7. MC.07-046

The data presented below are for Falconi, Inc. for 2017.

Credit sales during the year	$2,100,000
Accounts receivableDecember 31, 2017	295,000
Allowance for doubtful accountsDecember 31, 2017	28,000
Bad debts expense for the year	17,000

What is the effect on net accounts receivable when Falconi records its estimate for bad debts expense using the allowance method?

a.Net accounts receivable stay the same.

b.Net accounts receivable increase.

c.Net accounts receivable decrease.

d.Net accounts receivable both increase and decrease.

8. MC.07-084

Where can the amounts needed to compute the accounts receivable turnover ratio be found?

a.The balance sheet

b.The statement of cash flows

c.The income statement

d.Both the income statement and balance sheet

9. MC.07-085

What can a company try to improve its accounts receivable turnover ratio?

a.Reduce the number of employees working in the credit department

b.Lower its selling prices

c.Increase its sales force

d.Give customers credit terms of 2/10, n/30 rather than 1/10, n/30

12. MC.08-043

Which of the following accounts would not be reported in the Property, Plant, and Equipment section of a balance sheet?

a.Depreciation ExpenseBuildings

b.Buildings

c.Accumulated DepreciationBuildings

d.Land

30. MC.09-054

If a company borrows money from its bank and the bank deducts the interest in advance, the company would record the amount of the interest deduction as

a.an expense.

b.a loss.

c.prepaid interest.

d.a discount.