Ch07

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Unformatted text preview: CHAPTER 7 CASH AND RECEIVABLES IFRS questions are available at the end of this chapter. TRUE-FALSE Conceptual Answer No. Description T 1. Items considered cash. F 2. Items considered cash. F 3. Items considered cash. F 4. Cash equivalents definition. F 5. Bank overdrafts. T 6. Cash equivalents. F 7. Classification of receivables. F 8. Items considered trade receivables. T 9. Trade discount uses. T 10. Sales discounts. T 11. Valuation of receivables. F 12. Percentage-of-receivables approach. F 13. Percentage-of-sales method. T 14. Reporting notes receivable. F 15. Stated interest rate vs. effective rate. F 16. Classification of notes receivable. T 17. Recourse liability. F 18. Buying receivables with recourse. T 19. Selling receivables with recourse. F 20. Computing receivables turnover. MULTIPLE CHOICE Conceptual Answer No. Description d 21. Identification of cash items. b 22. Identification of cash items. d 23. Classification of travel advance. d P 24. Items included as cash. b 25. Identification of cash items. a 26. Classification of post-dated checks. b 27. Classification of postage stamps. d 28. Compensating balance definition. b 29. Classification of cash restricted for plant expansion. d S 30. Cash equivalent definition. d 31. Classification of bank overdraft. d 32. Classification of compensating balances. d 33. Definition of trade receivables. d 34. Identification of trade receivables. c S 35. Presentation of nontrade receivables. Test Bank for Intermediate Accounting, Fourteenth Edition d S 36. Cash discount definition. MULTIPLE CHOICE Conceptual (cont.) Answer No. Description d P 37. Trade discount uses. a 38. Classification of sales discounts. d 39. Reasons for trade discounts. c 40. Accounting for cash discounts and trade discounts. a 41. Theoretically correct approach for cash discounts. c 42. Accounts receivable valuation problems. d 43. Reason allowance method is preferable. a 44. Allowance method concept. b 45. Accounting for bad debts and earnings management. c 46. Recording bad debt expense. a 47. Journal entry for writing off an account. d 48. Journal entry for collection of an account previously written off. c 49. Valuation of short-term receivables. d 50. Bad debt provision and the matching concept. a 51. Bad debts as a percentage of sales. b 52. Bad debts as a percentage of sales. a 53. Bad debts as a percentage of receivables. d 54. Financial statement effect of a note recorded incorrectly. b 55. Imputed interest description. c 56. Reason a company sells receivables. d 57. Transfer of receivables as a sale. a 58. Definition of selling receivables with recourse. c 59. Factoring accounts receivable without recourse. c S 60. Classification of accounts and notes receivable....
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