Question :
66.A 90-day note issued April 10 matures on:
A. July 9.
B. July 10.
C. Jul : 1258924
66.A 90-day note issued on April 10 matures on:
A. July 9.
B. July 10.
C. July 11.
D. July 12.
E. July 13.
67.A company receives a 10%, 120-day note for $1,500. The total interest due on the maturity date is:
A. $50.00.
B. $150.00.
C. $75.00.
D. $37.50.
E. $87.50.
$1,500 * 0.10 * 120/360 = $50.00
68.A company borrowed $10,000 by signing a 180-day promissory note at 9%. The total interest due on the maturity date is:
A. $900
B. $75
C. $450
D. $300
E. $1,800
$10,000 * 0.09 * 180/360 = $450
69.A company borrowed $10,000 by signing a 180-day promissory note at 9%. The maturity value of the note is:
A. $10,450
B. $10,900
C. $10,075
D. $11,800
E. $10,300
$10,000 + ($10,000 * 0.09 * 180/360) = $10,450
70.A finance company or bank that purchases and takes ownership of another company’s accounts receivable is called a:
A. Payer.
B. Pledger.
C. Factor.
D. Payee.
E. Pledgee.
71.Factoring receivables is beneficial to a seller for all of the following reasons except:
A. Allows firms to receive cash earlier.
B. Passes ownership of the receivables to the factor.
C. There are no fees for factoring.
D. Seller avoids the cost of billing and accounting for receivables.
E. May transfer the risk of bad debts to the factor.
72.A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a:
A. Debit to Cash of $45,000, a debit to Factoring Fee Expense of $1,800, and credit to Accounts Receivable of $46,800.
B. Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000.
C. Debit to Cash of $43,200, a debit to Factoring Fee Expense of $1,800, and a credit to Accounts Receivable of $45,000.
D. Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800.
E. Debit to Cash of $45,000 and a credit to Notes Payable of $45,000.
$45,000 * 0.04 = $1,800; $45,000 – $1,800 = $43,200
73.The quality of receivables refers to:
A. The creditworthiness of sellers.
B. The speed of collection.
C. The likelihood of collection without loss.
D. Sales turnover.
E. The interest rate.
74.The account receivable turnover measures:
A. How long it takes to sell accounts receivable to a factor.
B. How often, on average, receivables are received and collected during the period.
C. The relation of cash sales to credit sales.
D. How long it takes to sell merchandise inventory.
E. All of the options are correct.
75.The accounts receivable turnover is calculated by:
A. Dividing net sales by average accounts receivable.
B. Dividing net sales by average accounts receivable and multiplying by 365.
C. Dividing average accounts receivable by net sales.
D. Dividing average accounts receivable by net sales and multiplying by 365.
E. Dividing net income by average accounts receivable.
