Financial Accounting 2301 Quiz D

The receivables turnover ratio gives information on how: A. how many times the company sells and collects amounts on account per year B. how many customers default per year C. how many times inventory is turned over per year D. the profitability of a company

A

The Perry Company reported Accounts Receivable, Net of $66,600 at the beginning of the year and $72,600 at the end of the year. If the company's net sales revenue during the fourth year was $876,000, what are the days to collect during the year? A. 34.00 B. 29.00 C. 12.6 D. 8.0

B

A piece of equipment was acquired on Jan 1, 2015 at a cost of $22,000, with an estimated residual value of $2,000 and an estimated useful life of four years. The company uses the double-declining-balance method. What is its book value at December 31, 2016? A. $12,000 B. $11,000 C. $5,500 D. $10,000

C

Recording depreciation is an application of the: A. seperate entity assumption B. unit-of-measure assumption C. expense recognition principle (matching) D. cost principle

C

Using its aging of accounts receivable, Age Old, Inc. estimates that $90,000 of its $4,000,000 of accounts receivable will be uncollectible. Prior to making its adjusting entry, the unadjusted allowance of doubtful accounts has a debit balance of $1,000. After the adjustment, the: A. Allowance for Doubtful Accounts will have an $89,000 credit balance B. Allowance for Doubtful Accounts will have an $91,000 credit balance C. Allowance for Doubtful Accounts will have an $90,000 credit balance D. Bad Debt Expense will equal $90,000

C

A truck costing $12,000, which has Accumulated Depreciation of $9,000, was sold for $2,000 cash. The entry to record this event would include a: A. gain of $1,000 B. credit to the Vechiles account for $3,000 C. credit to Accumulated Depreciation for $9,000 D. loss of $1,000

D

Blossom Inc. has an unadjusted debit balance of $3,500 in its Allowance for Doubtful Accounts. The company has experienced bad debt losses of 2% of credit sales prior periods. Blossom reported net credit sales of $1,500,000 for the current period. The required journal entry to record Bad Debt Expense should include a debit to: A. Allowance for Doubtful Accounts for $30,000 B. Bad Debt Expense for $33,500 C. Bad Debt Expense for $30,000 D. Allowance for Doubtful Accounts $33,500

D

Davidoff Company reported net credit of $735,000 on account for the year ending Dec 31, 2016. On Jan 1, 2016, the Allowance for Doubtful Accounts had a credit balance of $18,000. During 2016, $30,000 of uncollectible accounts receivable were written off. Davidoff has experienced bad debt losses of 3% of credit sales in prior periods. Using the percentage of credit sales method, what is the adjusted balance in the Allowance off Doubtful Accounts at Dec 31, 2016? A. $34,500 B. $ 22,050 C. $10,500 D. $ 10,050

D

On Jan 1, 2016, Busy Beaver, Inc. signed a $315,000, 5 year note payable to buy a new industrial veneer cutter. Busy Beaver plans to use the machine for 10 years and then sell it its scrap value of $5,000. Using straight-line depreciation, depreciation expense for the year ended December 31,2016 equals: A. $284,000 B. $283,500 C. $31,500 D. $31,000

D

On Jan 1, 2016, Xit Company bought a new delivery truck for $30,000. Xit plans to use the truck for 4 years, during which it will be driven 50,000 miles. The truck will be worthless at the end of the 4 years. If the truck was driven 15,000 miles in 2016, Depreciation Expense using units of production is: A. $7,500 B. $3,750 C. $15,000 D. $9,000

D

On October 1st, a company lends $10,000 to an employee who signs a 9%, 6-month promissory note. The company is preparing its year-end financial statements on December 31. No adjusting entries have been recorded in connection with this note. What adjusting entry should be recorded before the financial statements are prepared? A. Debit Interest Revenue and credit Interest Receivable for $225 B. Debit Interest Receivable and credit Interest Revenue for $450 C. Debit Interest Revenue and credit Interest Receivable for $450 D. Debit Interest Receivable and credit Interest Revenue for $225

D

Your company has net sals revenue of $36 million during the year. At the beginning of the year, fixed assets are $8 million. At the end of the year, fixed assets are $10 million. What is the fixed asset turnover ratio? A. 3.6 B. 2.0 C. 4.5 D. 4.0

D