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Test Bank - Chapter9
Principles of Accounting (King Abdulaziz University)
Studocu is not sponsored or endorsed by any college or university
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CHAPTER 9
ACCOUNTING FOR RECEIVABLES
SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY
Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT
True-False Statements
sg
1. 1 K 9. 3 C 17. 3 C 25. 5 K 33. 3 K
sg
2. 1 C 10. 3 C 18. 3 K 26. 5 AP 34. 4 C
sg
3. 1 C 11. 3 C 19. 3 K 27. 5 K 35. 5 K
sg
4. 2 K 12. 3 K 20. 4 K 28. 5 K 36. 8 K
sg
5. 2 K 13. 3 K 21. 4 K 29. 9 K 37. 9 K
6. 2 K 14. 3 K 22. 4 K 30. 9 K
sg
7. 2 K 15. 3 C 23. 4 C 31. 1 K
sg
8. 3 C 16. 3 C 24. 4 K 32. 3 K
Multiple Choice Questions
38. 1 K 63. 3 K 88. 3 C 113. 4 K 138. 8 AN
39. 1 K 64. 3 AP 89. 3 C 114. 4 K 139. 8 C
40. 1 K 65. 3 C 90. 3 C 115. 5 K 140. 9 K
41. 1 C 66. 3 C 91. 3 C 116. 5 AP 141. 9 K
42. 1 K 67. 3 K 92. 3 C 117. 5 AP 142. 9 AP
43. 1 K 68. 3 C 93. 3 C 118. 5 AP 143. 9 AP
44. 2 K 69. 3 K 94. 3 C 119. 5 AP 144. 9 AP
45. 2 K 70. 3 C 95. 3 C 120. 5 K 145. 9 AP
sg
46. 2 K 71. 3 K 96. 3 AP 121. 5 K 146. 1 K
sg
47. 2 K 72. 3 K 97. 3 AP 122. 5 K 147. 2 K
st
48. 2 C 73. 3 K 98. 3 AP 123. 5 C 148. 3 K
sg
49. 2 C 74. 3 K 99. 3 AP 124. 5 AP 149. 3 K
st
50. 2 AP 75. 3 C 100. 3 AP 125. 5 AP 150. 3 K
sg
51. 2 C 76. 3 C 101. 3 AP 126. 5 AP 151. 3 AP
st
52. 2 C 77. 3 C 102. 3 AP 127. 5 AP 152. 4 K
sg
53. 2 AN 78. 3 K 103. 4 C 128. 5 AP 153. 4 AP
st
54. 2 C 79. 3 C 104. 4 AP 129. 6 K 154. 5 K
sg
55. 2 K 80. 3 C 105. 4 C 130. 6 K 155. 5 AP
st
56. 2 AN 81. 3 C 106. 4 K 131. 6 C 156. 8 K
sg
57. 2 C 82. 3 K 107. 4 K 132. 6 K 157. 9 C
st
58. 2 AP 83. 3 K 108. 4 K 133. 6 AP 158. 9 K
59. 3 C 84. 3 AN 109. 4 K 134. 6 K
60. 3 C 85. 3 K 110. 4 K 135. 7 K
61. 3 C 86. 3 K 111. 4 C 136. 7 C
62. 3 C 87. 3 C 112. 4 AP 137. 8 C
Brief Exercises
159. 2 AN 162. 3 AN 165. 5,6 AN 168. 8 AN
160. 3 AN 163. 4 AP 166. 5,8 AP 169. 8 AN
161. 3 AN 164. 5 AP 167. 6 AP 170. 9 AN
sg
This question also appears in the Study Guide.
st
This question also appears in a self-test at the student companion website.
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9-2 Test Bank for Accounting Principles, Eighth Edition
SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY
Exercises
171. 1 C 176. 3 AN 181. 3 AN 186. 5 AP 191. 8 AP
172. 1,8 AN 177. 3 AN 182. 3,8 AN 187. 5 AP 192. 9 AN
173. 2 AN 178. 3 AN 183. 4 AN 188. 5 AN
174. 3 AN 179. 3 AN 184. 4 AP 189. 6,8 AN
175. 3 AN 180. 3 AP 185. 4 AP 190. 6,8 AP
Completion Statements
193. 1 K 196. 3 K 199. 3 K 202. 4 K 205. 8 K
194. 2 K 197. 3 K 200. 3 K 203. 4 K 206. 8 K
195. 2 K 198. 3 K 201. 3 K 204. 5 AP
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
Study Objective 1
1. TF 3. TF 38. MC 40. MC 42. MC 146. MC 172. Ex
2. TF 31. TF 39. MC 41. MC 43. MC 171. Ex 193. C
Study Objective 2
4. TF 44. MC 48. MC 52. MC 56. MC 159. BE
5. TF 45. MC 49. MC 53. MC 57. MC 173. Ex
6. TF 46. MC 50. MC 54. MC 58. MC 194. C
7. TF 47. MC 51. MC 55. MC 147. MC 195. C
Study Objective 3
8. TF 32. TF 69. MC 81. MC 93. MC 150. MC 181. Ex
9. TF 33. TF 70. MC 82. MC 94. MC 151. MC 182. Ex
10. TF 59. MC 71. MC 83. MC 95. MC 160. BE 196. C
11. TF 60. MC 72. MC 84. MC 96. MC 161. BE 197. C
12. TF 61. MC 73. MC 85. MC 97. MC 162. BE 198. C
13. TF 62. MC 74. MC 86. MC 98. MC 174. Ex 199. C
14. TF 63. MC 75. MC 87. MC 99. MC 175. Ex 200. C
15. TF 64. MC 76. MC 88. MC 100. MC 176. Ex 201. C
16. TF 65. MC 77. MC 89. MC 101. MC 177. Ex
17. TF 66. MC 78. MC 90. MC 102. MC 178. Ex
18. TF 67. MC 79. MC 91. MC 148. MC 179. Ex
19. TF 68. MC 80. MC 92. MC 149. MC 180. Ex
Study Objective 4
20. TF 24. TF 105. MC 109. MC 113. MC 163. BE 202. C
21. TF 34. TF 106. MC 110. MC 114. MC 183. Ex 203. C
22. TF 103. MC 107. MC 111. MC 152. MC 184. Ex
23. TF 104. MC 108. MC 112. MC 153. MC 185. Ex
Study Objective 5
25. TF 35. TF 118. MC 122. MC 126. MC 155. MC 186. Ex
26. TF 115. MC 119. MC 123. MC 127. MC 164. BE 187. Ex
27. TF 116. MC 120. MC 124. MC 128. MC 165. BE 188. Ex
28. TF 117. MC 121. MC 125. MC 154. MC 166. BE 204. C
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Accounting for Receivables 9-3
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
Study Objective 6
129. MC 131. MC 133. MC 165. BE 189. Ex
130. MC 132. MC 134. MC 167. BE 190. Ex
Study Objective 7
135. MC 136. MC
Study Objective 8
36. TF 139. MC 168. BE 182. Ex 191. Ex
137. MC 156. MC 169. BE 189. Ex 205. C
138. MC 166. BE 172. Ex 190. Ex 206. C
Study Objective 9
29. TF 37. TF 141. MC 143. MC 145. MC 158. MC 192. Ex
30. TF 140. MC 142. MC 144. MC 157. MC 170. BE
Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise
The chapter also contains one set of ten Matching questions and six Short-Answer Essay
questions.
CHAPTER STUDY OBJECTIVES
1. Identify the different types of receivables. Receivables are frequently classified as (1)
accounts, (2) notes, and (3) other. Accounts receivable are amounts customers owe on
account. Notes receivable are claims for which lenders issue formal instruments of credit as
proof of debt. Other receivables include nontrade receivables such as interest receivable,
loans to company officers, advances to employees, and income taxes refundable.
2. Explain how companies recognize accounts receivable in the accounts. Companies
record accounts receivable at invoice price. They are reduced by sales returns and
allowances. Cash discounts reduce the amount received on accounts receivable. When
interest is charged on a past due receivable, the company adds this interest to the accounts
receivable balance and recognizes it as interest revenue.
3. Distinguish between the methods and bases companies use to value accounts
receivable. There are two methods of accounting for uncollectible accounts: the allowance
method and the direct write-off method. Companies use either the percentage-of-sales or the
percentage-of-receivables basis may be used to estimate uncollectible accounts using the
allowance method. The percentage of sales basis emphasizes the matching principle. The
percentage-of-receivables basis emphasizes the cash realizable value of the accounts
receivable. An aging schedule is often used with this basis.
4. Describe the entries to record the disposition of accounts receivable. When a company
collects an account receivable, it credits Accounts Receivable. When a company sells
(factors) an account receivable, a service charge expense reduces the amount collected.
5. Compute the maturity date of and interest on notes receivable. For a note stated in
months, the maturity date is found by counting the months from the date of issue. For a note
stated in days, the number of days is counted, omitting the issue date and counting the due
date. The formula for computing interest is Face value × Interest rate × Time.
Downloaded by Mahmoud Abdallah ()
Test Bank - Chapter9
Principles of Accounting (King Abdulaziz University)
Studocu is not sponsored or endorsed by any college or university
Downloaded by Mahmoud Abdallah ()
, lOMoARcPSD|22072715
CHAPTER 9
ACCOUNTING FOR RECEIVABLES
SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY
Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT
True-False Statements
sg
1. 1 K 9. 3 C 17. 3 C 25. 5 K 33. 3 K
sg
2. 1 C 10. 3 C 18. 3 K 26. 5 AP 34. 4 C
sg
3. 1 C 11. 3 C 19. 3 K 27. 5 K 35. 5 K
sg
4. 2 K 12. 3 K 20. 4 K 28. 5 K 36. 8 K
sg
5. 2 K 13. 3 K 21. 4 K 29. 9 K 37. 9 K
6. 2 K 14. 3 K 22. 4 K 30. 9 K
sg
7. 2 K 15. 3 C 23. 4 C 31. 1 K
sg
8. 3 C 16. 3 C 24. 4 K 32. 3 K
Multiple Choice Questions
38. 1 K 63. 3 K 88. 3 C 113. 4 K 138. 8 AN
39. 1 K 64. 3 AP 89. 3 C 114. 4 K 139. 8 C
40. 1 K 65. 3 C 90. 3 C 115. 5 K 140. 9 K
41. 1 C 66. 3 C 91. 3 C 116. 5 AP 141. 9 K
42. 1 K 67. 3 K 92. 3 C 117. 5 AP 142. 9 AP
43. 1 K 68. 3 C 93. 3 C 118. 5 AP 143. 9 AP
44. 2 K 69. 3 K 94. 3 C 119. 5 AP 144. 9 AP
45. 2 K 70. 3 C 95. 3 C 120. 5 K 145. 9 AP
sg
46. 2 K 71. 3 K 96. 3 AP 121. 5 K 146. 1 K
sg
47. 2 K 72. 3 K 97. 3 AP 122. 5 K 147. 2 K
st
48. 2 C 73. 3 K 98. 3 AP 123. 5 C 148. 3 K
sg
49. 2 C 74. 3 K 99. 3 AP 124. 5 AP 149. 3 K
st
50. 2 AP 75. 3 C 100. 3 AP 125. 5 AP 150. 3 K
sg
51. 2 C 76. 3 C 101. 3 AP 126. 5 AP 151. 3 AP
st
52. 2 C 77. 3 C 102. 3 AP 127. 5 AP 152. 4 K
sg
53. 2 AN 78. 3 K 103. 4 C 128. 5 AP 153. 4 AP
st
54. 2 C 79. 3 C 104. 4 AP 129. 6 K 154. 5 K
sg
55. 2 K 80. 3 C 105. 4 C 130. 6 K 155. 5 AP
st
56. 2 AN 81. 3 C 106. 4 K 131. 6 C 156. 8 K
sg
57. 2 C 82. 3 K 107. 4 K 132. 6 K 157. 9 C
st
58. 2 AP 83. 3 K 108. 4 K 133. 6 AP 158. 9 K
59. 3 C 84. 3 AN 109. 4 K 134. 6 K
60. 3 C 85. 3 K 110. 4 K 135. 7 K
61. 3 C 86. 3 K 111. 4 C 136. 7 C
62. 3 C 87. 3 C 112. 4 AP 137. 8 C
Brief Exercises
159. 2 AN 162. 3 AN 165. 5,6 AN 168. 8 AN
160. 3 AN 163. 4 AP 166. 5,8 AP 169. 8 AN
161. 3 AN 164. 5 AP 167. 6 AP 170. 9 AN
sg
This question also appears in the Study Guide.
st
This question also appears in a self-test at the student companion website.
Downloaded by Mahmoud Abdallah ()
, lOMoARcPSD|22072715
9-2 Test Bank for Accounting Principles, Eighth Edition
SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY
Exercises
171. 1 C 176. 3 AN 181. 3 AN 186. 5 AP 191. 8 AP
172. 1,8 AN 177. 3 AN 182. 3,8 AN 187. 5 AP 192. 9 AN
173. 2 AN 178. 3 AN 183. 4 AN 188. 5 AN
174. 3 AN 179. 3 AN 184. 4 AP 189. 6,8 AN
175. 3 AN 180. 3 AP 185. 4 AP 190. 6,8 AP
Completion Statements
193. 1 K 196. 3 K 199. 3 K 202. 4 K 205. 8 K
194. 2 K 197. 3 K 200. 3 K 203. 4 K 206. 8 K
195. 2 K 198. 3 K 201. 3 K 204. 5 AP
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
Study Objective 1
1. TF 3. TF 38. MC 40. MC 42. MC 146. MC 172. Ex
2. TF 31. TF 39. MC 41. MC 43. MC 171. Ex 193. C
Study Objective 2
4. TF 44. MC 48. MC 52. MC 56. MC 159. BE
5. TF 45. MC 49. MC 53. MC 57. MC 173. Ex
6. TF 46. MC 50. MC 54. MC 58. MC 194. C
7. TF 47. MC 51. MC 55. MC 147. MC 195. C
Study Objective 3
8. TF 32. TF 69. MC 81. MC 93. MC 150. MC 181. Ex
9. TF 33. TF 70. MC 82. MC 94. MC 151. MC 182. Ex
10. TF 59. MC 71. MC 83. MC 95. MC 160. BE 196. C
11. TF 60. MC 72. MC 84. MC 96. MC 161. BE 197. C
12. TF 61. MC 73. MC 85. MC 97. MC 162. BE 198. C
13. TF 62. MC 74. MC 86. MC 98. MC 174. Ex 199. C
14. TF 63. MC 75. MC 87. MC 99. MC 175. Ex 200. C
15. TF 64. MC 76. MC 88. MC 100. MC 176. Ex 201. C
16. TF 65. MC 77. MC 89. MC 101. MC 177. Ex
17. TF 66. MC 78. MC 90. MC 102. MC 178. Ex
18. TF 67. MC 79. MC 91. MC 148. MC 179. Ex
19. TF 68. MC 80. MC 92. MC 149. MC 180. Ex
Study Objective 4
20. TF 24. TF 105. MC 109. MC 113. MC 163. BE 202. C
21. TF 34. TF 106. MC 110. MC 114. MC 183. Ex 203. C
22. TF 103. MC 107. MC 111. MC 152. MC 184. Ex
23. TF 104. MC 108. MC 112. MC 153. MC 185. Ex
Study Objective 5
25. TF 35. TF 118. MC 122. MC 126. MC 155. MC 186. Ex
26. TF 115. MC 119. MC 123. MC 127. MC 164. BE 187. Ex
27. TF 116. MC 120. MC 124. MC 128. MC 165. BE 188. Ex
28. TF 117. MC 121. MC 125. MC 154. MC 166. BE 204. C
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Accounting for Receivables 9-3
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
Study Objective 6
129. MC 131. MC 133. MC 165. BE 189. Ex
130. MC 132. MC 134. MC 167. BE 190. Ex
Study Objective 7
135. MC 136. MC
Study Objective 8
36. TF 139. MC 168. BE 182. Ex 191. Ex
137. MC 156. MC 169. BE 189. Ex 205. C
138. MC 166. BE 172. Ex 190. Ex 206. C
Study Objective 9
29. TF 37. TF 141. MC 143. MC 145. MC 158. MC 192. Ex
30. TF 140. MC 142. MC 144. MC 157. MC 170. BE
Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise
The chapter also contains one set of ten Matching questions and six Short-Answer Essay
questions.
CHAPTER STUDY OBJECTIVES
1. Identify the different types of receivables. Receivables are frequently classified as (1)
accounts, (2) notes, and (3) other. Accounts receivable are amounts customers owe on
account. Notes receivable are claims for which lenders issue formal instruments of credit as
proof of debt. Other receivables include nontrade receivables such as interest receivable,
loans to company officers, advances to employees, and income taxes refundable.
2. Explain how companies recognize accounts receivable in the accounts. Companies
record accounts receivable at invoice price. They are reduced by sales returns and
allowances. Cash discounts reduce the amount received on accounts receivable. When
interest is charged on a past due receivable, the company adds this interest to the accounts
receivable balance and recognizes it as interest revenue.
3. Distinguish between the methods and bases companies use to value accounts
receivable. There are two methods of accounting for uncollectible accounts: the allowance
method and the direct write-off method. Companies use either the percentage-of-sales or the
percentage-of-receivables basis may be used to estimate uncollectible accounts using the
allowance method. The percentage of sales basis emphasizes the matching principle. The
percentage-of-receivables basis emphasizes the cash realizable value of the accounts
receivable. An aging schedule is often used with this basis.
4. Describe the entries to record the disposition of accounts receivable. When a company
collects an account receivable, it credits Accounts Receivable. When a company sells
(factors) an account receivable, a service charge expense reduces the amount collected.
5. Compute the maturity date of and interest on notes receivable. For a note stated in
months, the maturity date is found by counting the months from the date of issue. For a note
stated in days, the number of days is counted, omitting the issue date and counting the due
date. The formula for computing interest is Face value × Interest rate × Time.
Downloaded by Mahmoud Abdallah ()
