Accounting review quiz

1. Notes Receivable and Accounts Receivable can also be called trade receivables. (Points: 1)
True
False


2. Receivables from company owners and officers should be disclosed separately on the balance sheet. (Points: 1)
True
False


3. Other receivables include non trade receivables such as loans to company officers. (Points: 1)
True
False


4. When companies sell their receivables to other companies, the transaction is called factoring (Points: 1)
True
False


5. Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables. (Points: 1)
True
False


6. Generally accepted accounting principles do not normally allow the use of the direct write-off method of accounting for uncollectible accounts. (Points: 1)
True
False


7. The direct write-off method records Bad Debt Expense in the year the specific account receivable is determined to be uncollectible. (Points: 1)
True
False


8. Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible. (Points: 1)
True
False


9. Under the direct write-off method, no attempt is made to match Bad Debt Expense to Sales Revenue in the same accounting period. (Points: 1)
True
False


10. The estimate based on sales method violates the matching principle. (Points: 1)
True
False


11. When the estimate based on analysis of receivables is used, income is reduced when a specific receivable is written off. (Points: 1)
True
False


12. When an account receivable that has been written off is subsequently collected, the account receivable is said to be reinstated. (Points: 1)
True
False


13. Allowance for Doubtful Accounts is a liability account. (Points: 1)
True
False


14. At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a debit balance of $2,000. If the estimate of uncollectible accounts determined by aging the receivables is $30,000, the current provision to be made for uncollectible accounts expense is $30,000. (Points: 1)
True
False


15. When using the estimate based on analysis of receivables, the amount computed in the analysis is always the required amount that would be recorded in the adjusting entry. (Points: 1)
True
False


16. The Allowance for Doubtful Accounts is similar to Accumulated Depreciation in that the account represents the total of all accounts written-off since the beginning year. (Points: 1)
True
False


17. The equation for computing interest on an interest-bearing note is as follows: interest equals maturity value times interest rate times time. (Points: 1)
True
False


18. The due date of a 60-day note dated July 10 is September 10. (Points: 1)
True
False


19. The maturity value of a note receivable is always the same as its face value. (Points: 1)
True
False


20. The interest on a 6%, 60-day note for $5,000 is $300. (Points: 1)
True
False