Accounts Receivable Test
The Method of recording bad debt expenses is known as the____________________
a. Bad Debt Method
b. Allowance Method
c. Expenses Method
Merchandise returned by a customer for a credit on account or a cash refund is called __________
a. Credit Memorandum
b. Debit Memorandum
c. Sales Allowances
d. Sales Return
In which of the financial statements will the sales discount be reflected?
a. Balance Sheet
b. Post-closing Trial Balance
c. Income Statement
d. Statement of the Owner’s Equity
A system where inventory is not kept on hand but is ordered to fulfill orders once needed is
a. Just In Time
b. As Needed
Why is “day’s sales in Accounts Receivable” important to calculate?
a. It tells you the total day’s sales that were made
b. It is required by the SEC for all public companies
c. It indicates the company’s overall financial health
d. It makes comparison with prior results possible to see improvements or non improvements, and lets a company know how long people are taking to pay on average
In accounting for the transfer of financial assets, which of the following is the approach underlying the accounting prescribed by SFAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities?
a. Financial-components approach.
b. The risks-and-rewards approach.
c. Inseparable-unit approach.
d. Linked-presentation approach.
In which of the following cases would revenue be recorded?
a. A customers signs a 6 month contract
b. A quote is generated for a potential customer
c. A quote is generated for an existing customer
d. Services are provided to a customer
Allowance for doubtful accounts is ________
a. the total of the accounts that will not be collected
b. a contingent liability
c. a contra-owner’s equity account like withdrawals
d. the estimated amount of Accounts Receivable that will not be collected