Which one of the following is not a method used by companies to accelerate cash receipts?

Subject: Business / Accounting
When is a receivable recorded by a service organization?

a. When service is provided on account

b. When the related expenses are incurred

c. When the bill is sent to the customer

d. When the customer pays

At what value are accounts receivable reported on the balance sheet?

a. Cash (net) realizable value

b. Maturity value

c. Fair market value

d. Present value

Short-term notes receivable are reported at their cash (net) realizable value.

a. True

b. False

Which one of these statements about promissory notes is incorrect?

a. A promissory note is not a negotiable instrument.

b. The party making the promise to pay is called the maker.

c. The party to whom payment is to be made is called the payee.

d. A promissory note is more liquid than an account receivable.

Which of the following should be classified as an “other” receivable?

a. Notes receivable

b. Accounts receivable

c. Trade receivables

d. Interest receivable

What type of receivables result from sales transactions?

a. Trade receivables

b. Non-trade receivables

c. Long-term receivables

d. Other receivables

Which one of the following is not a method used by companies to accelerate cash receipts?

a. Accepting national credit cards for customer purchases

b. Writing off receivables

c. Offering discounts for early payment

d. Selling receivables to a factor

Which of the following accounts is debited when a company factors its accounts receivable?

a. Service Charge Expense

b. Interest Expense

c. Loss on Sale of Accounts Receivable

d. Accounts Receivable

Which of the following is the value at which loans and receivables should be reported under IFRS?

a. Maturity value

b. Net of bad debt expense

c. Amortized cost

d. Cash realizable value


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