Multiple Choice Question Select the right answer (only one possible answers, unless otherwise stated). 1 Doubtful debts


Multiple Choice Question
Select the right answer (only one possible answers, unless otherwise stated).
1 Doubtful debts represent
(a) Liabilities which are challenged by one of the parties
(b) Receivables which might not be collected
(c) All of these
(d) None of these
2 Accounts receivable is equivalent to
(a) Trade creditors
(b) Trade partners
(c) Trade accounts payable
Trade accounts receivable
All of these
(f) None of these
3 A bank overdraft should be
(a) Included in the financial fixed assets
(b) Reported as a current asset
(c) Reported as a current liability
(d) Netted against positive cash balances at other banks
(e) None of these
4 The direct write-off method is consistent with the matching accounting principle while the allowance method is not
(a) True
(b) False
5 Accounts receivable are generally valued at the
(a) Amounts invoiced to customers
(b) Net realizable value
(c) Present value of future cash flows
(d) None of these
6 Given the following information, determine the accounts receivable turnover for a retailer (two possible answers)
Beginning accounts receivable
accounts receivable
Ending cash
Cash sales
Credit sales
Net income
(a) 15
(b) 7.5
(c) 10
(d) 17
(e) 8.5
(f) 11.33
(g) 1
(h) 2
(i) 2.5
(j) 3
(k) None of these
7 An accounts receivable with a 100 percent probability of being collected is a cash equivalent
(a) True
(b) False
8 When a note receivable is discounted
(a) The note is removed from the assets
(b) The note is maintained in the assets and a liability is recorded
(c) The note is removed from the assets or maintained in the assets with a liability recorded, depending on the national GAAP
(d) None of these
9 When a provision (allowance) is no longer necessary
(a) An expense account is decreased
(b) A revenue account is increased GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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