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WorksheetsAcct 1101 Ch 7 Quiz
Total questions: 10
Worksheet time: 50mins
Name
Class
Date
1.
Which accounting principal causes the need to record uncollectible accounts expense in the same period as the related revenue?
a)
Historical cost
b)
Matching
c)
Estimating
d)
Reliability
2.
The write off of an uncollectible account will decrease the company's net realizable value of accounts receivable.
a)
True
b)
False
3.
Which method is allowed by GAAP for calculating uncollectible accounts expense?
a)
Percent of receivables
b)
Percent of revenue
c)
Accountant's best guess
d)
Aging of accounts receivable
4.
The aging method of estimating uncollectible accounts expense is based on the assumption that the longer an account receivable remains outstanding, the less likely it is to be collected.
a)
True
b)
False
5.
Who is the payee of a promisorry note?
a)
The borrower.
b)
The person to whom the note is made payable.
c)
The person responsible for making loan payments.
d)
The person who will receive the loan payments.
6.
The formula for calculating interest revenue is different than the formula for calculating interest expense.
a)
True
b)
False
7.
A cash outflow from notes receivable principal is what type of activity on the cash flow statement?
a)
Operating
b)
Investing
c)
Financing
8.
When a company allows customers to pay with a credit card, the company receives the cash
a)
immediately at the time of the transaction.
b)
from the customer at a later date.
c)
from the credit card company at a later date.
d)
never.
9.
Which of the following is true regarding accounts receivable ratios?
a)
A company with a higher accounts receivable turnover ratio is more efficient at collecting cash.
b)
A company with a higher days to collect accounts receivable ratio is more efficient at collecting cash.
10.
The operating cycle is the average time it takes a business to convert inventory to accounts receivable plus
a)
365
b)
the time it takes to sell inventory.
c)
the time it takes for a company to receive its inventory from the supplier.
d)
the time it takes to convert accounts receivable back into cash.
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