Question 1

The days' sales uncollected ratio:

Accepted Answer

The days' sales uncollected ratio is used to evaluate the liquidity of receivables. It measures the number of days it takes a company to collect its accounts receivable.

Question 2

Mattel had net sales of $4,235 million and accounts receivable of $775 million.To one decimal,Mattel's days' sales uncollected was:

Accepted Answer

Days' sales uncollected is calculated as (Accounts Receivable / Net Sales) * 365. Plugging in Mattel's figures: (775 / 4235) * 365 = 66.8.

Question 3

Pledging receivables:

Accepted Answer

Pledging receivables allows firms to raise cash by using their receivables as collateral, while still retaining ownership of the receivables. This does not transfer the risk of bad debt to the lender, as the firm is still responsible for collecting the receivables. Therefore, option D, which states that pledging receivables allows firms to raise cash and retain ownership of receivables, is the best choice.

Question 4

Failure by the maker of a promissory note to pay the amount due at maturity is known as:

Accepted Answer

When the maker of a promissory note fails to pay the amount due at maturity, it is known as dishonoring the note. This can happen due to various reasons such as insufficient funds, fraud, or refusal to pay.

Question 5

Quality of receivables refers to:

Accepted Answer

The answer of Quality of receivables refers to:
...

Question 6

A contingent liability:

Accepted Answer

A contingent liability is an obligation to make a future payment if an uncertain future event occurs. It is not the same as a long-term liability, which is a known obligation that will be paid over a period longer than one year. Contingent liabilities can arise from a variety of events, such as pending lawsuits or warranties on products sold. Factoring accounts receivable or discounting notes receivable may create other types of liabilities, but not contingent ones.

Question 7

MixRecording Studios purchased $7,800 in electronic components from TechCom.MixRecording Studios signed a 60-day,10% promissory note for $7,800.TechCom's journal entry to record the transaction should be:

Accepted Answer

The answer of MixRecording Studios purchased $7,800 in electronic components...

Question 8

The days' sales uncollected ratio:

Accepted Answer

The days' sales uncollected ratio is used to measure the time it takes to collect receivables, compare with industry standards, and assess performance over different periods.

Question 9

TechCom has net sales of $435,000 and average accounts receivable of $87,000.What is the accounts receivable turnover for the period?

Accepted Answer

The accounts receivable turnover is calculated by dividing net sales by average accounts receivable, which is $435,000 / $87,000 = 5.

Question 10

Dell had net sales of $8,739 million and average accounts receivable of $864 million.Its accounts receivable turnover was:

Accepted Answer

The accounts receivable turnover is calculated by dividing net sales by average accounts receivable. So, $8,739 million / $864 million = 10.1.

Question 11

The days' sales uncollected ratio is calculated by:

Accepted Answer

The days' sales uncollected ratio is a measure of how long it takes for a company to collect payments from its customers. It is calculated by dividing accounts receivable by net sales and multiplying the result by 365. This ratio gives an indication of the effectiveness of a company's credit and collection policies. Option A and C are incorrect as they do not incorporate the time period. Option D is incorrect as it calculates the opposite of what is required. Option E is incorrect as it multiplies two figures together without any division or additional calculation.

Question 12

Describe accounts receivable and how they are recorded into the accounting system.

Accepted Answer

The answer of Describe accounts receivable and how they are...

Question 13

The buyer who pays cash for accounts receivable is called:

Accepted Answer

The buyer who pays cash for accounts receivable is called a factor. Factors purchase accounts receivable from companies at a discount in order to provide the company with immediate cash flow.

Question 14

Rotel purchased merchandise from TechCom on October 17,2014.TechCom accepted Rotel's $4,800,90-day,10% note as payment.TechCom has a December 31^st year end.What entry should TechCom make on January 15,2015 when the note is honoured?

Accepted Answer

The answer of Rotel purchased merchandise from TechCom on October...

Question 15

The days' sales uncollected ratio is used to:

Accepted Answer

The days' sales uncollected ratio is used to estimate how much time is likely to pass before cash receipts from credit sales equal the current amount of accounts receivable. It is calculated by dividing the accounts receivable by the average daily sales. This ratio helps in determining the effectiveness of the credit and collection policies of the company and identifying any potential credit risks.

Question 16

Z-Mart had net sales of $31,500 and accounts receivable of $2,700.To one decimal,Z-Mart's days' sales uncollected was:

Accepted Answer

The answer of Z-Mart had net sales of $31,500 and...

Question 17

Accounts receivable turnover measures:

Accepted Answer

Accounts receivable turnover measures how frequently a company converts its average accounts receivable balance into cash during a period. It is calculated by dividing net credit sales by average accounts receivable. Option A is incorrect as it refers to inventory turnover. Option C is incorrect as it refers to the cash-to-credit sales ratio. Option D is incorrect as it combines options A and B, and Option E is incorrect as it combines options B and C.

Question 18

A note receivable discounted with recourse is:

Accepted Answer

The answer of A note receivable discounted with recourse is:
...

Question 19

Accounts receivable turnover is calculated by:

Accepted Answer

The accounts receivable turnover ratio is calculated by dividing net sales by average accounts receivable, which measures how efficiently a company collects its receivables.

Question 20

Compaq's accounts receivable turnover rate was 5.7 for this year and 5.4 for last year.Dell's turnover rate was 6.8 for this year and 7 for last year.This means that:

Accepted Answer

Dell has higher turnover rates for both years compared to Compaq (6.8 vs 5.7 for this year and 7 vs 5.4 for last year), indicating better performance in collecting receivables. Compaq's turnover rate increased from 5.4 to 5.7, showing improvement.

Quiz 9: Receivables

The days' sales uncollected ratio:

Mattel had net sales of $4,235 million and accounts receivable of $775 million.To one decimal,Mattel's days' sales uncollected was:

Pledging receivables:

Failure by the maker of a promissory note to pay the amount due at maturity is known as:

Quality of receivables refers to:

A contingent liability:

MixRecording Studios purchased $7,800 in electronic components from TechCom.MixRecording Studios signed a 60-day,10% promissory note for $7,800.TechCom's journal entry to record the transaction should be:

The days' sales uncollected ratio:

TechCom has net sales of $435,000 and average accounts receivable of $87,000.What is the accounts receivable turnover for the period?

Dell had net sales of $8,739 million and average accounts receivable of $864 million.Its accounts receivable turnover was:

The days' sales uncollected ratio is calculated by:

Describe accounts receivable and how they are recorded into the accounting system.

The buyer who pays cash for accounts receivable is called:

Rotel purchased merchandise from TechCom on October 17,2014.TechCom accepted Rotel's $4,800,90-day,10% note as payment.TechCom has a December 31st year end.What entry should TechCom make on January 15,2015 when the note is honoured?

The days' sales uncollected ratio is used to:

Z-Mart had net sales of $31,500 and accounts receivable of $2,700.To one decimal,Z-Mart's days' sales uncollected was:

Accounts receivable turnover measures:

A note receivable discounted with recourse is:

Accounts receivable turnover is calculated by:

Compaq's accounts receivable turnover rate was 5.7 for this year and 5.4 for last year.Dell's turnover rate was 6.8 for this year and 7 for last year.This means that:

Rotel purchased merchandise from TechCom on October 17,2014.TechCom accepted Rotel's $4,800,90-day,10% note as payment.TechCom has a December 31^st year end.What entry should TechCom make on January 15,2015 when the note is honoured?