On august 1 kim company accepted a 90-day note receivable

Assignment Help Accounting Basics

Reference no: EM13567714

1.An alternative name for Bad Debt Expense is

a. Deadbeat Expense.

b. Uncollectible Accounts Expense.

c. Collection Expense.

d. Credit Loss Expense

2.One of the weaknesses of the direct write-off method is that it

a. violates the matching principle.

b. is too difficult to use for many companies.

c. understates accounts receivable on the balance sheet.

d. is based on estimates.

3.To record estimated uncollectible receivables using the allowance method, the adjusting entry would be a

a. debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.

b. debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.

c. debit to Loss on Credit Sales and a credit to Accounts Receivable.

d. debit to Bad Debs Expense and a credit to Allowance for Doubtful Accounts.

4.Given the following information, compute Accounts Receivable Turnover:

https://west.cengagenow.com/ilrn/books/waac25t/images/ch09/waac25t_ch09_mc9_070.gif

The maturity value of a note receivable is always the same as its face value.

a. True

b. False

5.When does an account become uncollectible?

a. at the end of the fiscal year

b. when discount is availed on notes receivable

c. when accounts receivable is converted into notes receivable

d. there is no general rule for when an account becomes uncollectible

6.When a company receives an interest-bearing note receivable, it will

a. debit Notes Receivable for the maturity value of the note.

b. credit Notes Receivable for the maturity value of the note.

c. credit Notes Receivable for the face value of the note.

d. debit Notes Receivable for the face value of the note.

7.On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the note were $20,000 face value and 6% interest. On October 30, the journal entry to record the collection of the note should include a

a. debit to Notes Receivable for $20,000.

b. credit to Interest Revenue for $300.

c. debit to Interest Receivable for $300.

d. credit to Notes Receivable for $20,300.

8.The amount of the promissory note plus the interest earned on the due date is called the

a. maturity value.

b. face value.

c. interest value.

d. issuance value.

Reference no: EM13567714

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