1. Nontrade receivables do not include:

a) Sales to customers on a deferred payment plan.

b) Loans to employees

c) Income tax refund receivable

d) Advances to affiliated companies

2. When you use an aging schedule approach for estimating uncollectible accounts:

a) Bad debts expense is measured indirectly, and the Allowance for un-collectibles balance is measured directly.

b) Bad debts expense is measured indirectly, and the Allowance for un-collectibles balance is measured indirectly.

c) Bad debts expense is measured directly, and the Allowance for un-collectibles balance is measured directly.

d) Bad debts expense is measured directly, and the Allowance for un-collectibles balance is measured indirectly.

3. Gershwin Wall covering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record this reduction by crediting accounts receivable and debiting:

a) Sales

b) Sales discounts

c) Sales returns

d) Sales allowances

4. 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:

a) Future value of an ordinary annuity of 1

b) Future value of an annuity due of 1

c) Future value of 1

d) Present value of an annuity due of 1

5. Accounts receivable are normally reported at the:

a) Present value of future cash receipts.

b) Current value plus accrued interest.

c) Expected amount to be received.

d) Current value less expected collection costs.

Answer rating: 100% (QA)

1 a Sales to customers on a deferred payment plan 2 ... View the full answer