Accounts receivable are valued based on their ________.

		estimated amount collectible
		lower-of-cost-or-market value
		fair value
		historical cost

Notes Receivable provide all of the following EXCEPT:

		Certainty of collection
		Extended payment terms
		A formal basis for charging interest
		Negotiability

Which of the following is true regarding sales returns and sales allowances?

		Sales returns are variable consideration; sales allowances are fixed consideration.
		Sales returns represent a price reduction made to encourage customers to keep merchandise; sales allowances are granted for merchandise taken back.
		Two entries are necessary to record estimated sales returns; one entry is required to record estimated sales allowances.
		Companies must estimate sales allowances; sales returns do not have to be estimated.

How does a sale of accounts receivable differ from the use of accounts receivable as collateral for a loan?

		With a sale of receivables, the operating cycle is shortened, but with a collateralized loan, the operating cycle is extended.
		With a collateralized loan, the borrower records a note payable, but in a sale, the seller records a note receivable.
		With a collateralized loan, the borrower recognizes potential credit losses, but in a sale with recourse, the seller does not recognize potential credit losses.
		With a collateralized loan, the receivables remain under the control of the borrower but in a sale, the seller no longer has title to the receivables.