Chapter 8 wiley practice

Chapter 8 wiley practice - Chapter 8 A receivable that is...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 8 A receivable that is evidenced by a formal instrument and that normally requires the payment of interest is: a classified receivable. an account receivable. a trade receivable. a note receivable. Kersee Company on June 15 sells merchandise on account to Soo Eng Co. for $1,000, terms 2/10, n/30. On June 20 Eng Co. returns merchandise worth $300 to Kersee Company. On June 24 payment is received from Eng Co. for the balance due. What is the amount of cash received? ($1,000-$300) x 2% = $686 Accounts and notes receivable are reported in the current assets section of the balance sheet at: lower-of-cost-or-market value. cash (net) realizable value. net book value. invoice cost. Net credit sales for the month are $800,000. The accounts receivable balance is $160,000. The allowance is calculated as 7.5% of the receivables balance using the percentage of receivables basis. If the Allowance for Doubtful Accounts has a credit balance of $5,000 before adjustment, what is the balance after adjustment? $7,000 $17,000 $31,000 $12,000 accounts receivable $160,000 x allowance as 7.5% In 2010 Patterson Wholesale Company had net credit sales of $750,000. On January 1, 2010, Allowance for Doubtful Accounts had a credit balance of $18,000. During 2010, $30,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $200,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2010? $75,000 $32,000 $30,000 $20,000 An analysis and aging of the accounts receivable of Raja Company at December 31 reveal these data: Accounts Receivable $800,000 Allowance for doubtful accounts per books before adjustment (credit) 50,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Amounts expected to become uncollectible 65,000 What is the cash realizable value of the accounts receivable at December 31, after adjustment? $685,000 $750,000 $800,000 $735,000 $800,000-$65,000 = $735,000 Which of these statements about promissory notes is incorrect ? A promissory note is more liquid than an account receivable. A promissory note is not a negotiable instrument. The party making the promise to pay is called the maker. The party to whom payment is to be made is called the payee. Michael Co. accepts a $1,000, 3-month, 12% promissory note in settlement of an account with Tani Co. The entry to record this transaction is: Notes Receivable 1,030 Accounts Receivable Notes Receivable 1,020 Accounts Receivable Notes Receivable 1,000 Sales Notes Receivable 1,000 Accounts Receivable Schleis Co. holds Murphy Inc.'s $10,000, 120-day, 9% note. The entry made by Schleis Co. when the note is collected, assuming no interest has previously been accrued, is: Accounts Receivable 10,300 Notes Receivable Interest Revenue Cash 10,300 Notes Receivable Interest Revenue Cash 10,300 Notes Receivable Cash 10,000 Notes Receivable Notes receivable = ($10,000 x
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 11/03/2011 for the course ACCOUNTING ac 201 at Montgomery.

Page1 / 11

Chapter 8 wiley practice - Chapter 8 A receivable that is...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online