In: Accounting
The sales method for estimating bad debts is calculated using
________.
A) aging of accounts receivable...
- The sales method for estimating bad debts is calculated using
________.
A) aging of accounts receivable
B) a percentage of credit sales
C) a percentage of net accounts receivable
D) the current balance in accounts receivable
- Team Shirts had a balance in its allowance for uncollectible
accounts of $(200). Aging the accounts receivable showed that the
allowance should be $(1,800). Bad debts expense should be
________.
A) $1,400
B) $1,600
C) $1,800
D) $2,000
Learning Objective 4-4
- Credit card sales benefit companies because ________.
A) the risk of uncollectible accounts is transferred to credit
card companies
B) fewer customers will be able to buy products or services
C) the credit card company is not responsible for evaluating
customers’ credit-worthiness
D) they will receive less than the full amount of the sale from
the credit card company
- Timmy’s Tires sold $18,750 worth of tires to customers using
VISA. The credit card fee is 4% of sales. The amount of sales
Timmy’s Tires should recognize is ________.
A) $750
B) $19,500
C) $18,750
D) $18,000
- Team Shirts decided to accept bankcards from credit customers.
Team Shirts should expect ________.
A) an increase in its allowance for uncollectible accounts
B) a decrease in its bad debts expense
C) a decrease in its credit card expense
D) an increase in its write-off of specific customer
accounts
- Magic Cow Co. made a sale for $5,000 to a customer who paid
with MasterCard. MasterCard charges Magic Cow a fee of 3% of sales.
MasterCard will directly deposit the cash from this sale within 24
hours. How much cash will MasterCard deposit?
A) $5,000
B) $4,850
C) $150
D) $5,150
- Sally has a new VISA card that was issued by MBNA (Maryland
Bank of North America). Sally used her VISA card to buy five kegs
of beer at Crock‘n’ Keg. Three months later, Sally still has not
paid her VISA bill. Which company carries the account receivable
from this sale?
A) MBNA
B) Sally
C) Crock‘n’ Keg
D) both Sally and Crock‘n’ Keg
- Magic Cow Co. made a sale for $5,000 to a customer who paid
with MasterCard. MasterCard charges Magic Cow a fee of 3% of sales.
How much sales revenue will Magic Cow record?
A) $5,000
B) $4,850
C) $150
D) $5,150
Learning Objective 4-7
- Ace Electronics accepted a promissory note from Fenstermaker,
who promised to pay Ace $2,000 plus 6% interest at the end of six
months. What is the amount of interest that will be paid at the end
of the six-month period?
A) $120
B) $240
C) $60
D) $2,060
- Ace Electronics accepted a promissory note from Fenstermaker,
who promised to pay Ace $2,000 plus 6% interest at the end of six
months. When Ace first accepts the note, it should record interest
receivable of ________.
A) $120
B) $0
C) $60
D) $240
- Acme, Inc. accepted a promissory note from NadirCo, who
promised to pay Acme $5,000 plus 6% interest at the end of four
months. What is the amount of interest that will be paid at the end
of the four-month period?
A) $300
B) $100
C) $600
D) $5,000