Question

1. When journalizing for the estimated sales returns, there would be a debit to:

A) Sales Refunds Payable.

B) Cost of Goods Sold.

C) Sales Returns and Allowances.

D) Accounts Receivable.

2. When journalizing for an actual sales return, there would be a debit to:

A) Sales Refunds Payable.

B) Cost of Goods Sold.

C) Sales Returns and Allowances.

D) Accounts Receivable.

3. What amount does a company expect to collect from Accounts Receivable?

A) gross amount of Accounts Receivable

B) net realizable value of Accounts Receivable

C) gross amount of Accounts Receivable minus Allowance for Uncollectible Accounts

D) B and C

4. The income statement approach to estimating uncollectible accounts is called the ________ method. The balance sheet approach to estimating uncollectible accounts is called the ________ method.

A) direct write-off; allowance

B) allowance; direct write-off

C) percent-of-sales; aging-of-receivables

D) aging-of-receivables; percent-of-sales

Emma Jones Company has the following information available:

Account	12/31/2019	12/31/2018
Accounts Payable	$76,500	$80,000
Accounts Receivable, net	42,300	49,000
Cash and Cash Equivalents	43,700	70,000
Inventories	100,000	99,000
Long-Term Investments	20,000	100,000
Short-Term Investments	27,000	44,000
Income Taxes Payable	2,000	5,000
Long-Term Notes Payable	20,000	30,000

Did the quick ratio improve from 2018 to 2019?

A) No.

B) Yes.

C) It stayed the same.

D) There is not enough information.

Rockford Moving Company has calculated the following ratios:

Ratio	12/31/2019	12/31/2018
Current Ratio	1.25	2.00
Quick Ratio	1.10	1.50
Collection Period	30 days	60 days

Did the company's liquidity improve in 2019?

A) No.

B) Yes.

C) There is conflicting information. One ratio improved and two ratios did not improve.

D) There is not enough information to assess.

33) Days' sales in receivables is also called:

A) days' sales outstanding

B) collection period

C) accounts receivable turnover

D) A and B

34) Accounts receivable turnover equals:

A) days' sales in receivables.

B) average collection period.

C) average net accounts receivable.

D) net credit sales divided by average net accounts receivable.

Answer 1

1. Option C Sales returns and allowances
2. Option B Cost of Goods Sold
3. Option D B&C
4. Option C Percentage of sales, aging of receivables