31. Why would cash sales companies, such as Wendy's, Domino’s, and Krispy Kreme have accounts receivables on their financial statements?
32. Explain the computation of the length of the operating cycle.
Multiple Choice Questions
33. The year-end adjusting entry to recognize uncollectible accounts expense will
A. decrease assets and decrease equity.
B. increase assets and decrease equity.
C. increase liabilities and increase equity.
D. decrease liabilities and increase equity.
34. On January 1, 2016, the Accounts Receivable balance was $37,000 and the balance in the Allowance for Doubtful Accounts was $2,800. On January 15, 2016 an $800 uncollectible account was written-off. The net realizable value of accounts receivable immediately after the write-off is:
A. $36,200.
B. $33,400.
C. $35,000.
D. $34,200.
35. Based on this information, the amount of cash flow from operating activities that would appear on the 2016 statement of cash flows is:
A. $97,000.
B. $104,000.
C. $89,520.
D. $95,060.
36. The amount of uncollectible accounts expense recognized on the 2016 income statement is:
A. $320.
B. $1,000.
C. $2,080.
D. $1,940.
38. The net realizable value of Miller's receivables at the end of 2016 was
A. $54,000.
B. $49,920.
C. $59,700.
D. $48,300.
39. The balance in Accounts Receivable at the beginning of the period amounted to $16,000. During the period $64,000 of credit sales were made to customers. If the ending balance in Accounts Receivable amounted to $10,000, and uncollectible accounts expense amounted to $4,000, then the amount of cash inflow from customers that would appear in the operating activities section of the cash flow statement would be:
A. $66,000.
B. $64,000.
C. $80,000.
D. None of these answers are correct.
40. The amount of uncollectible accounts expense recognized in the 2016 income statement will be:
A. $310.
B. $725.
C. $745.50.
D. $550.