INTACC RECEIVABLES

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

Which of the following does not change the balance in accounts receivable? a) Bad debt expense adjusting entry b) return on credit sales c) collection from customers d) Write-off

a) Bad debt expense adjusting entry

Pink Thomasians Co. made a P100,000 sale on account with the following terms: 2/10, n/30. Pink Thomasians uses the net method to record sales made on credit. What is/are the debit(s) in the journal entry to record the sale? a) Debit Accounts Receivable for P98,000. b) Debit Accounts Receivable for P98,000 and Sales Discounts for P2,000. c) Debit Accounts Receivable for P100,000. d) Debit Accounts Receivable for P100,000 and Sales Discounts for P2,000

a) Debit Accounts Receivable for P98,000.

What is the normal journal entry when writing-off an account as uncollectible under the allowance method? a) Debit Allowance for Doubtful Accounts, credit Accounts Receivable. b) Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. c) Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. d) Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

a) Debit Allowance for Doubtful Accounts, credit Accounts Receivable.

Which of the following is used to account for probable sales discounts, sales returns and sales allowances in a factoring arrangement? a) Factor's holdback b) Recourse liability c) Loss from factoring d) Liability from discounted note

a) Factor's holdback

On July 1, 2019, Pink Philippines Company sold goods in exchange for P2,000,000, 8-month, non-interest-bearing note receivable. At the time of the sale, the market rate of interest was 12%. The entity discounted the note at 10% on September 1, 2019. What is the amount of discount on note receivable? a) P100,000 b) P75,000 c) P25,000 d) P -0-

a) P100,000

On December 31, 2022, Pink Cavite, Inc. sold for P75,000 an old machine having an original cost of P135,000 and a book value of P60,000. The terms of the sale were as follows: P15,000 down payment; P30,000 payable on December 31 each of the next two years. The agreement of sale made no mention of interest; however, 9% would be a fair rate for this type of transaction. The present value of an ordinary annuity of 1 at 9% for 2 years is 1.75911. The present value of 1 at 9% for 2 periods is 0.84167. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2022 rounded to the nearest peso? a) P52,773. b) P67,773. c) P60,000. d) P105,546.

a) P52,773.

BBM Company, one of LeniLugaw Company's credit customers, is experiencing financial difficulties due to operational restrictions brought by Covid-19. The firm is unable to service its debts and as a result has missed the payment of its note and accrued interest with LeniLugaw Company as well as in the payment of its tax liabilities with the BIR. The principal amount of the note is P500,000 (which is already due) with annual interest of 10% payable annually. Accrued interest balance at December 31, 2020 is P50,000. BBM's management has negotiated a modification of its debt terms with LeniLugaw. At this time, the prevailing market rate of interest for similar transaction remained at 10%. LeniLugaw Company, because of its advocacy for "mas radical ang magmahal", agreed to the following new terms: (1) Forgive the accrued interest at December 31, 2020; (2) Extend the payment of the principal for two years; and (3) Reduce the interest rate (payable annually) to 8%. How much impairment loss should be recognized by BBM Company on December 31, 2020? a) P67,330 b) P-0- c) P50,000 d) P103,744

a) P67,330

Which of the following statements about receivable financing is not correct? a) Pledging refers to an outright sale of receivable. b) In assignment, the accounts receivable assigned serve as security for the loan. c) In discounting without recourse, the notes receivable discounted is derecognized. d) In factoring, there is an outright sale of receivable.

a) Pledging refers to an outright sale of receivable.

If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as a) a deduction from sales in the income statement. b) an item of "other income and expense" in the income statement. c) a deduction from accounts receivable in determining the net realizable value of accounts receivable. d) sales discounts forfeited in the cost of goods sold section of the income statement.

a) a deduction from sales in the income statement.

When a customer purchases merchandise inventory from a business organization, discount may be given which is designed to induce prompt payment. Such discount is called a) cash discount b) enhancement discount c) nominal discount d) trade discount.

a) cash discount

Receivables from officers, employees or affiliated companies should be reported in the statement of financial position as a) current assets if collectible within 12 months. b) non-current assets only. c) trade notes and accounts receivable if they otherwise qualify as current assets. d) offsets to capital

a) current assets if collectible within 12 months.

On January 1, 2022 Pink Philippines Co. had a balance in the Allowance for Doubtful Accounts of P10,000. During 2022, it wrote off P7,200 of accounts and collected P2,100 on accounts previously written off. The balance in Accounts Receivable was P200,000 at January 1 and P240,000 at December 31. At December 31, 2022, Pink Philippines estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2022? a) P2,000. b) P7,100. c) P9,200. d) P12,000.

b) P7,100.

Gobiernong Matapat Co. made a P100,000 sale on account with the following terms: 1/10, n/30. If Gobiernong Matapat uses the gross method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale? a) Debit Accounts Receivable for P99,000. b) Debit Accounts Receivable for P99,000 and Sales Discounts for P1,000. c) Debit Accounts Receivable for P100,000. d) Debit Accounts Receivable for P100,000 and Sales Discounts for P1,000

c) Debit Accounts Receivable for P100,000.

What is the normal journal entry for recording bad debt expense under the allowance method? a) Debit Allowance for Doubtful Accounts, credit Accounts Receivable. b) Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. c) Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. d) Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

c) Debit Bad Debt Expense, credit Allowance for Doubtful Accounts.

Under IFRS, which of the following is not permitted for accounting for material amounts of uncollectable accounts receivable? a) Percentage of receivables, allowance method. b) Percentage of sales, allowance method. c) Direct write-off method. d) All of the choices are acceptable under IFRS.

c) Direct write-off method.

On January 1, 2022, Pink Cebu Co. exchanged equipment for a P400,000 zerointerest-bearing note due on January 1, 2025. The prevailing rate of interest for a note of this type at January 1, 2022 was 10%. The present value of P1 at 10% for three periods is 0.75. What amount of interest revenue should be included in West's 2023 income statement? a) P -0- b) P30,000 c) P33,000 d) P40,000

c) P33,000

Pink Batangas Company received from a customer a one-year, P500,000 note bearing annual interest of 8%. After holding the note for six months, the entity discounted the note without recourse at 10%. What amount of cash was received from the bank? a) P540,000 b) P523,810 c) P513,000 d) P495,238

c) P513,000

Pink All, Inc. factors P1,000,000 of its accounts receivables with guarantee (recourse) for a finance charge of 4%. The finance company retains an amount equal to 8% of the accounts receivable for possible adjustments. What would be the debit to Cash in the journal entry to record this transaction? a) P1,000,000. b) 960,000. c) P880,000. d) P780,000.

c) P880,000.

Which of the following is true when accounts receivable are factored without recourse? a) The transaction may be accounted for either as a secured borrowing or as a sale, depending upon the substance of the transaction. b) The receivables are used as collateral for a promissory note issued to the factor by the owner of the receivables. c) The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables. d) The financing cost (interest expense) should be recognized ratably over the collection period of the receivables.

c) The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables.

Under the allowance method of recognizing uncollectible accounts, the entry to write off an uncollectible account a) increases the allowance for uncollectible accounts. b) has no effect on the allowance for uncollectible accounts. c) has no effect on net income. d) decreases net income.

c) has no effect on net income.

A 120-day, 6% interest-bearing note receivable is discounted to a bank at 8% after being held for 45 days. The proceeds received from the bank upon discounting would be a) maturity value less the discount at 8% for 120 days b) maturity value less the discount at 8% for 45 days c) maturity value less the discount at 8% for 75 days d) maturity value less the discount at 6% for 75 days

c) maturity value less the discount at 8% for 75 days

Which of the following is included in the normal journal entry to record the collection of accounts receivable previously written off when using the allowance method? a) Debit Allowance for Doubtful Accounts, credit Accounts Receivable. b) Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. c) Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. d) Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

d) Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

When accounts receivable aging schedule is prepared, a series of computations is made to determine the estimated uncollectible accounts. The resulting amount from this aging schedule a) When added to the total accounts written off during the year is the desired credit balance of the allowance for doubtful accounts at year-end. b) Is the amount of doubtful accounts expense for the year. c) Is the amount that should be added to the beginning allowance for doubtful accounts to get the doubtful accounts expense for the year. d) Is the amount of desired credit balance of the allowance for doubtful accounts to be reported at year-end.

d) Is the amount of desired credit balance of the allowance for doubtful accounts to be reported at year-end.

Leni Kiko Corporation had a January 1, 2022 balance in the Allowance for Doubtful Accounts of P12,000. During 2022, it wrote off P8,640 of accounts and collected P2,520 on accounts previously written off. The balance in Accounts Receivable was P240,000 at January 1 and P288,000 at December 31. At December 31, 2022, Leni Kiko estimates that 5% of accounts receivable will prove to be uncollectible. What should Leni Kiko report as its Allowance for Doubtful Accounts at December 31, 2022? a) P5,760. b) P5,880. c) P8,280. d) P14,400.

d) P14,400.

The category "trade receivables" includes a) advances to officers and employees. b) income tax refunds receivable. c) claims against insurance companies for casualties sustained. d) none of these

d) none of these


संबंधित स्टडी सेट्स

Anatomy Chapter 20 The Male Pelvis

View Set

Fahmy 3030 THE HUNCHBACK OF NOTRE DAME 1

View Set

Exam 1 - Selling (Ch.1-4 Quizzes)

View Set

Bio 111 Ch. 9 & 10 Mitosis and Meiosis

View Set

Spanish 2 - Lección 6 - Prueba de práctica

View Set