This is an ONLINE QUIZ. It will be immediately graded and the
results presented to you upon depressing the SUBMIT ANSWERS BUTTON
at the end of the quiz.
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1. Cornell corporation had credit sales of $1,000,000. The
average number of days for its receivables to be outstanding
is 90 days. Cornell's average accounts receivable must be:
A. $750,000
B. $500,000
C. $250,000
D. $200,000
E. $100,000
2. THE ENTRY TO CLOSE THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
AT THE END OF THE PERIOD WOULD INCLUDE:
A. A DEBIT TO THE INCOME SUMMARY.
B. A CREDIT TO THE INCOME SUMMARY.
C. A DEBIT TO COST OF GOODS SOLD.
D. A CREDIT TO THE COST OF GOODS SOLD.
E. THIS ACCOUNT IS NOT CLOSED AT THE END OF THE PERIOD.
3. FULTON HAD WRITTEN OFF A $500 RECEIVABLE FROM MAX AS BEING
UNCOLLECTIBLE. SUBSEQUENT TO THE WRITE-OFF, MAX PAID ITS
BILL IN FULL. WHICH OF THE FOLLOWING ENTRIES WOULD NOT BE
RECORDED BY FULTON IN ACCOUNTING FOR THE COLLECTION FROM MAX?
A. A DEBIT TO ACCOUNTS RECEIVABLE
B. A DEBIT TO THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
C. A DEBIT TO CASH
D. A CREDIT TO ACCOUNTS RECEIVABLE
E. ALL OF THE ABOVE ENTRIES WILL BE INCLUDED IN THE
ACCOUNT FOR THE COLLECTION FROM MAX.
4. EDP COMPANY ESTIMATES THAT $1,800 OF ITS ACCOUNTS RECEIVABLES
WILL NOT BE COLLECTED. iF A DEBIT BALANCE OF $300 EXISTS IN
THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS BEFORE RECORDING
THE UNCOLLECTIBLE ACCOUNTS EXPENSE, THE UNCOLLECTIBLE ACCOUNTS
EXPENSE BALANCE WILL BE:
A. $1,500
B. $1,800
C. $2,100
D. $1,200
E. $ 300
5. AT THE END OF THE MONTH WE WILL ESTIMATE THE AMOUNT
OF ACCOUNTS RECEIVABLES THAT WILL NOT BE COLLECTED.
WHAT JOURNAL ENTRY DO WE MAKE TO RECORD THIS EVENT?
A. DEBIT UNCOLLECTIBLE ACCOUNTS EXPENSE AND
CREDIT ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS.
B. DEBIT UNCOLLECTIBLE ACCOUNTS EXPENSE AND
CREDIT ACCOUNT RECEIVABLES
C. DEBIT ACCOUNTS RECEIVABLES AND
CREDIT UNCOLLECTIBLE ACCOUNTS EXPENSE
D. DEBIT ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS AND
CREDIT ACCOUNTS RECEIVABLES
E. NONE OF THE ABOVE
6. WHEN DO WE RECORD A SALE?
A. WHEN IT IS RECORDED BY THE CASH REGISTER
B. WHEN WE RECEIVE A SALES INVOICE FROM THE CUSTOMER
C. WHEN WE RECEIVE CASH FOR MERCHANDISE
D. WHEN A CONTRACT IS AGREED UPON BY BUYER AND SELLER TO TRANSFER
MERCHANDISE
E. ALL THE ABOVE
7. 2/10,N/30 MEANS WHAT?
A. A 10% DISCOUNT IS GIVEN IF PAID IN 30 DAYS
B. A 2% DISCOUNT IS GIVEN IF PAID IN 10 DAYS
C. IF YOU DON'T PAY WITHIN 10 DAYS YOU MUST PAY WITHIN 30 DAYS
D. NO PAYMENT IS NECESSARY UNTIL AFTER 30 DAYS
E. B AND C ABOVE
8. WHAT IS THE AGING METHOD?
A. THIS METHOD ESTIMATES WHAT THE BALANCE OF THE ALLOWANCE
FOR UNCOLLECTIBLE ACCOUNTS SHOULD BE.
B. A METHOD TO DETERMINE THE LOSSES FROM UNCOLLECTIBLE
ACCOUNTS RECEIVABLE
C. THIS METHOD RECOGNIZES THAT A LARGER PERCENTAGE OF OLDER
ACCOUNTS RECEIVABLES WII NOT BE COLLECTED.
D. THIS METHOD INVOLVES SORTING OUT ALL THE ACCOUNTS
RECEIVABLES BY AGE.
E. ALL OF THE ABOVE
9. THE ACCOUNTS RECEIVABLE SYSTEM CONSISTS OF WHICH OF THE FOLLOWING.
A. THE CUSTOMER MASTER FILE MAINTENANCE SYSTEM.
B. THE SALES ORDER ENTRY/INVOICE SYSTEM
C. THE CASH RECEIPTS SYSTEM.
D. THE MONTHLY BILLING SYSTEM.
E. ALL OF THE ABOVE
10. WHAT IS THE ALLOWANCE METHOD OF ESTIMATING BAD ACCOUNTS?
A. IT ALLOWS SOME CUSTOMERS TO NOT PAY THEIR ACCOUNTS.
B. IT IDENTIFIES WHICH CUSTOMERS WILL NOT PAY THEIR ACCOUNTS.
C. IT COMPARES THE BAD ACCOUNTS OF PREVIOUS YEARS WITH THE
YEARS SALES AND CALCULATES A PERCENTAGE TO ESTIMATE BAD DEBTS.
D. IT IS ONLY USED BY SMALL BUSINESSES.
E. NONE OF THE ABOVE
.