1. The ratio that is used to assess the liquidity of accounts receivable is the

a.Inventory turnover ratio

b.Quick ratio

c.Receivables turnover ratio

d.Current ratio

2.What is the normal journal entry for recording a loss on impairment under the allowance method?

a.Debit loss on impairment, credit Allowance for Expected Credit Losses

b.Debit Allowance for Expected Credit Losses, credit Loss on Impairment

c.Debit Allowance for Expected Credit Losses, credit Accounts Receivables

d.Debit Accounts Receivables, credit Allowance for Expected Credit Losses

3.“Sales Return and Allowances” are reported as

a.A deduction from Sales Revenue

b.An expense

c.A deduction from Accounts Receivable

d.An addition to Accounts Receivable

4.Under the allowance method of recognizing uncollectible accounts, the entry to recognize the collection of a previously written off uncollectible account

a.decreases the allowance for the allowance for expected credit losses

b.has no effect on the allowance for expected credit losses

c.increase the allowance for expected credit losses

d.increases net income.

5.“Allowance for Expected Credit Losses” is a

a.Liability account

b.Contra account

c.Current asset

d.Expense account

Answer rating: 100% (QA)

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