Management 200 Exam 2 ~ Purdue |\ |\ |\ |\ |\ |\
University questions with answers |\ |\ |\
Credit sales are recorded as
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A. Debit Cash, credit Deferred Revenue
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B. Debit Service Revenue, credit Accounts Receivable
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C. Debit Cash, credit Service Revenue
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D. Debit Accounts Receivable, credit Service Revenue -
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CORRECT ANSWERS ✔✔D. Debit Accounts Receivable, |\ |\ |\ |\ |\ |\
credit Service Revenue
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Identify the condition(s) that must exist for a sale and the
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related receivable to be recognized.
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A. Collection of cash is probable
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B. The company must have collected cash from at least
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one previous sale to the customer
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C. Goods or services have been provided to the customer
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D. Two of the other answers are conditions that must exist
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- CORRECT ANSWERS ✔✔D. Two of the other answers are
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conditions that must exist |\ |\ |\
,A and C
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Which of the following items are classified as receivables
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A. Tax refund claims
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B. Amounts owed by customers
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C. Amounts loaned and expected to be collected
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D. All of the other answers are classified as receivables -
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CORRECT ANSWERS ✔✔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
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B Lower profitability
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C. Lower Revenues
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D. All of the other answers are disadvantages of
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extending credit to customers - CORRECT ANSWERS ✔✔A. |\ |\ |\ |\ |\ |\ |\
Delay or failure to collect cash
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The Sales Returns account is an expense account
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,A. True
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B. False - CORRECT ANSWERS ✔✔B. False
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Sales Returns is a contra revenue account
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Which of the following computations would be used to
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compute Net Revenue? |\ |\
A. Total Revenue + Accounts Receivable - Sales Discounts
|\ |\ |\ |\ |\ |\ |\ |\ |\
Sales Allowances
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B. Net Revenue + Sales Allowances - Sales Discounts
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C. Total Revenue - Sales Discounts - Sales Allowances
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D. Net Income - Change in Accounts Receivable -
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CORRECT ANSWERS ✔✔C. Total Revenue - Sales
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Discounts - Sales Allowances |\ |\ |\
Trade discounts represent a discount offered to the
|\ |\ |\ |\ |\ |\ |\ |\
purchasers for a quick payment |\ |\ |\ |\
A. True
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B. False - CORRECT ANSWERS ✔✔B. False
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Trade discounts represent a reduction in the listed price of
|\ |\ |\ |\ |\ |\ |\ |\ |\
a product and service
|\ |\ |\ |\
, 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
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B. Sales Discount
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C. Sales Return
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D. Sales Allowances - CORRECT ANSWERS ✔✔B. Sales
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Discount
When a comany sells a $100 service with a 20% trade
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
discount, $80 of revenue is recognized.
|\ |\ |\ |\ |\ |\
A. True
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B. False - CORRECT ANSWERS ✔✔A. True
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A sales allowance is recorded as a debit to Accounts
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Receivable and a credit to Sales Allowances. |\ |\ |\ |\ |\ |\
A. True
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B. False - CORRECT ANSWERS ✔✔B. False
|\ |\ |\ |\ |\ |\
University questions with answers |\ |\ |\
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 -
|\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔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
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
- CORRECT ANSWERS ✔✔D. Two of the other answers are
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
conditions that must exist |\ |\ |\
,A and C
|\ |\
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 -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔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 - CORRECT ANSWERS ✔✔A. |\ |\ |\ |\ |\ |\ |\
Delay or failure to collect cash
|\ |\ |\ |\ |\ |\
The Sales Returns account is an expense account
|\ |\ |\ |\ |\ |\ |\
,A. True
|\
B. False - CORRECT ANSWERS ✔✔B. False
|\ |\ |\ |\ |\ |\ |\
Sales Returns is a contra revenue account
|\ |\ |\ |\ |\ |\
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 -
|\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔C. Total Revenue - Sales
|\ |\ |\ |\ |\ |\ |\
Discounts - Sales Allowances |\ |\ |\
Trade discounts represent a discount offered to the
|\ |\ |\ |\ |\ |\ |\ |\
purchasers for a quick payment |\ |\ |\ |\
A. True
|\
B. False - CORRECT ANSWERS ✔✔B. False
|\ |\ |\ |\ |\ |\
Trade discounts represent a reduction in the listed price of
|\ |\ |\ |\ |\ |\ |\ |\ |\
a product and service
|\ |\ |\ |\
, 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
|\ |\
C. Sales Return
|\ |\
D. Sales Allowances - CORRECT ANSWERS ✔✔B. Sales
|\ |\ |\ |\ |\ |\ |\ |\
Discount
When a comany sells a $100 service with a 20% trade
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
discount, $80 of revenue is recognized.
|\ |\ |\ |\ |\ |\
A. True
|\
B. False - CORRECT ANSWERS ✔✔A. True
|\ |\ |\ |\ |\ |\
A sales allowance is recorded as a debit to Accounts
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Receivable and a credit to Sales Allowances. |\ |\ |\ |\ |\ |\
A. True
|\
B. False - CORRECT ANSWERS ✔✔B. False
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