Question : 101. When referring to a note receivable or promissory note A. the maker : 1239840

101. When referring to a note receivable or promissory note 
A. the maker is the party to whom the money is due.
B. the note is not considered a formal credit instrument.
C. the note cannot be factored to another party.
D. the note may be used to settle an accounts receivable.

102. When a company receives an interest-bearing note receivable, it will 
A. debit Notes Receivable for the maturity value of the note.
B. debit Notes Receivable for the face value of the note.
C. credit Notes Receivable for the maturity value of the note.
D. credit Notes Receivable for the face value of the note.

103. Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts receivable.  What entry will Paper Company make upon receiving the note? 
A. Notes Receivable                                                     6,000
           Accounts Receivable—Dame Company                            6,000
B. Notes Receivable                                                     6,090
           Accounts Receivable—Dame Company                            6,090
C. Notes Receivable                                                     6,090
                  Accounts Receivable—Dame Company                     6,000
                  Interest Revenue                                                               90
D. Notes Receivable                                                     6,000
Interest Revenue                                                           90
           Accounts Receivable—Dame Company                            6,000
           Interest Receivable                                                                  90

104. The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is 
A. $40,000
B. $40,400
C. $43,600
D. $44,000

105. Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. Harper Company prepares financial statements on March 31.  What adjusting entry should be made before the financial statements can be prepared? 
A. Cash                                           200
           Interest Revenue                                         200
B. Interest Receivable                              800
           Interest Revenue                                         800
C. Interest Receivable                              200
           Interest Revenue                                         200
D. Note Receivable                             40,000
           Cash                                                        40,000

106. On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company.  The terms of the note were $20,000 face value and 6% interest.  On October 30, the journal entry to record the collection of the note should include a 
A. credit to Notes Receivable for $20,300
B. debit to Interest Receivable for $300
C. credit to Interest Revenue for $300
D. debit to Notes Receivable for $20,000

107. Current assets are usually listed in order  
A. of the due date
B. of the size
C. alphabetically
D. of liquidity

108. Accounts Receivable Turnover measures  
A. how frequently during the year the accounts receivable are converted to cash
B. the number of days of accounts receivable outstanding
C. the fair market value of accounts receivable
D. the efficiency of the accounts payable function

109. The number of days’ sales in receivables  
A. is an estimate of the length of time the receivables have been outstanding
B. measures the number of times the receivables turn over each year
C. is Net Credit Sales divided by Average Receivables
D. is not meaningful and therefore is not used

110. Given the following information, compute Accounts Receivable Turnover:
 

Gross Sales:     $150,000

Accounts Receivable, Beginning of Year:   $18,000

Net Sales:        $135,000

Accounts Receivable, End of Year:             $22,000

 
A. 6.75
B. 7.5
C. 6.13
D. 6.82

111. At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $2,500,000.  An analysis of receivables estimates uncollectible receivables as $25,000.

Determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance of Doubtful Accounts, respectively.
 
A. $19,500 and $25,000
B. $30,500 and $525,000
C. $19,500 and $525,000
D. $30,500 and $25,000

112. At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $2,500,000.  An analysis of receivables estimates uncollectible receivables as $25,000.

Determine the net realizable value of accounts receivable after adjustment. (Hint: Determine the amount of the adjusting entry for bad debt expense and the adjusted balance Allowance of Doubtful Accounts.)
 
A. $550,000
B. $544,500
C. $525,000
D. $575,000