1) Which of the following is included in the category Other receivables?

1) Which of the following is included in the category Other receivables?

1) Which of the following is included in the category Other receivables?A) Loans to employeesB) Accounts receivablesC) Notes receivablesD) Investments2) GAAP prefers companies to use the:A) direct write-off method to evaluate bad debts.B) allowance method to evaluate bad debts.C) amortization method to evaluate bad debts.D) 360-day method to evaluate bad debts.3) Which of the following are the two methods of accounting for uncollectible receivables?A) The direct write-off method and the liability methodB) The asset method and the sales methodC) The allowance method and the liability methodD) The allowance method and the direct write-off method4) The Allowance for uncollectible accounts currently has a credit balance of $200. The companys management estimates that 2.5% of net credit sales will be uncollectible. Net credit sales are $115,000. What will be the amount of Uncollectible account expense reported on the income statement?A) $3,275B) $3,075C) $2,875 D) $2,6755) A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40,000 and collections of $36,000. One account for $650 was written off. Smart Art uses the percent-of-sales method to account for uncollectible account expense, and has decided to use a factor of 2% for their year-end adjustment of uncollectible account expense. At the end of the year, what is the ending balance in Accounts receivable?A) $4,000B) $36,000C) $3,350 D) $39,3506) A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40,000 and collections of $36,000. One account for $650 was written off. Smart Art uses the aging method to account for uncollectible account expense, and has calculated an amount of $200 as their estimate of uncollectible amounts at year-end. At the end of the year, what is the ending balance in Accounts receivable?A) $4,000B) $36,000C) $3,350D) $39,350 7) A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40,000 and collections of $36,000. One account for $650 was written off. Smart Art uses the aging method to account for uncollectible account expense, and has calculated an amount of $200 as their estimate of uncollectible amounts at year-end. At the end of the year, what is the ending balance in the Allowance for uncollectible accounts?A) $150B) $800C) $200D) $1,4508) Accounts receivable has a balance of $16,000 and the Allowance for uncollectible accounts has a credit balance of $1,700. What is Net accounts receivable before and after a $60 account receivable is written off?A) $14,300 before and $14,240 afterB) $14,300 before and $14,300 afterC) $16,000 before and $15,940 afterD) $16,000 before and $16,000 after9) Under the direct write-off method, a customer who doesnt pay their bills is written off with what journal entry?A) Debit Accounts receivable and credit Uncollectible account expenseB) Debit Uncollectible account expense and credit CashC) Debit Uncollectible account expense and credit Accounts receivableD) Debit Lost revenue and credit Accounts receivable10) Archer Company and Zorro Company both have significant amounts of accounts receivable at any time, and both experience uncollectible accounts from time to time. Archer uses the percent-of-sales method to account for uncollectible accounts, and Zorro uses the direct write-off method. Which of the following statements is FALSE? A) Zorro Companys method complies with GAAP.B) Archer Companys method will provide better matching of revenues and expenses.C) Archer Companys net income is more accurate due to their accounting method.D) Zorro Companys method does not provide good matching of revenues and expenses.11) Which of the following exists if the maker of a promissory note fails to pay the note on the due date?A) A discounted noteB) A depreciated noteC) An amortized noteD) A dishonored note12) What is the maturity value of a 3-month, 12% note for $20,000?A) $20,000B) $22,400C) $21,200D) $20,600 13) What is the maturity value of a note? A) The principal amount minus interest dueB) The principal amount plus interest dueC) The face amount of the noteD) The principal amount times the interest rate14) On October 1, 2014, Allen Jewelry Company accepted a 4-month, 10% note for $2,400 in settlement of an overdue account receivable. If the company accrues interest at year-end only, how much interest revenue should be accrued on December 31, 2014? A) $80B) $60 C) $240D) $4015) Which of the following is included in the denominator of the acid-test ratio?A) All current liabilities except accounts payableB) Total liabilitiesC) Total current liabilitiesD) Total current assets16) Which of the following is included in the cost of a plant asset? A) Amounts paid to ready the asset for its intended useB) Regular maintenance costC) Normal repair costD) Wages of workers who use the asset17) Which of the following would be capitalized and depreciated, rather than expensed?A) Modification for new useB) Paint jobC) Replacement of tiresD) Normal repair of engine18) Which of the following items should NOT be depreciated, depleted, or amortized?A) Natural resourcesB) LandC) Tangible property, plant, and equipment, other than landD) Intangible property19) On January 1, 2013, Zane Manufacturing Company purchased a machine for $40,000. The company expects to use the machine a total of 24,000 hours over the next 6 years. The estimated sales price of the machine at the end of 6 years is $4,000. The company used the machine 8,000 hours in 2013 and 12,000 in 2014. What is the book value of the machine at the end of 2014 if the company uses straight-line depreciation?A) $10,000B) $28,000 C) $17,778D) $20,00020) Which of the following items is included in the journal entry if a company sells equipment at a price equal to its book value?A) A debit to Loss on sale of equipmentB) A credit to Equipment for its original costC) A credit to Accumulated depreciationD) A debit to Equipment for its book value21) Which of the following items should be depleted?A) Intangible propertyB) LandC) Natural resourcesD) Tangible property, plant, and equipment, other than land22) Azimuth Company purchases a small business for $500,000. The market value of the businesss assets are $850,000, and the market value of the liabilities are $400,000. How much goodwill should Azimuth record?A) NoneB) $500,000C) $450,000D) $50,000 23) The decline in value of a copyright is accounted for by:A) depreciation.B) amortization.C) depletion.D) deterioration.24) Which of the following intangible assets bars other manufacturers from using the same name for a product?A) TrademarkB) PatentC) CopyrightD) Franchise25) Which of the following accounting methods is usually used to compute amortization expense?A) Declining-balanceB) Units-of-productionC) Straight-lineD) First-In, First-Out 26) On September 1, 2012, Algernon Company sold a truck for $15,000 cash. The truck was originally purchased for $40,000, had an estimated salvage value of $4,000 and an estimated life of 6 years. Algernon had recorded depreciation of $30,000 through the end of 2011 using Straight-Line. First, Algernon had to update the depreciation prior to sale. Then Algernon recorded the sale transaction. What was the effect of that transaction on the net income of the company?A) No gain or lossB) Gain of $9,000C) Gain of $15,000D) Loss of $9,000


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