GSU ACCT 2101 Test 3 Questions And
All Complete Correct Answers.
Receivables - Answer Amounts due from individuals and companies. 3 different types.
Accounts Receivable (A/R) - Answer Amounts customer owe on account. Pay within 30-60
days.
Notes Receivable (N/R) - Answer Written promise for amounts to be received. 60-90 days or
longer.
Other Receivables - Answer Interest receivable loans to company officers.
Bad Debt Expense (BDE) - Answer Losses from extending credit.
Allowance for Doubtful Accounts - Answer AFDA
2 Issues with Accounts Receivables - Answer 1. Recognizing A/R
2. Valuing A/R
Valuing Accounts Receivable - 2 Methods - Answer 1. Direct Write-off
ex. BDE 100
A/R 100
2. Allowance Method
ex. (estimate entry)
BDE 200
AFDA 200
(write-off entry)
AFDA 50
A/R 50
, AFDA 300
Cash 300
A/R 300
Percentage of Receivables Basic - Answer Estimating bad debt expense as a percentage
amount between amount of receivables and expected losses.
Promissory Note - Answer A written promise to pay a specified amount of money on demand
or at a definite time period.
Net Credit Sales (NCS) - Answer Net Sales - Cash Sales
5 Issues with N/R - Answer 1. deteriorating maturity date
2. computing interest (I=PRT)
3. recognizing N/R
4. valuing N/R
5. disposing N/R
A/R Turnover - Answer Net Credit Sales / Average Net Accounts Receivable
Average Collection Period - Answer 365 / Accounts Receivable Turnover
Cost - Answer All expenditures necessary to acquire an asset and make it ready for its
intended use.
Historical Cost Principle - Answer Requires that companies record plant assets at cost.
Cash Equivalent Price - Answer The fair value of the asset given up or the fair value received,
whichever is more determinable.
Determine the amount to be reported as the cost of the land - Answer Cash + Amount of
Property Demolished + Attorney's Fee + Real Estate Brokers Fee - (Salvaged Materials Sold)
All Complete Correct Answers.
Receivables - Answer Amounts due from individuals and companies. 3 different types.
Accounts Receivable (A/R) - Answer Amounts customer owe on account. Pay within 30-60
days.
Notes Receivable (N/R) - Answer Written promise for amounts to be received. 60-90 days or
longer.
Other Receivables - Answer Interest receivable loans to company officers.
Bad Debt Expense (BDE) - Answer Losses from extending credit.
Allowance for Doubtful Accounts - Answer AFDA
2 Issues with Accounts Receivables - Answer 1. Recognizing A/R
2. Valuing A/R
Valuing Accounts Receivable - 2 Methods - Answer 1. Direct Write-off
ex. BDE 100
A/R 100
2. Allowance Method
ex. (estimate entry)
BDE 200
AFDA 200
(write-off entry)
AFDA 50
A/R 50
, AFDA 300
Cash 300
A/R 300
Percentage of Receivables Basic - Answer Estimating bad debt expense as a percentage
amount between amount of receivables and expected losses.
Promissory Note - Answer A written promise to pay a specified amount of money on demand
or at a definite time period.
Net Credit Sales (NCS) - Answer Net Sales - Cash Sales
5 Issues with N/R - Answer 1. deteriorating maturity date
2. computing interest (I=PRT)
3. recognizing N/R
4. valuing N/R
5. disposing N/R
A/R Turnover - Answer Net Credit Sales / Average Net Accounts Receivable
Average Collection Period - Answer 365 / Accounts Receivable Turnover
Cost - Answer All expenditures necessary to acquire an asset and make it ready for its
intended use.
Historical Cost Principle - Answer Requires that companies record plant assets at cost.
Cash Equivalent Price - Answer The fair value of the asset given up or the fair value received,
whichever is more determinable.
Determine the amount to be reported as the cost of the land - Answer Cash + Amount of
Property Demolished + Attorney's Fee + Real Estate Brokers Fee - (Salvaged Materials Sold)
