/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q14E Defining common receivables term... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 8: Q14E (page 469)

Defining common receivables terms

Match the terms with their correct definition.

Terms Definitions

1. Accounts receivable

a. The party to a credit transaction who takes on an obligation/payable.

2. Other receivables

b. The party who receives a receivable and will collect cash in the future.

3. Debtor

c. A written promise to pay a specified amount of money at a particular future date.

4. Notes receivable

d. The date when the note receivable is due.

5. Maturity date

e. A miscellaneous category that includes any other type of receivable where there is a right to receive cash in the future

6. Creditor

f. The right to receive cash in the future from customers for goods sold or for services performed.

Short Answer

Expert verified

1-f

2-e

3-b

4-c

5-d

6-a

Step by step solution

01

Definition of accounts receivable

The accounts receivable means the amount that the company is receiving. This amount is received from the debtors of the company.

02

Matching the correct definition

  1. Accounts receivable: Option f is correct as this indeed provides the right to the firm to obtain cash from the service taker against the services given in the past.
  2. Other receivables: option e is correct as it includes various amounts to be received where the company has the right.
  3. Debtor: Option b is correct as this explains the individual that gets the money and needs to pay it back in the future.
  4. Notes receivable: Option c is related as it generates an agreement to provide a particular amount on a future date.
  5. Maturity date: Option d. is correct as this specified the maturity date.
  6. Creditor: Option a is correct as this is the individual who provides the fund and is responsible.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Accounting for uncollectible accounts using the allowance (percent of-sales) and direct write-off methods and reporting receivables on thebalance sheet

On August 31, 2018, Forget-Me-Not Floral Supply had a \(140,000 debit balance inAccounts Receivable and a \)5,600 credit balance in Allowance for Bad Debts. DuringSeptember, Forget-Me-Not made the following transactions:

鈥� Sales on account, \(530,000. Ignore Cost of Goods Sold.

鈥� Collections on account, \)573,000.

鈥� Write-offs of uncollectible receivables, $6,000.

Requirements

1. Journalize all September entries using the allowance method. Bad debts expense wasestimated at 2% of credit sales. Show all September activity in Accounts Receivable,Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts).

2. Using the same facts, assume that Forget-Me-Not used the direct write-off methodto account for uncollectible receivables. Journalize all September entries using thedirect write-off method. Post to Accounts Receivable and Bad Debts Expense, andshow their balances at September 30, 2018.

3. What amount of Bad Debts Expense would Forget-Me-Not report on its Septemberincome statement under each of the two methods? Which amount better

matches expense with revenue? Give your reason.

4. What amount of net accounts receivable would Forget-Me-Not report on its September

30, 2018, balance sheet under each of the two methods? Which amount ismore realistic? Give your reason

On June 1, 2018, Best Performance Cell Phones sold \(21,000 of merchandise to Anthony Trucking Company on account. Anthony fell on hard times and on July 15 paid only \)5,000 of the account receivable. After repeated attempts to collect, Best Performance finally wrote off its accounts receivable from Anthony on September 5. Six months later, on March 5, 2019, Best Performance received Anthony鈥檚 check for $16,000 with a note apologizing for the late payment.

Requirements

1. Journalize the transactions for Best Performance Cell Phones using the direct write-off method. Ignore Cost of Goods Sold.

2. What are some limitations that Best Performance will encounter when using the direct write-off method?

Williams Company uses the direct write-off method to account for uncollectible receivables. On July 18, Williams wrote off a

$6,800 account receivable from customer W. Jennings. On August 24, Williams unexpectedly received full payment from Jennings

on the previously written off account.

7. Journalize Williams鈥檚 write-off on the uncollectible receivable.

8. Journalize Williams鈥檚 collection of the previously written off receivable

Lovett Company reported the following selected items at March 31, 2018 (last year鈥檚鈥�2017鈥攁mounts also given as needed):

Accounts Payable \( 128,000 Accounts Receivable, net:

Cash 104,000 March 31, 2018 \) 108,000

Merchandise Inventory: March 31, 2017 68,000

March 31, 2018 116,000 Cost of Goods Sold 460,000

March 31, 2017 80,000 Short-term Investments 56,000

Net Credit Sales Revenue 1,168,000 Other Current Assets 48,000

Long-term Assets 168,000 Other Current Liabilities 72,000

Long-term Liabilities 52,000

14. Compute Lovett鈥檚 (a) acid-test ratio, (b) accounts receivable turnover ratio, and (c) days鈥� sales in receivables as of

March 31, 2018.

Weddings on Demand sells on account and manages its own receivables. My average

experience for the past three years has been as follows:

Sales \( 350,000

Cost of Goods Sold 210,000

Bad Debts Expense 4,000

Other Expenses 61,000

Unhappy with the amount of bad debts expense she has been experiencing, Aledia

Sanchez, controller, is considering a major change in the business. Her plan would be

to stop selling on account altogether but accept either cash, credit cards, or debit cards

from her customers. Her market research indicates that if she does so, her sales will

increase by 10% (i.e., from \)350,000 to \(385,000), of which \)200,000 will be credit

or debit card sales and the rest will be cash sales. With a 10% increase in sales, there

will also be a 10% increase in Cost of Goods Sold. If she adopts this plan, she will

no longer have bad debts expense, but she will have to pay a fee on debit/credit card

transactions of 2% of applicable sales. She also believes this plan will allow her to save

$5,000 per year in other operating expenses.

Should Sanchez start accepting credit cards and debit cards? Show the

computations of net income under her present arrangement and under the plan.
See all solutions

Recommended explanations on Business Studies Textbooks

Influences On Business

Read Explanation

Family Business

Read Explanation

Financial Performance

Read Explanation

Strategic Direction

Read Explanation

Strategy

Read Explanation

Managerial Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.