Question : 51. Which of the following true regarding the U.S. Internal Revenue : 1230641

Accounting

51. Which of the following is true regarding the U.S. Internal Revenue Service
A. permits firms to use the allowance method to calculate the tax deduction for bad debts
B. requires that firms recognize bad debt expense only when they conclude an account is not collectible
C. permits firms to use the aging of accounts receivable method to calculate the tax deduction for bad debts
D. permits firms to use the percentage of sales to calculate the tax deduction for bad debts
E. permits firms to use the cost of goods sold method to calculate the tax deduction for bad debts

52. The financial statements contain information for analyzing the collectibility of accounts receivable and the adequacy of the expense for uncollectible accounts. Typical ratios used for this analysis include the
A. accounts receivable turnover ratio, only.
B. days receivables outstanding, only.
C. write-off percentage, only.
D. accounts receivable turnover ratio, days receivables outstanding, and write-off percentage.
E. accounts receivable turnover ratio and days receivables outstanding, only.

53. The accounts receivable turnover ratio captures the speed of cash collections from credit customers and is calculated as follows:
A. average accounts receivable divided by sales revenue
B. sales revenue divided by average accounts receivable
C. sales revenue plus average accounts receivable
D. sales revenue minus average accounts receivable
E. sales revenue times average accounts receivable

54. Ratios used to evaluate the allowance for uncollectibles are
A. Bad Debt Expense to Sales Revenue and the ratio of the Accounts Receivable, Gross to Allowance for Uncollectibles to Accounts
B. Sales Revenue to Bad Debt Expense and the ratio of the Accounts Receivable, Gross to Allowance for Uncollectibles to Accounts
C. Sales Revenue to Bad Debt Expense and the ratio of the Allowance for Uncollectibles to Accounts Receivable, Gross.
D. Bad Debt Expense to Sales Revenue and the ratio of the Allowance for Uncollectibles to Accounts Receivable, Gross.
E. none of the above

55. A firm that transfers its receivables in exchange for cash can
A. use its accounts receivable as collateral for a loan from a bank or other financial institution
B. factor its accounts receivable to a bank or other financial institution in exchange for cash.
C. transfer the accounts receivable to a legally separate entity that issues debt securities to investors
D. all of the above
E. none of the above

56. A firm may use its accounts receivable as collateral for a loan from a bank or other financial institution. Which of the following is/are true?
A. The firm physically maintains control of the accounts receivable, collects cash from customers, and repays the loan.
B. If the firm fails to repay the loan, the lender can claim the receivables.
C. If the firm has used its accounts receivable as collateral for a loan, the firm will continue to show those receivables as an asset (and there will also be a loan payable liability).
D. The firm should disclose the lending arrangement in its financial reports.
E. all of the above

57. A firm may factor its accounts receivable to a bank or other financial institution in exchange for cash. Which of the following is not true?
A. The lender physically controls the receivables and collects cash from customers.
B. Accounts receivable that the firm has factored do not appear on the balance sheet.
C. The firm has sold the accounts receivable..
D. The firm should disclose the factoring arrangement in its financial reports.
E. none of the above

58. The firm may transfer the accounts receivable to a legally separate entity that issues debt securities to investors. Which of the following is/are true?
A. The firm remits to investors the cash received from customers as those cash receipts occur.
B. The firm may be obligated to make payments to investors in securities if the customers fail to make sufficient cash payments to pay the principal and interest on the debt securities.
C. The transfer is called securitization, a process that transforms an asset (accounts receivable) into securities held by investors.
D. all of the above
E. none of the above

59. Sales returns affect net cash collections when a customer has the right to return a product for a refund, and the firm can reasonably estimate the amount of returns at the time of sale, U.S. GAAP and IFRS
A. require that the firm use the allowance method to estimate and recognize the effects of returns.
B. the selling firm debits a revenue contra account for expected returns to reduce current period revenues to the estimated amount that will not be returned.
C. require that the firm measures revenues based on the amount of cash it expects to collect from current period sales.
D. preclude revenue recognition when customers have the right to return goods unless the firm can reasonably estimate the amount of returns.
E. all of the above

60. The MMI company provides substantial services after the time of product sale and this condition introduces uncertainty. Which of the following is true?
A. Under some circumstances the firm recognizes revenue sometime after the sale.
B. Under some circumstances this uncertainty is sufficient to preclude the firm’s recognizing revenue at the time of sale.
C. The firm always recognizes revenue at the time of sale.
D. choices a and b
E. none of the above

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July 1, 2023

1) Members of OSHA's $100,000 club have:

A) invested more than $100,000 in health and safety equipment for employees.

B) purchased health and safety insurance coverage of at least $100,000.

C) received fines of $100,000 or more for safety or health violations.

D) paid more than $100,000 in workers' compensation claims.

2) Workplace safety is a significant issue because approximately ________ employees were injured on the job in 2009.

A) 3,000,000

B) 1,000,000

C) 500,000

D) 250,000

3) According to the doctrine of contributory negligence, employers were:

A) not responsible for an employees' injury when another employee's negligence caused the injury.

B) not liable for an employee's injuries when that employee's own negligence caused the injury.

C) responsible for compensating employees for all work-related illnesses and accidents.

D) not responsible for any employees' injuries under any circumstances.

4) Workers' compensation laws vary by state, but all are built on the theory that:

A) employees' personal health insurance should pay the medical costs of any injuries.

B) work-related accidents are costs of doing business and should be paid for by employers.

C) governments are responsible for paying the medical costs related to an employee's injuries.

D) employers are not responsible for employee injuries resulting from the employee's own negligence.

5) Which of the following is a true statement about workers' compensation?

A) Workers' compensation laws are federally mandated and enforced by OSHA.

B) Non-union firms are not required to carry workers' compensation insurance.

C) Workers' compensation is not mandatory in all U.S. states.

D) Most states had workers' compensation programs by 1911.

6) Workers' compensation:

A) pays only if the worker cannot.

B) is considered a no-fault system.

C) is mandatory in all fifty states.

D) covers employees' medical costs with Medicaid.

7) The primary goal of state workers' compensation laws is best described as:

A) providing a means for injured workers to receive care and income without having to sue.

B) determining the cause of work-related accidents and minimizing future accidents.

C) ensuring that employers are not held responsible for accidents caused by worker negligence.

D) spreading the cost of workplace accidents among all workers in the state.

8) The ________ holds that employers are not held liable for an employee's injuries when the negligence of another employee contributed to or caused the accident.

A) doctrine of contributory negligence

B) fellow-servant rule

C) general duty provision

D) "no-fault" rule

9) Which of the following is most likely true?

A) Workers' compensation is a federal program. OSHA is the organization that helps individual states meet workers' compensation standards.

B) Workers' compensation is a federal program that provides compensation to employees injured on the job. OSHA is a federal program that creates and enforces safety standards in the work place.

C) OSHA is a federal program that creates safety standards for work environments. Workers' compensation programs are created by the individual states to provide compensation for employees injured on the job.

D) OSHA is a federal program that provides compensation for employees injured on the job. Workers' compensation programs are state programs that provide compensation for employees injured on the job.

10) Workers' compensation:

A) replaces the worker's entire income until he/she is able to work again.

B) provides benefits for permanent, but not temporary, impairment.

C) gives survivors burial allowances and income benefits.

D) covers medical expenses up to $100,000.