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Cash and Receivables Test

Enter the letter for the matching Answer
incorrect
1.
trade discounts
incorrect
2.
net method
incorrect
3.
interest-bearing notes
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4.
cash equivalents
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5.
separation of duties
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6.
bad debt expense
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7.
AR aging schedule
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8.
gross method
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9.
income statement approach
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10.
cash
A.
classifies the year-end balances according to their length of time outstanding - assumes older accounts are more likely to prove uncollectible
B.
balance sheet amount is an incidental result of estimating bad debt expense as a percentage of net credit sales
C.
individuals that have physical responsibility for assets should not also have access to accounting records
D.
money market funds, treasury bills, commercial paper. must have a maturity date no longer than 3 months from the date of purchase. also credit and debit card receivables.
E.
a way to change prices w/out publishing them or even to disguise them form competitors
F.
inherent cost of granting credit
G.
face amount x annual rate x fraction of annual period
H.
sales revenue is the net amount, after discount and any discounts not taken by the customer as interest revenue
I.
views cash discounts not taken as part of sales revenue
J.
currency and coins, balances in checking, items acceptable for deposit in these accounts. readily available to pay off debt or to use in operations
Type the Question that corresponds to the displayed Answer.
incorrect
11.
formal credit arrangements between a lender and a borrower
incorrect
12.
determine BDE by estimating the net realizable value of AR to be reported in the BS
incorrect
13.
resulting from the sale of goods or services on account (trade receivables)
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14.
represent a company's claims to the future collection of cash, other assets or services
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15.
companys plan to 1)encourage adherence to company policies and procedures 2)promote operational efficiency 3)minimize errors and theft and 4)enhance the reliability and accuracy of accounting data
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16.
compensate the bank for granting the loan or extending the line of credit
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17.
application of matching in accounting for bad debts
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18.
interest is discounted from the face amount to determine the cash proceeds made available to the borrower at the outset
incorrect
19.
amount of cash the company actually expects to receive from their customers
incorrect
20.
reduce the amount to be paid if remittance is made w/in a specified short pd of time

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