ACCOUNTING 229 chp 8

False

Receivables are reported on the balance sheet at the cash amount owed by customers.

True

Short-term notes receivable are reported at their cash (net) realizable value.

False

Allowance for Doubtful Accounts is closed at the end of the fiscal year.

December 14

A 90-day promissory note is issued on September 15. What is the note's maturity date?

Face value

At what amount is a short-term notes receivable recorded on the issue date?

Cash (net) realizable value

At what value are accounts receivable reported on the balance sheet?

True

Bad Debts Expense is a nominal account and is closed at the end of the fiscal period, while Allowance for Doubtful Accounts is a real account and remains open at the end of the fiscal period. T/F

cash (net) realizable value.

Notes receivable are reported in the current assets section of the balance sheet at

True

The direct write-off method violates the expense recognition principle.

True

Under the allowance method, the write off of an account receivable leaves the net realizable value of the receivables unchanged.

A note receivable

What type of receivable is evidenced by a formal instrument and normally requires the payment of interest?

Trade receivables

What type of receivables result from sales transactions?

Accounts Receivable and Allowance for Doubtful Accounts

When an uncollectible account is recovered after it has been written off, which of the following accounts will be credited in the process?

When service is provided on account

When is a receivable recorded by a service organization?

Interest receivable

Which of the following should be classified as an "other" receivable?

Realizing notes receivable

Which one of the following is not one of the five basic issues in accounting for notes receivable?

Allowance for Doubtful Accounts is debited.

Which one of the following is part of the transaction that is recorded when an account is written off under the allowance method?

A promissory note is not a negotiable instrument.

Which one of these statements about promissory notes is incorrect?