Question : 56.Separate accounts receivable information for each customer important because it : 1237048

56.Separate accounts receivable information for each customer is important because it reveals all of the following except:   

A.How much each customer has purchased on credit.

B.How much each customer has paid.

C.How much each customer still owes.

D.The basis for sending bills to customers.

E.When the customer intends to pay outstanding balances.

57.A credit sale of $5,275 to a customer would result in which of the following?   

A.A debit to the Accounts Receivable account in the general ledger and a debit to the customer’s account in the accounts receivable subsidiary ledger.

B.A credit to the Accounts Receivable account in the general ledger and a credit to the customer’s account in the accounts receivable subsidiary ledger.

C.A debit to the Accounts Receivable account in the general ledger and a credit to the customer’s account in the accounts receivable subsidiary ledger.

D.A credit to the Accounts Receivable account in the general ledger and a debit to the customer’s account in the accounts receivable subsidiary ledger.

E.A credit to Sales and a credit to the customer’s account in the accounts receivable subsidiary ledger.

58.Sellers allow customers to use credit cards for all of the following reasons except:   

A.To be able to charge more due to fees and interest.

B.To lessen the risk of extending credit to customers who cannot pay.

C.To speed up receipt of cash from the credit sale.

D.To increase total sales volume.

E.To avoid having to evaluate a customer’s credit standing for each sale.

59.Which of the following is not true regarding a credit card expense?   

A.Credit card expense may be classified as a “discount” deducted from sales to get net sales.

B.Credit card expense may be classified as a selling expense.

C.Credit card expense may be classified as an administrative expense.

D.Credit card expense is not recorded by the seller.

E.Credit card expense is a fee the seller pays for services provided by the card company.

60.A promissory note received from a customer in exchange for an account receivable is recorded by the payee as:   

A.A cash equivalent.

B.An account receivable.

C.A note receivable.

D.A short-term investment.

E.A note payable.

61.The person who signs a note receivable and promises to pay the principal and interest is the:   

A.Maker.

B.Payee.

C.Holder.

D.Receiver.

E.Owner.

62.Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?   

A.Relevance.

B.Full disclosure.

C.Evaluation.

D.Materiality.

E.Matching.

63.A promissory note:   

A.Is a short-term investment for the maker.

B.Is a written promise to pay a specified amount of money at a certain date.

C.Is a liability to the payee.

D.Is another name for an installment receivable.

E.Cannot be used in payment of an account receivable.

64.The maturity date of a note receivable:   

A.Is the day of the credit sale.

B.Is the day the note was signed.

C.Is the day the note is due to be repaid.

D.Is the date of the first payment.

E.Is the last day of the month.

65.The interest accrued on $7,500 at 6% for 90 days is:    

A.$450.00.

B.$37.50.

C.$112.50.

D.$11.25.

E.$1,800.00.