Accounting exam 3- Cengage adaptive study problems – ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
questions with verified detailed answers ||//\\|| ||//\\|| ||//\\|| ||//\\||
What do accountants mean when they say revenue can be recognized under the accrual
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basis of accounting? - ✔✔the company's performance obligation is satisfied.
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Channel stuffing is - ✔✔shipping more goods to a customer than the customer ordered ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
near the end of a period so sales can be recognized at the time of shipment.
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Significant changes in sales revenue and sales returns and allowances should be ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
investigated by management. This statement is - ✔✔true for companies that sell products ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
only.
To encourage prompt payment, businesses may offer a sales discount. The discount is a
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reduction of the normal selling price. Which of the following is NOT a reason that a seller ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
would offer its customers a 5% cash discount? - ✔✔The company is able to reduce its
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revenue, which reduces its taxes ||//\\|| ||//\\|| ||//\\|| ||//\\||
Which of the following describes an account receivable? - ✔✔A customer's promise to pay
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that is classified as a current asset
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The recognition and valuation of receivables under U.S. GAAP is generally the same as
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under - ✔✔IFRS. ||//\\|| ||//\\||
In terms of a company's accounts receivable, the "net realizable value" is - ✔✔the amount
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of cash the company expects to collect.
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, The underlying difference between the percentage of credit sales method and the aging
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method is - ✔✔the percent of credit sales method is primarily concerned with appropriately ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
estimating the bad debt expense on the income statement.
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All of the following are advantages of factoring EXCEPT
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a.immediate receipt of cash. ||//\\|| ||//\\|| ||//\\||
b.the fees for factoring can be expensive. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
c.fewer employees are needed to manage these accounts. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
d.factor accepts all risks of collectability. - ✔✔the fees for factoring can be expensive. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
All of the following are true about nonbank credit cards EXCEPT
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a.they are usually less expensive than bank credit cards. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
b.some businesses may not accept nonbank cards. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
c.they may charge a higher service charge to the seller. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
d.they also result in a receivable for the seller because they do not immediately pay cash to
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the seller. - ✔✔a.they are usually less expensive than bank credit cards.
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The interest on a note refers to - ✔✔the compensation paid to the lender for giving up the
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use of the resources for the period.
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A 10%, $5,000 note is dated July 1. The principal and interest are due at the end of six
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months. How much interest will be paid on the due date? - ✔✔$250 ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
The principal of a note receivable refers to the amount - ✔✔of money that was loaned.
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questions with verified detailed answers ||//\\|| ||//\\|| ||//\\|| ||//\\||
What do accountants mean when they say revenue can be recognized under the accrual
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basis of accounting? - ✔✔the company's performance obligation is satisfied.
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Channel stuffing is - ✔✔shipping more goods to a customer than the customer ordered ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
near the end of a period so sales can be recognized at the time of shipment.
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Significant changes in sales revenue and sales returns and allowances should be ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
investigated by management. This statement is - ✔✔true for companies that sell products ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
only.
To encourage prompt payment, businesses may offer a sales discount. The discount is a
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reduction of the normal selling price. Which of the following is NOT a reason that a seller ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
would offer its customers a 5% cash discount? - ✔✔The company is able to reduce its
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revenue, which reduces its taxes ||//\\|| ||//\\|| ||//\\|| ||//\\||
Which of the following describes an account receivable? - ✔✔A customer's promise to pay
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that is classified as a current asset
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The recognition and valuation of receivables under U.S. GAAP is generally the same as
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under - ✔✔IFRS. ||//\\|| ||//\\||
In terms of a company's accounts receivable, the "net realizable value" is - ✔✔the amount
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of cash the company expects to collect.
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, The underlying difference between the percentage of credit sales method and the aging
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method is - ✔✔the percent of credit sales method is primarily concerned with appropriately ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
estimating the bad debt expense on the income statement.
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All of the following are advantages of factoring EXCEPT
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a.immediate receipt of cash. ||//\\|| ||//\\|| ||//\\||
b.the fees for factoring can be expensive. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
c.fewer employees are needed to manage these accounts. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
d.factor accepts all risks of collectability. - ✔✔the fees for factoring can be expensive. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
All of the following are true about nonbank credit cards EXCEPT
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a.they are usually less expensive than bank credit cards. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
b.some businesses may not accept nonbank cards. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
c.they may charge a higher service charge to the seller. ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
d.they also result in a receivable for the seller because they do not immediately pay cash to
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the seller. - ✔✔a.they are usually less expensive than bank credit cards.
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The interest on a note refers to - ✔✔the compensation paid to the lender for giving up the
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use of the resources for the period.
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A 10%, $5,000 note is dated July 1. The principal and interest are due at the end of six
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months. How much interest will be paid on the due date? - ✔✔$250 ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\|| ||//\\||
The principal of a note receivable refers to the amount - ✔✔of money that was loaned.
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