Accounting Final

A note receivable due in 18 months is listed on the balance sheet under the caption

• Fixed assets

• Investments

• Long-term liabilities

• Current assest

1. 
   

   The receivable that is usually evidenced by a formal, written instrument of credit is a(n)

• income tax receivable

• note receivable

• trade receivable

• accounts receivable

1. 
   

   Which of the following receivables would not be classified as an “other receivable”?

• interest receivable

• advance to an employee

• refundable income tax

• notes receivable

Question Content Area

Notes or accounts receivable that result from sales transactions are often called

a. merchandise receivables

b. nontrade receivables

c. trade receivables

d. sales receivables

• merchandise receivables

• nontrade receivables

• trade receivables

• sales receivables

1. 
   Question Content Area

   Which of the following statements is not true?

   a. Current assets are normally reported in order of their liquidity.

   b. Disclosures related to receivables are reported in the financial statement notes.

   c. All receivables that are expected to be realized in cash beyond 265 days are reported in the "Noncurrent assets" section.

   d. Cash and cash equivalents are the first items reported under "Current assets."

• current assets are normally reported in order of their liquidity

• 1. Disclosures related to receivables are reported in the financial statement notes.

• 1. All receivables that are expected to be realized in cash beyond 265 days are reported in the "Noncurrent assets" section.

• 1. Cash and cash equivalents are the first items reported under "Current assets."

Question Content Area

The term "receivables" includes all

a. cash to be paid to creditors

b. cash to be paid to debtors

c. money claims against other entities

d. merchandise to be collected from individuals or companies

• cash to be paid to creditors

• cash to be paid to debtors

• money claims against other entities

• merchandise to be collected from individuals or companies

1. 
   

   If collection of an other receivable is expected beyond 1 year, it is classified as a

   
   

• 1. current asset and reported under "Other receivables"

• 1. noncurrent asset and reported under "Other receivables"

• 1. noncurrent asset and reported under "Investments"

• 1. current asset and reported under "Investments"

1. When does an account become uncollectible?

• 1. when accounts receivable is converted into notes receivable

• 1. There is no general rule for when an account becomes uncollectible

• 1. when a discount is available on notes receivable

• 1. at the end of the fiscal year

The direct write-off method of accounting for uncollectible accounts

• is often used by small companies and companies with few receivables

• emphasizes balance sheet relationships

• emphasizes the matching of expenses with revenues

• emphasizes cash realizable value

Under the direct write-off method of accounting for uncollectible accounts, Bad Debt Expense is debited

• when an account is determined to be worthless

• when a credit sale is past due

• whenever a predetermined amount of credit sales have been made

• at the end of each accounting period