Question $1$: Multiple Choice Required: circle or indicate the correct response $1.$ Which of the following are reasons why companies should monitor accounts receivable levels carefully? a$.$ to maximize costs of collection b$.$ to encourage prompt payment from their customers c$.$ to minimize the stress on working capital and related bank debt d$.$ b$)$ and c$)$ only e$.$ All of the above are reasons why companies should monitor accounts receivable. $2.$ If a company uses the gross method of recording accounts receivable, then cash discounts taken should be reported as a$.$ A deduction from sales in the income statement. b$.$ an item of "other expense" in the income statement. c$.$ A deduction from accounts receivable in determining the net realizable value of accounts receivable. d$.$ Sales discounts forfeited in the cost of goods sold section of the income statement. $3.$ What is the single most important indicator used to identify impaired accounts receivable? a$.$ the customer$$s payment history b$.$ the age of the accounts c$.$ credit reports and references d$.$ industry in which the company operates $4.$ An estimated loss on purchase commitments is reported a$.$ under other expenses and losses. b$.$ as a deduction from purchases. c$.$as a current liability. d$.$ as an extraordinary item. $5.$ If a unit of inventory has declined in value below original cost, but the market value exceeds net realizable value, the amount to be used for purposes of inventory valuation is a$.$ net realizable value. b$.$ original cost. c$.$ market value. d$.$ net realizable value less a normal profit margin. $6.$ Generally, transaction costs are a$.$ capitalized when investments are accounted for using a cost$-$based model. b$.$ capitalized when investments are accounted for using a fair value model. c$.$ always expensed. d$.$ never expensed. $7.$ To calculate the amount of interest to recognize each period for a bond investment $($unless it held for trading purposes$),$ a$.$ ASPE requires the use of the effective$-$interest method. b$.$ IFRS requires the use of the effective$-$interest method. c$.$ IFRS allows the use of either the effective$-$interest or the straight$-$line method. d$.$ASPE requires the use of the straight$-$line method