View the step-by-step solution to: Revenue is realized. Any receivable is collected.

This question was answered on Dec 12, 2010. View the Answer
Revenue is realized.
Any receivable is collected.
Collection is reasonably certain.
Collection is absolutely assured.

11. (TCO 5) Slick's Used Cars sells pre-owned cars on the installment basis and carries its own notes because its customers typically cannot qualify for a bank loan. Default rates tend to be high or unpredictable. However, in the event of nonpayment, Slick's can usually repossess the cars without loss. The revenue method Slick would use is the: (Points: 5)
Installment sales method.
Point of sales method.
Cost recovery method.
Answers A and/or C is correct.

12. (TCO 5) The rationale for adoption of the percentage-of-completion method is that: (Points: 5)
Results are more conservative.
It provides a measure of periodic accomplishment.
It is a better match with legal ownership.
It results in a lower income tax.

13. (TCO 6) Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would like the account to have a balance of $50,000 five years from now. How much must Carol deposit to accomplish her goal? (Points: 5)

14. (TCO 6) George Jones is planning on a cruise for his 70th birthday party. He wants to know how much he should set aside at the beginning of each month at 6% interest to accumulate the sum of $4,800 in five years. He should use a table for the: (Points: 5)
Future value of an ordinary annuity of 1.
Future value of an annuity due of 1.
Future value of 1.
Present value of an annuity due of 1.

15. (TCO 7) Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. Upon receipt of the material, Tom's would credit accounts receivable and debit: (Points: 5)
Sales discount.
Sales returns.
Sales allowances.

16. (TCO 7) Collection of accounts receivable that previously have been written off results in an increase in cash and an increase in: (Points: 5)
Accounts receivable.
Allowance for uncollectible accounts.
Bad debts expense.
Retained earnings.

17. (TCO 8) In a perpetual inventory system, the cost of inventory sold is: (Points: 5)
Debited to accounts receivable.
Credited to cost of goods sold.
Debited to cost of goods sold.
Not recorded at the time.

18. (TCO 8) In a period when costs are rising and inventory quantities are stable, the inventory method that would result in the highest ending inventory is: (Points: 5)
Weighted average.
Moving average.

19. (TCO 8) In applying LCM, market cannot be: (Points: 5)
Less than net realizable value.
Greater than the normal profit.
Less than the normal profit margin.
Greater than net realizable value.

20. (TCO 4) Cash may not include: (Points: 5)
Foreign currency.
Money orders.
Restricted cash.
Undeposited customer checks.

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Dear Student, Please find... View the full answer


Revenue is realized.
Any receivable is collected.
Collection is reasonably certain.
Collection is absolutely assured.
11. (TCO 5) Slick's Used Cars sells pre-owned cars on the installment basis and...

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