This document contains an assignment on receivables for an intermediate accounting class. It includes multiple choice and fill-in-the-blank questions about receivables, notes receivable, allowance for doubtful accounts, and foreign currency translation. It also contains a sample promissory note to be used in answering questions about the maker, payee, due date, interest rate, and maturity value.
This document contains an assignment on receivables for an intermediate accounting class. It includes multiple choice and fill-in-the-blank questions about receivables, notes receivable, allowance for doubtful accounts, and foreign currency translation. It also contains a sample promissory note to be used in answering questions about the maker, payee, due date, interest rate, and maturity value.
This document contains an assignment on receivables for an intermediate accounting class. It includes multiple choice and fill-in-the-blank questions about receivables, notes receivable, allowance for doubtful accounts, and foreign currency translation. It also contains a sample promissory note to be used in answering questions about the maker, payee, due date, interest rate, and maturity value.
This document contains an assignment on receivables for an intermediate accounting class. It includes multiple choice and fill-in-the-blank questions about receivables, notes receivable, allowance for doubtful accounts, and foreign currency translation. It also contains a sample promissory note to be used in answering questions about the maker, payee, due date, interest rate, and maturity value.
Name _______________________________________ Section _____________ Date ____________________
FAMILY NAME FIRST NAME M.I.
I. Write the CAPITAL LETTER of the term corresponding to the description below. A. Maker E. Maturity Date H. Maturity Value B. Creditor F. Interest Income I. Liability C. Payee G. Interest Expense J. Assets D. Promissory Note _____ 1. This is a written promise to pay a specified sum of money on demand or at a definite time. _____ 2. This is the interest to be recognized by the payee. _____ 3. This is the party who promises to pay the note. _____ 4. This is another way of calling the party in no.3. _____ 5. The principal amount mentioned on the note. _____ 6. This is the total amount to be paid on the due date of the note. _____ 7. This is the date the note becomes due. _____ 8. The note when recorded by the creditor increases this accounting value. II. Determine the missing items in each of the following: Write your answer inside the box.
A B C D Face value of note P 8,000 P 50,000 P 10,000 P 15,000
Date of the note May 17 April 24 July 14 Dec 15
Interest rate 15% 12% 18% (10)
Term of note 60 Days (4) (7) (11)
Maturity Date (1) June 8 (8) Feb. 13
Interest on Note (2) (5) P 375 (12)
Maturity Value (3) (6) (9) P 15,150
III. Write the CAPITAL LETTER of the best answer for each of the following items.
____ 1 . Receivable balances should be valued at
A. Face amount. B. Face amount minus allowance for doubtful accounts. C. Face amount minus allowance for doubtful accounts and for any anticipated adjustments which in the normal course of events will reduce the amount receivable to estimated realizable value. D. None of the above. ____ 2. The allowance for doubtful receivables should be deducted from the related asset, the asset being shown on the balance sheet at Gross, less the allowance Net, the allowance shown parenthetically A. Yes No B. No Yes C. No No D. Yes Yes ____ 3. Receivables denominated in a foreign currency should be A. Shown at face value of the foreign currency. B. Translated to local currency using the exchange rate at the time the receivables arise. C. Translated to local currency using the exchange rate at balance sheet date. D. Translated to local currency using the exchange rate when the balance sheet is issued. ____ 4. Nontrade receivables are classified as current assets only if they are reasonably expected to be realized in cash A. within one year. B. within the normal operating cycle. C. within one year or within the normal operating cycle whichever is longer. D. within one year, the length of the operating cycle notwithstanding. ____ 5. On a balance sheet, what is the preferable presentation of notes or accounts receivable from officers employees, or affiliated companies? A. as trade notes and accounts receivable if they otherwise qualify as current assets. B. as assets but separately from other receivables. C. as offsets to capital. D. by means of notes or footnotes. ____ 6. A company is in its first year of operations and has never written off any accounts receivable as uncollectible. When the allowance method of recognizing bad debts expense is used, the entry to recognize the expense A. increases net income. C. has no effect on current assets. B. decreases current assets. D. has no effect on net income.
____ 7. When the allowance method is used, what is the effect of the entries to record the collection of accounts previously written off on the following: Allowance for doubtful accounts Doubtful accounts Net income A. Increase Decrease No effect B. No effect Increase Decrease C. Increase No effect No effect D. Decrease No effect No effect ____ 8. A method of estimating bad debts that focuses on the income statement rather than the balance sheet is the allowance method based on A. Direct write off. B. Aging the trade receivable accounts. C. Credit sales. D. The balance in the trade receivable accounts. ____ 9. When a specific customer’s accounts receivable is written-off as uncollectible, what will be the effect on net income Allowance Direct write-off A. None Decrease B. Decrease None C. Decrease Decrease D. None None
____ 10. Which of the following methods of determining bad debts expense does not match expense and revenue? A. charging bad debts with a percentage of sales. B. charging bad debts with a percentage of accounts receivable. C. charging bad debts with an amount derived from aging the accounts receivable under the allowance method. D. charging bad debts as accounts are written off as uncollectible.
IV. The following is a promissory note drawn by the proprietor of Good Service for a loan received from the bank.
Manila, Philippines May 1, 2019
FOR VALUE RECEIVED, I promise to pay SOUTH EAST ASIA BANK the sum of Three Hundred Thousand pesos (P 300,000) six months from date with interest at 18% per annum.
Signed Jackqui Mendrez
Fill in the blanks using the details from the promissory note:
5. Maturity Value - ___________________________________
V. Write the CAPITAL LETTER of the best answer for each of the following items. See your Valix textbook for the question. Write your solution on a separate worksheet.
1. ________ Problem 5-10 Gruesome Company ( Valix 2019 p.137, Valix 2020 p.152)
2. ________ Problem 5-13 Namesake Company ( Valix 2019 p.139, Valix 2020 p.154)
3. ________ Problem 5-14 Bestial Company ( Valix 2019 p.139, Valix 2020 p.154)
4. ________ Problem 5-15 Castaway Company ( Valix 2019 p.140, Valix 2020 p.155)
5. ________ Problem 5-16 Fateful Company ( Valix 2019 p.140, Valix 2020 p.155)
