Question 1

The receivable that is usually evidenced by a formal instrument of credit is a(n)

Accepted Answer

note receivable.

Question 2

Which of the following receivables would not be classified as an other receivable?

Accepted Answer

Notes receivable

Question 3

Notes or accounts receivables that result from sales transactions are often called

Accepted Answer

trade receivables.

Question 4

The term receivables refers to

Accepted Answer

amounts due from individuals or companies.

Question 5

Receivables are

Accepted Answer

claims that are expected to be collected in cash.

Question 6

Non-trade receivables should be reported separately from trade receivables. Why is this statement either true or false?

Accepted Answer

It is true because non-trade receivables do not result from business operations and should not be included with accounts receivable.

Question 7

Which of the following would probably be the most significant type of a claim held by a company?

Accepted Answer

accounts receivable

Question 8

Accounts receivable are valued and reported on the balance sheet

Accepted Answer

at cash realizable value.

Question 9

Three accounting issues associated with accounts receivable are

Accepted Answer

recognizing, valuing, and accelerating collections.

Question 10

The Allowance for Doubtful Accounts is necessary because

Accepted Answer

when recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay.

Question 11

The account Allowance for Doubtful Accounts is classified as a(n)

Accepted Answer

contra account to Accounts Receivable.

Question 12

Under the allowance method, Bad Debt Expense is recorded

Accepted Answer

for an amount that the company estimates it will not collect.

Question 13

Under the allowance method, writing off an uncollectible account

Accepted Answer

affects only balance sheet accounts.

Question 14

The net amount expected to be received in cash from receivables is termed the

Accepted Answer

cash realizable value.

Question 15

If a company fails to record estimated bad debts expense,

Accepted Answer

expenses are understated.

Acc Test 3 Chapter 9 Final Chapter 8

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