection period. C) average net accounts receivable. D) net credit sales divided by average net accounts receivable. equals: 35) The Daisy Company had net credit sales of $830,000 for the year. Cash sales for the year were $1,170,000. Its receivables at the beginning of the year were S45,000 and at the end of the year they had increased to $90,000. The Daisy Company has credit terms of net 30 days. Compute the days' sales outstanding and evaluate the ratio as strong or weak. (Round any intermediary calculations to two decimal places and your final answer to the nearest day) A) Days' sales outstanding 30 days; strong B) Days' sales outstanding 30 days; weak C) Days' sales outstanding 12 days; strong D) Days' sales outstanding 12 days; weak a Open With Print