Question :
111. On August 9, Pierce Company receives a $8,500, 90-day, 8% : 1225948
111. On August 9, Pierce Company receives a $8,500, 90-day, 8% note from customer Eric Simms as payment on his account. What entry should be made on the maturity date assuming the maker pays in full?
A. Debit Notes Receivable $8,500; debit Interest Receivable $170; credit Sales $8,670.
B. Debit Cash $8,670; credit Interest Revenue $170; credit Notes Receivable $8,500.
C. Debit Cash $8,628; credit Interest Revenue $128; credit Notes Receivable $8,500.
D. Debit Cash $8,613; credit Interest Revenue $113; credit Notes Receivable $8,500.
E. Debit Cash $8 500; credit Notes Receivable $8,500.
112. On November 19, Hayes Company receives a $15,000, 60-day, 10% note from a customer as payment on his account. What adjusting entry should be made on the December 31 year-end?
A. Debit Interest Receivable $175; credit Interest Revenue $175.
B. Debit Interest Receivable $250; credit Interest Revenue $250.
C. Debit Interest Receivable $75; credit Interest Revenue $75.
D. Debit Interest Revenue $175; credit Interest Receivable $175.
E. Debit Interest Revenue $250; credit Interest Receivable $250.
113. A company uses the percent of receivables method to determine its bad debts expense. At the end of the current year, the company’s unadjusted trial balance reported the following selected amounts:
All sales are made on credit. Based on past experience, the company estimates 3.5% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A. Debit Bad Debts Expense $13,975; credit Allowance for Doubtful Accounts $13,975.
B. Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225.
C. Debit Bad Debts Expense $16,475; credit Allowance for Doubtful Accounts $16,475.
D. Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350.
E. Debit Bad Debts Expense $17,350; credit Allowance for Doubtful Accounts $17,350.
114. A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company’s unadjusted trial balance reported the following selected amounts:
All sales are made on credit. Based on past experience, the company estimates 1% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A. Debit Bad Debts Expense $19,750; credit Allowance for Doubtful Accounts $19,750.
B. Debit Bad Debts Expense $15,225; credit Allowance for Doubtful Accounts $15,225.
C. Debit Bad Debts Expense $22,250; credit Allowance for Doubtful Accounts $22,250.
D. Debit Bad Debts Expense $7,350; credit Allowance for Doubtful Accounts $7,350.
E. Debit Bad Debts Expense $21,000; credit Allowance for Doubtful Accounts $21,000.
115. On September 1, a customer’s account balance of $2,300 was deemed to be uncollectible. What entry should be recorded on September 1 to record the write-off assuming the company uses the allowance method?
A. Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300.
B. Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300.
C. Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300.
D. Debit Bad Debts Expense $2,300; credit Allowance for Doubtful Accounts $2,300.
E. Debit Accounts Receivable $250; credit Allowance for Doubtful Accounts $2,300.
116. All of the following statements regarding recognition of receivables under U.S. GAAP and IFRS are True except:
A. U.S. GAAP and IFRS have similar asset criteria that apply to recognition of receivables.
B. Receivables that arise from revenue-generating activities are subject to broadly similar criteria for U.S. GAAP and IFRS.
C. The realization principle under IFRS implies an arm’s length transaction occurs.
D. Both refer to the realization principle and an earnings process.
E. Differences arise mainly from industry-specific guidance under U.S. GAAP.
117. All of the following statements regarding valuation of receivables under U.S. GAAP and IFRS are True except:
A. Both require the allowance method for uncollectibles unless uncollectibles are immaterial.
B. Both require that receivables be reported net of estimated collectibles.
C. Both require that the expenses for estimated collectibles be recorded in the same period revenues generated from those receivables are recorded.
D. Both allow using percent of sales, percent of receivables, or aging of receivables to estimate uncollectibles.
E. Both require that the expense related to uncollectibles be recorded when the receivable is determined to be uncollectible.
118. Under IFRS, the term provision:
A. Refers to expense.
B. Usually refers to a liability whose amount or timing is uncertain.
C. Means establishing a provision for bad debts.
D. Means establishing a contra-asset account.
E. Means establishing an asset account.
