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MGMT 200 Exam 2 Questions And
Correct Answers/ Latest Update /
Already Graded
QUIZ:Credit sales are recorded as
A. Debit Cash, credit Deferred Revenue
B. Debit Service Revenue, credit Accounts
Receivable
C. Debit Cash, credit Service Revenue
D. Debit Accounts Receivable, credit Service
Revenue
Ans: D. Debit Accounts Receivable, credit Service
Revenue
Identify the condition(s) that must exist for a sale and
the related receivable to be recognized.
A. Collection of cash is probable
B. The company must have collected cash from at
least one previous sale to the customer
C. Goods or services have been provided to the
customer
D. Two of the other answers are conditions that
must exist
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Ans: D. Two of the other answers are conditions that
must exist
Which of the following items are classified as
receivables?
A. Tax refund claims
B. Amounts owed by customers
C. Amounts loaned and expected to be collected
D. All of the other answers are classified as
receivables
Ans: D. All of the other answers are classified as
receivables
Identify the likely disadvantage(s) of extending credit to
customers
A. Delay or failure to collect cash
B. Lower profitability
C. Lower revenues
D. All of the other answers are disadvantages of
extending credit to customers
Ans: A. Delay or failure to collect cash
The Sales Returns account is an expense account
A. True
B. False
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Ans: B. False
Which of the following computations would be used to
compute Net Revenue?
A. Total Revenue + Accounts Receivable - Sales
Discounts - Sales Allowances
B. Net Revenue + Sales Allowances - Sales
Discounts
C. Total Revenue - Sales Discounts - Sales
Allowances
D. Net Income - Change in Accounts Receivable
Ans: C. Total Revenue - Sales Discounts - Sales
Allowances
Trade discounts represent a discount offered to the
purchasers for quick payment.
A. True
B. False
Ans: B. False -- Sales Discount
When customers purchase products on account,
Knomark, Inc. offers them a 2% reduction in the
amount owed if they pay within 10 days. This is an
example of a:
A. Bad debt
B. Sales discount
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C. Sales return
D. Sales allowances
Ans: B. Sales discount
When a company sells a $100 service with a 20% trade
discount, $80 of revenue is recognized.
A. True
B. False
Ans: A. True
A sales allowance is recorded as a debit to Accounts
Receivable and a credit to Sales Allowances.
A. True
B. False
Ans: B. False
The net realizable value of accounts receivable is the
full amount owed by customers
A. True
B. False
Ans: B. False
LePage's Inc. shipped the wrong color of paint to a
customer. The customer agreed to keep the paint upon
being offered a 15% price reduction. The price
reduction is an example of a:
MGMT 200 Exam 2 Questions And
Correct Answers/ Latest Update /
Already Graded
QUIZ:Credit sales are recorded as
A. Debit Cash, credit Deferred Revenue
B. Debit Service Revenue, credit Accounts
Receivable
C. Debit Cash, credit Service Revenue
D. Debit Accounts Receivable, credit Service
Revenue
Ans: D. Debit Accounts Receivable, credit Service
Revenue
Identify the condition(s) that must exist for a sale and
the related receivable to be recognized.
A. Collection of cash is probable
B. The company must have collected cash from at
least one previous sale to the customer
C. Goods or services have been provided to the
customer
D. Two of the other answers are conditions that
must exist
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Ans: D. Two of the other answers are conditions that
must exist
Which of the following items are classified as
receivables?
A. Tax refund claims
B. Amounts owed by customers
C. Amounts loaned and expected to be collected
D. All of the other answers are classified as
receivables
Ans: D. All of the other answers are classified as
receivables
Identify the likely disadvantage(s) of extending credit to
customers
A. Delay or failure to collect cash
B. Lower profitability
C. Lower revenues
D. All of the other answers are disadvantages of
extending credit to customers
Ans: A. Delay or failure to collect cash
The Sales Returns account is an expense account
A. True
B. False
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Ans: B. False
Which of the following computations would be used to
compute Net Revenue?
A. Total Revenue + Accounts Receivable - Sales
Discounts - Sales Allowances
B. Net Revenue + Sales Allowances - Sales
Discounts
C. Total Revenue - Sales Discounts - Sales
Allowances
D. Net Income - Change in Accounts Receivable
Ans: C. Total Revenue - Sales Discounts - Sales
Allowances
Trade discounts represent a discount offered to the
purchasers for quick payment.
A. True
B. False
Ans: B. False -- Sales Discount
When customers purchase products on account,
Knomark, Inc. offers them a 2% reduction in the
amount owed if they pay within 10 days. This is an
example of a:
A. Bad debt
B. Sales discount
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C. Sales return
D. Sales allowances
Ans: B. Sales discount
When a company sells a $100 service with a 20% trade
discount, $80 of revenue is recognized.
A. True
B. False
Ans: A. True
A sales allowance is recorded as a debit to Accounts
Receivable and a credit to Sales Allowances.
A. True
B. False
Ans: B. False
The net realizable value of accounts receivable is the
full amount owed by customers
A. True
B. False
Ans: B. False
LePage's Inc. shipped the wrong color of paint to a
customer. The customer agreed to keep the paint upon
being offered a 15% price reduction. The price
reduction is an example of a:
