Question :
81. The Ward Company has provided the following information: ? Net : 1228516
81. The Ward Company has provided the following information:
? Net sales totaled $750,000.
? Beginning net accounts receivable was $65,000.
? Ending net accounts receivable was $85,000.
What was Ward’s average collection period?
A. 73 days
B. 41.8 days
C. 31.6 days
D. 36.5 days
82. The Rye Corporation has provided the following information:
? Total sales were $1,200,000.
? Beginning net accounts receivable was $45,000.
? Ending net accounts receivable was $65,000.
Sales returns and allowances totaled $100,000.
What was Rye’s receivable turnover ratio?
A. 21.8
B. 18.5
C. 10.0
D. 20.0
83. The Rye Corporation has provided the following information:
? Total sales were $1,200,000.
? Beginning net accounts receivable was $45,000.
? Ending net accounts receivable was $65,000.
? Sales returns and allowances totaled $100,000.
What was Rye’s average collection period?
A. 16.7
B. 19.7
C. 36.5
D. 18.3
84. Which of the following transactions will result in a decrease in the receivable turnover ratio?
A. The journal entry to record bad debt expense.
B. Writing off an uncollectible account receivable.
C. Selling inventory on account.
D. Collecting an account receivable.
85. Which of the following transactions will result in an increase in the receivable turnover ratio?
A. The journal entry to record bad debt expense.
B. Writing off an uncollectible account receivable.
C. Selling inventory on account.
D. Purchasing inventory on account.
86. Which of the following statements is correct?
A. A decrease in the accounts receivable balance means that credit sales exceeded cash collections from customers.
B. The accounts receivable balance increases when cash collected from customers exceeds credit sales.
C. A decrease in accounts receivable is deducted from net income when determining cash flow from operations.
D. An increase in accounts receivable is deducted from net income when determining cash flow from operations.
87. Which of the following does not correctly describe the effect of recording a credit sale of inventory for a profit?
A. The receivables turnover ratio decreases.
B. Current assets increase.
C. Gross profit increases.
D. Operating expenses increase.
88. The Soft Company has provided the following information:
? Allowance for doubtful accounts increased $19,000 and accounts receivable increased ? $390,000 during the year.
? Accounts written off as uncollectible totaled $20,000.
? Net sales totaled $2,700,000.
? The gross profit percentage was 40%.
? Sales discounts were $100,000.
How much was Soft’s bad debt expense?
A. $39,000
B. $1,000
C. $19,000
D. $20,000
89. The Soft Company has provided the following information:
? Allowance for doubtful accounts increased $19,000 and accounts receivable increased $390,000 during the year.
? Accounts written off as uncollectible totaled $20,000.
? Net sales totaled $2,700,000.
? The gross profit percentage was 40%.
? Sales discounts were $100,000.
How much was Soft’s gross profit?
A. $1,040,000
B. $1,072,400
C. $1,032,400
D. $1,080,000
90. Redwing Company sold inventory costing $500 to a customer on account for $700. Which of the following correctly describes the collection of $686 cash when the customer takes advantage of a discount?
A. Operating expenses increase $14.
B. Accounts receivable decreases $686.
C. Current assets decrease $14.
D. Gross profit is not affected.
