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c. Accounts receivable turnover. d. Not a meaningful calculation since sales and receivables are both debits. e. Receivables ageing. FeedbackThe correct answer is: Accounts receivable turnover.Question 8CorrectMark 10.00 out of 10.00Flag questionQuestion textWhich of the following statements is false?Select one:a. The Allowance for Uncollectible Accounts reduces accounts receivable to their net realizable value. b. None of these. c. Any existing balance in the Allowance for Uncollectible Accounts is ignored in calculatingthe uncollectible accounts expense under the percentage-of-sales method except that the allowance account must have a credit balance after adjustment. d. The percentage-of-receivables method may use either an overall rate or a different rate for each age category.
e. A write-off of an account reduces the net amount shown for accounts receivable on the balance sheet. Correct. A write-off of an account receivable results in a debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable for the same amount. The net amount (accounts receivable minus allowance for uncollectible accounts) does not change.FeedbackThe correct answer is: A write-off of an account reduces the net amount shown for accounts receivable on the balance sheet.Question 9CorrectMark 10.00 out of 10.00Flag questionQuestion textHunt Company estimates uncollectible accounts using the percentage-of-receivables method and expects that 5 percent of outstanding receivables will be uncollectible for 2014. The balance in Accounts Receivable is $200,000, and the allowance account has a $3,000 credit balance before adjustment at year-end. The uncollectible accounts expense for 2014 will be:Select one:a. $10,000. b. None of these. c. $7,000. Correct. The uncollectible accounts expense for 2010 is computed as follows: 1. Allowance balance after adjustment ($200,000 X 0.05) $10,000 2. Balance before adjustment (3,000) 3. Uncollectible accounts expense $7,000.d. $9,850.
e. $13,000. FeedbackThe correct answer is: $7,000.Question 10CorrectMark 10.00 out of 10.00Flag questionQuestion textMaxwell Company sells goods and services gross of sales taxes. In other words, the sales taxes are included in the sales price. The sales tax rate is 6 percent. At the end of the current period, theRevenue account has a balance of $265,000. The amount of sales tax payable is:Select one:a. $15,000. Correct. $265,000/1.06 = $250,000. $265,000 - $250,000 = $15,000.b. $15,900. c. $12,000. d. $18,000. FeedbackThe correct answer is: $15,000.Question 11CorrectMark 6.00 out of 6.00
Flag questionQuestion text(T / F) Credit cards are of two types — nonbank credit cards (such as American Express) and bank credit cards (such as VISA).Select one:True False FeedbackCorrect.The correct answer is 'True'.(T / F) Horizontal analysis is the calculation of dollar changes or percentage changes in comparative statement items or totals. Use of this analysis helps detect changes in a company's performance and highlights trends.