Exam/Test/Quiz for Ch. 6 T/F acc
Accounting 201 with Dr. B at Michigan State University
About this deck
By: Kristine Osentoski
Textbook:
Financial Accounting
Created: 2009-03-03
Size: 20 flashcards
Views: 5
Textbook:
Financial AccountingCreated: 2009-03-03
Size: 20 flashcards
Views: 5
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the credit terms of 1 / 15 , n / 60 provide a discout period of 15 days
(2 answers)
(2 answers)
- true
- false
Ch. 6
(20 answers)
(20 answers)
- for many companies, revenue is recognized when title and risk of ownership of purchased goods passes to the buyer
- the term FOB stands for freight of buyer
- a credit card discout and a sales discoutn are essentially the same thing
- the credit terms of 2 / 10 , n / 60 provide a credit period of 10 days
- the credit terms of 1 / 15 , n / 60 provide a discout period of 15 days
- the terms sales discount, cash discount, and trade discount are interchangeable ( or synonymous ) termms
- if a business offers a customer credit terms of 2 / 10 , n / 60 , on a 100 sale, the annual rateo f itnerest is equivlanet to 13.55%
- gross profit ( or gross margin ) is equal to net sales minus the cost of goods sold ( cost of sales )
- nontrade receivables arise from transactions other than the normal course of sellign merchandise and services
- in order to determine the maturity alue of a note receivable, you need to know the principal, due date, and rate of itnerest
- having bad debts recognized int he same time period as the sales that resulted in bad debts is a requirement of the revenue principal
- the recognition of bad debts under the allowance method requires an adjusting entry at the end of the accoutnign period in which fthe accuont alowance for doubtful accoutns is credited
- under teh allowance method of recongizing bad debts, during the year when an account receivable is judged to be uncollectible and is written off, the net book value of accouts receivable decreases
- the allowance for doubtful accoutns accoutn is an operating expense account
- when bad debts are estimated ont he basis of a percentage of credit sales, the allowance for doubtful accoutns balance must be adjusted so taht he adjusted balance of the account will be expactly equal to the percent of sales to be written off
- teh aging of accounts receivable method of determining the bad debt expense requires that the adjusted allowance for doubtful accoutns balance be exactly equal to teh estimated uncollectible accounts based on the analysis of an aging schedule
- the accounts receivable turnover is computed by dividing ent sales by the average net trade accoutns receivable
- granting later payment declines, such as changing credit terms from 2 / 10, n / 30 to 2/ 10, n / 60, will most likely increase the accotnu receivable turnover
- the number of days taht are required to make a credit sale and collect the erceivable, on an average, can be determined by dividing the accuotn receivable turnover into 365
- when using the indirect method of reporting cash flows, an increase in accotnus receivable trade receivables is added tot eh ent income figure int he determination fo cash flow from oeprating activites
when bad debts are estimated ont he basis of a percentage of credit sales, the allowance for doubtful accoutns balance must be adjusted so taht he adjusted balance of the account will be expactly equal to the percent of sales to be written off
(2 answers)
(2 answers)
- treu
- false
in order to determine the maturity alue of a note receivable, you need to know the principal, due date, and rate of itnerest
(2 answers)
(2 answers)
- true
- false
the allowance for doubtful accoutns accoutn is an operating expense account
(2 answers)
(2 answers)
- true
- false
the recognition of bad debts under the allowance method requires an adjusting entry at the end of the accoutnign period in which fthe accuont alowance for doubtful accoutns is credited
(2 answers)
(2 answers)
- treu
- false
the term FOB stands for freight of buyer
(2 answers)
(2 answers)
- true
- false
having bad debts recognized int he same time period as the sales that resulted in bad debts is a requirement of the revenue principal
(2 answers)
(2 answers)
- true
- false
if a business offers a customer credit terms of 2 / 10 , n / 60 , on a 100 sale, the annual rateo f itnerest is equivlanet to 13.55%
(2 answers)
(2 answers)
- true
- false
the terms sales discount, cash discount, and trade discount are interchangeable ( or synonymous ) termms
(2 answers)
(2 answers)
- true
- false
a credit card discout and a sales discoutn are essentially the same thing
(2 answers)
(2 answers)
- true
- false
for many companies, revenue is recognized when title and risk of ownership of purchased goods passes to the buyer
(2 answers)
(2 answers)
- true
- false
the number of days taht are required to make a credit sale and collect the erceivable, on an average, can be determined by dividing the accuotn receivable turnover into 365
(2 answers)
(2 answers)
- true
- false
when using the indirect method of reporting cash flows, an increase in accotnus receivable trade receivables is added tot eh ent income figure int he determination fo cash flow from oeprating activites
(2 answers)
(2 answers)
- true
- false
gross profit ( or gross margin ) is equal to net sales minus the cost of goods sold ( cost of sales )
(2 answers)
(2 answers)
- true
- false
under teh allowance method of recongizing bad debts, during the year when an account receivable is judged to be uncollectible and is written off, the net book value of accouts receivable decreases
(2 answers)
(2 answers)
- true
- false
teh aging of accounts receivable method of determining the bad debt expense requires that the adjusted allowance for doubtful accoutns balance be exactly equal to teh estimated uncollectible accounts based on the analysis of an aging schedule
(2 answers)
(2 answers)
- true
- false
the accounts receivable turnover is computed by dividing ent sales by the average net trade accoutns receivable
(2 answers)
(2 answers)
- true
- false
nontrade receivables arise from transactions other than the normal course of sellign merchandise and services
(2 answers)
(2 answers)
- true
- false
the credit terms of 2 / 10 , n / 60 provide a credit period of 10 days
(2 answers)
(2 answers)
- true
- false
About this deck
By: Kristine Osentoski
Textbook: Financial Accounting
Created: 2009-03-03
Size: 20 flashcards
Views: 5
Textbook:
Financial AccountingCreated: 2009-03-03
Size: 20 flashcards
Views: 5
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy