Accounts Receivable, Finance And Accounting

Question: Athens Corp. sold 80% pro rata interest in a $2,000,000 note receivable to Sparta Company Ltd. for $1,920,000. The note was originally issued at its face amount. Future benefits and costs of servicing the note are immaterial. If the provisions of SFAS 140 are followed, the amount of gain or loss that the former should recognize on this transfer of a partial interest _________ .
A
($80,000)

B
$0

C
$320,000

D
$400,000

Note: answer not sure
1. Report
Question: Most of the companies expect that over ____ of their billings will be collected.
A
99.0%

B
99.5%

C
99.9%

D
None of these

Note: answer not sure
1. Report
Question: A company would choose to factor it's receivables because:
A
it is the same as turning them over to a collection agency

B
they need to raise capital and do not want to rely on the credit worthiness of the business

C
they have given up hope of ever collecting on the items

D
it is easier than trying to collect themselves

Note: answer not sure
1. Report
Question: Why is it important to review and analyze AR ratios?
A
You can compare your performance with industry standards

B
You can compare your performance with that of the other companies

C
You can compare your current results with the past results

D
All of these

Note: answer not sure
1. Report
Question: On January 1, Davis College assigned $500,000 of Accounts Receivable to the Scholastic Finance Company. It gave a 14% note for $450,000 representing 90% of the assigned accounts and received proceeds of $432,000 after deduction of a Scholastic, including interest for 1 month on the remittance. By what amount will Accounts Receivable be assigned and notes payable decreased? A/R Assigned Notes Payable
A
$80,000 $74,750

B
$80,000 $80,000

C
$72,000 $74,750

D
$74,750 $80,000

Note: answer not sure
1. Report
Question: At the end of the fiscal year, Accounts Receivable has a balance of $100,000 and Allowance for Doubtful Accounts has a balance of $7,000. The expected net realizable value of the Accounts Receivable will be:
A
$107,000

B
$100,000

C
$93,000

D
$7,000

Note: answer not sure
1. Report
Question: Which of the following would the AR department book an adjustment for at year end?
A
Outstanding payroll

B
Expenses for the company holiday party

C
Bonus expected to be paid to all company officers

D
True up allowance for doubtful accounts

Note: answer not sure
1. Report
Question: Why would a service item be kept in inventory in the accounting system?
A
It would not; service is not an inventory item

B
It allows for associating a standard price with the service item and makes invoicing easier

C
It assigns a value to the services of the company for the balance sheet

Note: answer not sure
1. Report
Question: Why do companies bother with adjustments? Wouldn't it be easier to let items clear up the following month?
A
It is required by GAAP and to comply with the fundamental rules of accounting

B
Accountants are detail oriented and enjoy making adjustments

C
It is easy to fiddle with numbers for better earnings results

Note: answer not sure
1. Report
Question: Advances received from the customers are invoiced at the time of advance payment?
A
True

B
False

Note: answer not sure
1. Report

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Question: Most of the companies expect that over ____ of their billings will be collected.

Question: A company would choose to factor it's receivables because:

Question: Why is it important to review and analyze AR ratios?

Question: At the end of the fiscal year, Accounts Receivable has a balance of $100,000 and Allowance for Doubtful Accounts has a balance of $7,000. The expected net realizable value of the Accounts Receivable will be:

Question: Which of the following would the AR department book an adjustment for at year end?

Question: Why would a service item be kept in inventory in the accounting system?

Question: Why do companies bother with adjustments? Wouldn't it be easier to let items clear up the following month?

Question: Advances received from the customers are invoiced at the time of advance payment?