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WorksheetsPRELIM Quiz 2
Total questions: 20
Worksheet time: 25mins
Goods with a list price of P1,000 are sold at trade discount of 30% and terms of 2/10 and n/30. What is the invoice amount?
P686
1000
P700
1300
The adjusting entry to eliminate a credit balance in a receivable account or a debit balance in a payable account
decreases total receivables
increases total receivables
choice (b) for receivable account, choice (a) for a payable account
does not affect total receivables
Entity X's total accounts receivable is P100, net of P5 credit balance in customer A's account. The adjusted balance of accounts receivable is
P105
P95
P100
P0
Accounts receivable are subsequently measured at their recoverable historical costs. Which of the following methods of estimating uncollectible accounts is in conformance with the PFRSs?
Allowance method
Direct write-off
a or b
none of these
Under the allowance method of recognizing bad debts on trade accounts receivable, the effect of writing off an account to an entity's working capital is
increase
decrease
either a or b depending on the current level of the entity's working capital
no effect
From the give data in the picture, how much is the total trade receivables?
123,000
132,000
143,000
154,000
On December 27, 20x1, ABC Co. received a sale order for a credit sale of goods with selling price of ₱3,000. The goods were shipped by ABC on December 31, 20x1 and were received by the buyer on January 2, 20x2. The related shipping costs amounted to ₱50. ABC Co. collected the receivable on January 5, 20x2. If the term of the sale is FOB destination, freight collect, how much net cash is collected on January 5, 20x2?
3,050
3,000
2,980
2950
From the give data in the picture, how much is the recoverable historical cost of accounts receivable?
498,370
502,630
486,780
478,970
ABC Co. has the following information before any year-end adjustment.
Accounts receivable, Dec. 31 600,000
Allowance for doubtful accounts, Jan. 1 18,000 (Dr.)
Percentage of receivables 2%
Write-offs and recoveries during the year amounted to ₱22,800 and ₱3,000, respectively. How much is the bad debts expense for the year?
13,800
26,800
49,800
52,800
How much is the balance of the allowance for doubtful accounts on January 1, 20x1?
12600
18900
19200
23400
Present value is
the value now of a future amount.
the amount that must be invested now to produce a known future value
always smaller than the future value
all of these
A higher interest rate results to
increased amount of present value
decreased amount of present value
same amount of present value
Answer cannot be determined due to insufficient data
An entity sells goods either on cash basis or on 6-month installment basis. On January 1, 20x1, goods with cash price of ₱50,000 were sold at an installment price of ₱75,000. Which of the following statements is correct?
Net receivable of ₱75,000 is recognized on the date of sale
Net receivable of ₱50,000 is recognized upon full payment of the total price
The ₱20,000 difference between the cash price and installment price is recognized as interest income on the date of sale
Net receivable of ₱50,000 is recognized on the date of sale
Statement 1: Interest receivable is computed by multiplying the carrying amount of a note by the effective interest rate.
Statement 2: All interest-bearing notes need not be discounted.
Only statement 1 is correct
Only statement 2 is correct
Both statement are incorrect
Both statement are correct
The concept that best supports the discounting of notes to their present values is
time value of money
matching
accrual basis
legal form over substance
On January 1, 20x1, ABC Co. sold a transportation equipment with a historical cost of ₱1,000,000 and accumulated depreciation of ₱300,000 in exchange for cash of ₱100,000 and a noninterest-bearing note receivable of ₱800,000 due on January 1, 20x4. The prevailing rate of interest for this type of note is 12%.
How much is the interest income in 20x1?
68,331
76,532
85,714
96,000
On January 1, 20x1, Mojo Co. sold transportation equipment with a historical cost of ₱20,000,000 and accumulated depreciation of ₱7,000,000 in exchange for cash of ₱500,000 and a noninterest-bearing note receivable of ₱8,000,000 due in 4 equal annual installments starting on December 31, 20x1 and every December 31 thereafter. The prevailing rate of interest for this type of note is 12%.
How much is the current portion of the receivable on December 31, 20x1?
1,271,036
1,423,560
3,380,102
1,594,388
On January 1, 20x1, ABC Co. sold transportation equipment with a historical cost of ₱12,000,000 and accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January 1 thereafter. The prevailing rate of interest for this type of note is 12%.
How much is the carrying amount of the receivable on December 31, 20x1?
1,690,510
892,857
2,690,051
1,594,388
On January 1, 20x1, ABC Co. sold inventory costing ₱1,800,000 with a list price of ₱2,200,000 and a cash price of ₱2,000,000 in exchange for a ₱2,400,000 noninterest-bearing note due on December 31, 20x3.
How much is the initial measurement of the receivable?
1,800,000
2,200,000
2,000,000
2,400,000
On January 1, 20x1, ABC Co. sold inventory costing ₱1,800,000 with a list price of ₱2,200,000 and a cash price of ₱2,000,000 in exchange for a ₱2,400,000 noninterest-bearing note due on December 31, 20x3.
How much is the carrying amount of the receivable on December 31, 20x1?
(*use up to 6 decimal PV factor)
2,125,390
2,135,341
2,098,343
2,000,000
