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Adv. Accounting - Ch. 10 Review
Test Description: Accounts Receivable, Unearned Revenue & Accrued Revenue
Instructions: Answer all questions to get your test result.
1) If a customer signs a note allowing 90 days for payment and pays no cash up front, the transaction is recorded in the cash receipts journal.
A
True
B
False
2) Adequate Disclosure is being applied when businesses report accurate & up-to-date info about notes receivable & accrued revenue on their financial statements at the end of a period
A
True
B
False
3) A business sends a billing statement to all customers with notes receivable outstanding for the amount of interest income due on Dec. 31.
A
True
B
False
4) Additional interest is charged on a dishonored note receivable from the maturity date of the note to the date payment is received.
A
True
B
False
5) Most companies use a 365 day year to calculate interest on notes receivable, even in a leap year.
A
False
B
True
6) Historical Cost is being applied when a company includes in its Notes Receivable balance in the financial statements only the amount of notes receivable they expect to collect.
A
False
B
True
7) Matching Expenses with Revenue is applied when special accounting procedures are implemented so the correct amt. of revenue earned in the period is recognized in the financials.
A
True
B
False
8) The reversing entry for unearned revenue initially recorded as a revenue is a debit to the liability account and a credit to the revenue account.
A
True
B
False
9) The reversing entry recorded on Jan. 1 of the next year is the exact opposite of the adjusting entry recorded on Dec. 31 of the current year.
A
False
B
True
10) After closing entries have been posted, the balance in Interest Receivable will be zero.
A
True
B
False
*select an answer for all questions
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