71. The accounts receivable turnover is calculated by:
A. Dividing net sales by average accounts receivable.
B. Dividing net sales by average accounts receivable and multiplying by 365.
C. Dividing average accounts receivable by net sales.
D. Dividing average accounts receivable by net sales and multiplying by 365.
E. Dividing net income by average accounts receivable.
72. A company has net sales of $870,000 and average accounts receivable of $174,000. What is its accounts receivable turnover for the period?
A. 0.20
B. 5.00
C. 20.0
D. 73.0
E. 1,825
73. Dell reported net sales of $8,739 million and average accounts receivable of $864 million. Its accounts receivable turnover is:
A. 0.90
B. 10.1
C. 36.1
D. 50.0
E. 3,686
74. Pepsi's accounts receivable turnover was 9.9 for this year and 11.0 for last year. Coca-Cola's turnover was 9.3 for this year and 9.3 for last year. These results imply that:
A. Coke has the better turnover for both years.
B. Pepsi has the better turnover for both years.
C. Coke's turnover is improving.
D. Coke's credit policies are too loose.
E. Coke is collecting its receivables more quickly than Pepsi in both years.
75. A company had an accounts receivable turnover ratio of 12 and net sales of $744,000 for a given period. What was the average amount of accounts receivables for this period?
A. $8,928,000
B. $62,000
C. $4,380
D. $169.86
E. Average accounts receivable cannot be determined from this information
76. A company had an accounts receivable turnover ratio of 8 and net sales of $600,000 for a given period. What was the average accounts receivable amount for this period?
A. $4,800,000.
B. $2,919.99.
C. $205.48.
D. $75,000.
E. Average accounts receivable cannot be determined from this information.
77. The matching principle requires:
A. That expenses be ignored if their effect on the financial statements are less important than revenues to the financial statement user.
B. The use of the direct write-off method for bad debts.
C. The use of the allowance method of accounting for bad debts.
D. That bad debts be disclosed in the financial statements.
E. That bad debts not be written off.
78. The materiality constraint:
A. States that an amount can be ignored if its effect on financial statements is unimportant to the user's business decisions.
B. Requires use of the allowance method for bad debts.
C. Requires use of the direct write-off method.
D. States that bad debts not be written off.
E. Requires that expenses be reported in the same period as the sales they helped produce.
79. If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in:
A. An increase in the expenses of the current period.
B. A reduction in current assets.
C. A reduction in equity.
D. No effect on the expenses of the current period.
E. A reduction in current liabilities.
80. On October 29 of the current year, a company concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on this company's net income and total assets assuming the allowance method is used to account for bad debts?
A. Decrease in net income; no effect on total assets.
B. No effect on net income; no effect on total assets.
C. Decrease in net income; decrease in total assets.
D. Increase in net income; no effect on total assets.
E. No effect on net income; decrease in total assets.