58.
Which of the following best describes accounts receivable?
59.
The amount of cash owed to a company by its customers from the sale of products or
services on account is commonly referred to as:
60.
Identify the likely disadvantage(s) of extending credit to customers.
61.
Identify the likely advantage(s) of extending credit to customers.
62.
Identify the condition(s) that must exist for a sale and the related receivable to be
recognized.
63.
Fleming Corp. provided services on account. The transaction would be recorded with a
debit to:
64.
Fleming Corp. provided services on account. The transaction would be recorded with a
credit to:
65.
Which of the following items are classified as receivables?
66.
A trade discount results in:
67.
Barton Health Services provided care to a patient worth $1,200. Because the patient was
over the age of 65, Barton granted the patient a 20% discount and the customer paid the
correct amount in cash. How would Barton record the service transaction?
A.
Cash
960
Service Revenue
960
B.
Cash
960
Trade Discount
240
Service Revenue
1,200
C.
Cash
1,200
Service Revenue
1,200
D.
Cash
1,200
Trade Discount
240
Service Revenue
960
68.
When customers purchase products on account, Spitz Manufacturing offers them a 2%
reduction in the amount owed if they pay within 10 days. This is an example of a:
69.
Garber Plumbers offers a 20% trade discount when providing $2,000 or more of plumbing
services to its customers. In March 2018, Garber provided $4,000 of plumbing services to
Red Oak Inc., and $1,500 of services to Cyril Inc., Each of these customers was granted
credit terms of 2/10, net 30. If both customers paid for the plumbing services within the
discount period, what was the net revenues amount for these two transactions?
70.
On July 8, Ray Inc. sold 100 printers to Office Rental Company at $600 each and offered a
2% discount for payment within 10 days. On July 15, Office Rental Company paid the full
amount in cash. What should Ray Inc. record on July 15?
A.
Cash
60,000
Accounts Receivable
60,000
B.
Cash
58,800
Accounts Receivable
58,800
C.
Cash
58,800
Sales Discounts
1,200
Accounts Receivable
60,000
D.
Cash
60,000
Sales Discounts
1,200
Sales Revenue
58,800
71.
On March 17, Jackal Lumber sold building materials to Fredo Limited for $15,000 with
terms of 3/10, net 20. What amount did Jackal record as revenue on March 25 when Fredo
paid for the building materials?
72.
A company collects a customer’s account within the discount period. Indicate how this
transaction would affect (1) assets, (2) stockholders’ equity, and (3) revenues.
73.
On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with
credit terms 2/10, n/30. How would Flores record the sale on November 10?
A.
Accounts Receivable
7,840
Sales Revenue
7,840
B.
Accounts Receivable
8,000
Sales Revenue
8,000
C.
Accounts Receivable
7,840
Cash Discounts
160
Sales Revenue
8,000
D.
Accounts Receivable
8,000
Cash Discounts
160
Sales Revenue
7,840
74.
On November 10 of the current year, Flores Mills provides services to a customer for
$8,000 with credit terms 2/10, n/30. The customer made the correct payment on
November 17. How would Flores record the collection of cash on November 17?
A.
Cash
7,840
Accounts Receivable
7,840
B.
Cash
7,840
Sales Discounts
160
Accounts Receivable
8,000
C.
Cash
7,840
Sales Revenue
160
Accounts Receivable
8,000
D.
Cash
8,000
Accounts Receivable
8,000
75.
On November 10 of the current year, Flores Mills provides services to a customer for
$8,000 with credit terms 2/10, n/30. The customer made the correct payment on
December 5. How would Flores record the collection of cash on December 5?
A.
Cash
7,840
Accounts Receivable
7,840
B.
Cash
7,840
Sales Discounts
160
Accounts Receivable
8,000
C.
Cash
7,840
Sales Revenue
160
Accounts Receivable
8,000
D.
Cash
8,000
Accounts Receivable
8,000
5-32
76.
Oswego Clay Pipe Company provides services of $46,000 to Southeast Water District #45
on April 12 of the current year with terms 1/15, n/60. What would Oswego record on April
12?
A.
Accounts Receivable
46,000
Sales Revenue
46,000
B.
Accounts Receivable
46,000
Sales Revenue
45,540
Sales Discounts
460
C.
Accounts Receivable
45,540
Sales Revenue
45,540
D.
Accounts Receivable
45,540
Sales Discounts
460
Sales Revenue
46,000
77.
Oswego Clay Pipe Company provides services of $46,000 to Southeast Water District #45
on April 12 of the current year with terms 1/15, n/60. What would Oswego record on April
23, assuming the customer made the correct payment on that date?
A.
Cash
45,540
Sales Revenue
460
Accounts Receivable
46,000
B.
Cash
46,000
Sales Discounts
460
Accounts Receivable
46,000
Interest Revenue
460
C.
Cash
45,540
Sales Discounts
460
Accounts Receivable
46,000
D.
Cash
46,000
Accounts Receivable
45,540
Sales Revenue
460
78.
Oswego Clay Pipe Company provides services of $46,000 to Southeast Water District #45
on April 12 of the current year with terms 1/15, n/60. What would Oswego record on June
10, assuming the customer made the correct payment on that date?
A.
Cash
46,000
Accounts Receivable
45,540
Discounts
Receivable
460
B.
Cash
46,000
Accounts Receivable
45,540
Interest Revenue
460
C.
Cash
46,000
Accounts Receivable
46,000
D.
Cash
46,460
Accounts Receivable
46,000
Interest Revenue
460
79.
Which of the following is recorded upon receipt of a payment on April 7, 2018, by a
customer who pays a $900 invoice dated March 3, 2018, with terms 2/10, n/60?
80.
Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer
agreed to keep the paint upon being offered a 15% price reduction. The price reduction is
an example of a:
81.
Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer
agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record
this reduction by crediting Accounts Receivable and debiting:
82.
Tom’s Textiles shipped the wrong material to a customer, who refused to accept the order.
This is an example of a:
83.
Tom’s Textiles shipped the wrong material to a customer, who refused to accept the order.
Upon receipt of the material, Tom’s would credit Accounts Receivable and debit:
84.
A company records a sales return from a credit customer. Indicate how this transaction
would affect (1) assets, (2) stockholders’ equity, and (3) revenues.
85.
Lewis Inc. had the following information taken from various accounts at the end of the
year:
Sales discounts
$41,000
Deferred revenues
$32,000
Total sales
$459,000
Purchase discounts
$15,000
Sales allowances
$35,000
Accounts receivable
$205,000
What was Lewis Inc.’s net revenues for the year?
86.
Eric Company has the following information:
Total revenues
$860,000
Sales returns and allowances
$50,000
Sales discounts
$30,000
Ending inventory
$100,000
What is the amount of net revenues for Eric Company?
87.
Boynton Jewelers reported the following amounts at the end of the year: total sales =
$550,000; sales discounts = $12,000; sales returns = $44,000; sales allowances = $17,000.
What was the company’s net revenues for the year?
88.
Ryerson Co. provides goods and services to customers during the year totaling $100,000.
Also during the year, customers are granted discounts, returns, and allowance of $20,000.
At the end of the year, Ryerson estimates that an additional $5,000 in discounts, returns,
and allowances will occur next year as a result of sales transactions this year. What is the
amount of net revenues Ryerson will report in its current-year income statement?
89.
Accounts receivable are normally reported at the: