1aexam3sample - ACCT1A Sample Exam 3 Name: _ Date: _ 1. The...

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ACCT1A Sample Exam 3 Name: __________________________ Date: _____________ 1. The maturity date of a note receivable: A) Is the day of the credit sale. B) Is the day the note was signed. C) Is the day the note is due to be paid. D) Is the date of the first payment. E) Is the last day of the month. 2. The amount of bad debt expense can be estimated by: A) The percent of sales method. B) The percent of accounts receivable method. C) The aging of accounts receivable method. D) Only b and c. E) Bad debt expense can be estimated by any of the three methods listed above. 3. Dell reported net sales of $8,739 million and average accounts receivable of $864 million. Its accounts receivable turnover is: A) 0.90. B) 10.1. C) 36.1. D) 50.0. E) 3,686. 4. A promissory note: A) Is a short-term investment for the maker. B) Is a written promise to pay a specified amount of money at a certain date. C) Is a liability to the payee. D) Is another name for an installment receivable. E) Cannot be used in payment of an account receivable. 5. An accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period of the sales, and (2) reports accounts receivable at the amount of cash to be collected is the: A) Allowance method of accounting for bad debts. B) Aging of notes receivable. C) Adjustment method for uncollectible debts. D) Direct write-off method of accounting for bad debts. E) Cash basis method of accounting for bad debts. 6. The accounts receivable turnover is calculated by: A) Dividing net sales by average accounts receivable. B) Dividing net sales by average accounts receivable and multiplying by 365. C) Dividing average accounts receivable by net sales. D) Dividing average accounts receivable by net sales and multiplying by 365. E) Dividing net income by average accounts receivable. 7. Electron borrowed $75,000 cash from TechCom by signing a promissory note. TechCom's entry to record the transaction should include a: A) Debit to Notes Receivable for $75,000. B) Debit to Accounts Receivable for $75,000. C) Credit to Notes Receivable for $75,000. D) Debit Notes Payable for $75,000. E) Credit to Sales for $75,000. Page 1
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Sample Exam 3 8. A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: All sales are made on credit. Based on past experience, the company estimates 0.5% of credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? A) $925 B) $1,225 C) $4,200 D) $4,500 E) $45,000 9. Western Company sold $700,000 of its accounts receivable and was charged a 3% factoring fee. How should Western Company record this transaction in the journal? A)
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1aexam3sample - ACCT1A Sample Exam 3 Name: _ Date: _ 1. The...

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