66. Trade accounts receivable are valued and reported on the statement of financial position
a.in the investment section.
b.at gross amounts less sales returns and allowances.
c.at cash realizable value.
d.only if they are not past due.
67. Three accounting issues associated with accounts receivable are
a.depreciating, returns, and valuing.
b.depreciating, valuing, and collecting.
c.recognizing, valuing, and disposing.
d.accrual, bad debts, and disposing.
68. Which of the following would require a compound journal entry?
a.To record merchandise returned that was previously purchased on account.
b.To record sales on account.
c.To record purchases of inventory when a discount is offered for prompt payment.
d.To record collection of accounts receivable when a cash discount is taken.
69. The adjusting entry a retailer makes to record interest on customer amounts due includes a debit to
a.Notes Receivable.
b.Interest Receivable.
c.Accounts Receivable.
d.Interest Revenue.
70. A customer charges a treadmill at Mike's Sport Shop. The price is €800 and the financing charge is 9% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 days and a finance charge is added to the customer's account.
What is the amount of the finance charge?
a.€24
b.€6
c.€72
d.€2
71. A customer charges a treadmill at Mike's Sport Shop. The price is €2,000 and the financing charge is 9% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 days and a finance charge is added to the customer's account.
The accounts affected by the journal entry made by Mike's Sport Shop to record the finance charge are
a.Accounts Receivable
Cash
b.Cash
Finance Receivable
c.Accounts Receivable
Interest Payable
d.Accounts Receivable
Interest Revenue
72. The net amount expected to be received in cash from receivables is termed the
a.cash realizable value.
b.cash-good value.
c.gross cash value.
d.cash-equivalent value.
73. If a department store fails to make the entry to accrue the finance charges due from customers,
a.accounts receivable will be overstated.
b.interest revenue will be understated.
c.interest expense will be overstated.
d.interest expense will be understated.
74. Under the allowance method, writing off an uncollectible account
a.affects only statement of financial position accounts.
b.affects both statement of financial position and income statement accounts.
c.affects only income statement accounts.
d.is not acceptable practice.
75. When a company determines a particular account to be uncollectible, it charges the loss to Bad Debt Expense under
a.the allowance method.
b.the direct writeoff method.
c.both the allowance method and the direct write–off method.
d.None of these answer choices are correct.