Goals Achievement: Chapter Seven
The majority of receivables are trade receivables.
Advances to employees, and deposits with utilities are examples of:
Costs associated with the extension of credit include credit checks, collection efforts, and uncollectible accounts.
When is a sale normally recognized if a customer uses a nonbank credit card?
Does the allowance method or the direct write-off method achieve a better matching of revenues and expenses?
A separate allowance account is established under the direct write-off method.
Which approach to estimating uncollectible accounts utilizes computation techniques like aging of accounts receivable or percentage of outstanding accounts receivable (in contrast to percentage of sales)?
The income statement approaches to estimating uncollectible accounts result in computations that reveal the balance that should be in the Allowance for Uncollectible Accounts.
Under the allowance method, the write-off of an uncollectible account will result in a decrease in either income or total assets.
Under the allowance method, reinstating an account previously written off will cause an increase in the Allowance for Uncollectible Accounts.
The numerator used in calculating the accounts receivable turnover ratio is:
Notes receivable would initially be recorded at their maturity value.
A dishonored note should be: