ACC* - Accounting ACC* M115 Lecture Notes - Lecture 29: Product Return, Accounts Receivable, Financial Statement

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redminnow421

5 Oct 2020

School

CCC

Department

ACC* - Accounting

Course

ACC* - Accounting ACC* M115

Professor

Murphy

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Document Summary

Types of receivables: receivables refers to amounts due from individuals and other companies. Accounts receivable (a/r) amounts owed by customers on account. (due in 30-60 days) Notes receivable claims for which formal instrument of credit issued. Trade receivable notes and accounts receivable from sales transactions. Interest receivable, loans to company officers, advances to employees, tax refunds: recognizing accounts receivable. Cash discounts occur when manufacturer sells to wholesaler or wholesaler sells to retailer, not when retailer sells to customer. In fact when you use a retailer"s credit card you pay an interest charge if you don"t pay balance within specified period. If use macy"s credit card, macy"s will make this entry at date of sale: If you don"t pay within certain time, will charge interest. When interest charges are added retailer recognizes interest revenue. Entry: accounts receivable 4. 50: valuing accounts receivable: although customers go through credit requirements inevitably some accounts receivable become uncollectible.

Related Questions

Calculate cost of goods available for sale and cost of goodssold for the month.

5. Principles of an efficient and effectiveaccounting information system include all of the followingexcept

a. cost effectiveness.

b. flexibility.

c. useful output.

d. All of these options are principles.

6. Which of the following statements isincorrect?

a. A major consideration in developing an accountingsystem is cost effectiveness.

b. When an accounting system is designed, noconsideration needs to be given to the needs and knowledge of thevarious users.

c. The accounting system should be able toaccommodate a variety of users and changing information needs.

d. To be useful, information must be understandable,relevant, reliable, timely, and accurate.

7. All of the following are advantages ofusing subsidiary ledgers except they

a. eliminate errors in individual accounts.

b. free the general ledger of excessive details.

c. show, in a single account, transactions affectingone customer or one creditor.

d. make possible a division of labor.

8. Which of the following is notan advantage of a subsidiary ledger?

a. Shows transactions affecting one customer or onecreditor in a single account.

b. Helps locate errors in individual accounts.

c. Puts greater detail in the general ledger.

d. Makes possible a division of labor.

9. Credit sales of assets other thanmerchandise are recorded in the

a. cash payments journal.

b. cash receipts journal.

c. general journal.

d. sales journal.

10. When the totals of the sales journal are posted at the end of themonth, there will be credits to

a. Sales and Merchandise Inventory and debits toAccounts Receivable and Cost of Goods Sold.

b. Accounts Receivable and Cost of Goods Sold anddebits to Sales and Merchandise Inventory.

c. Sales and debits to each individual customeraccount.

d. the Sales account only, and no debits.

11. TheOther Accounts column of a multi-column journal is often referredto as the

a. Sundry Accounts column.

b. Controlling Account column.

c. Credit Account column.

d. Debit Account column.

12. Companies record credit purchases of equipment or supplies inthe

a. cash payments journal.

b. cash receipts journal.

c. general journal.

d. one-column purchases journal.

13. Inthe expanded purchases journal, debits are made in whichcolumns?

a. Accounts Payable, Merchandise Inventory, andOffice Supplies

b. Merchandise Inventory, Office Supplies, and StoreSupplies

c. Cash, Office Supplies, and Store Supplies

d. Accounts Payable, Cash, and MerchandiseInventory

14. Ifa customer takes a sales discount, an entry is made in the

a. cash receipts journal.

b. sales journal.

c. cash payments journal.

d. general journal.

15. Claimsfor which formal instruments of credit are issued as proof of thedebt are

a. accounts receivable.

b. interest receivable.

c. notes receivable.

d. other receivables.

16. Interestis usually associated with

a. accounts receivable.

b. notes receivable.

c. doubtful accounts.

d. bad debts.

17. Thereceivable that is usually evidenced by a formal instrument ofcredit is a(n)

a. trade receivable.

b. note receivable.

c. accounts receivable.

d. income tax receivable.

18. Which ofthe following receivables would not be classified as an"other receivable"?

a. Advance to an employee

b. Refundable income tax

c. Notes receivable

d. Interest receivable

19. Notes oraccounts receivables that result from sales transactions are oftencalled

a. sales receivables.

b. non-trade receivables.

c. trade receivables.

d. merchandise receivables.

20. LarsonCompany on July 15 sells merchandise on account to Stuart Co. for$1,000, terms 2/10, n/30. On July 20 Stuart Co. returns merchandiseworth $400 to Larson Company. On July 24 payment is received fromStuart Co. for the balance due. What is the amount of cashreceived?

a. $600

b. $588

c. $580

d. $1,000

champagnecattle375

Use the following information forquestions 1â3.

At May 1, 2008, Treeline Company had beginning inventoryconsisting of 200 units with a unit cost of $7. During May, thecompany purchased inventory as follows:

200 units at $7

300 units at $8

The company sold 500 units during the month for $12 per unit.Treeline uses the average cost method.

1. The average cost per unit for May is

2. The value ofTreelineâs inventory at May 31, 2008 is

3. Treelineâs gross profit for the month ofMay is

Pembrook Company had beginning inventory on May 1 of $12,000.During the month, the company made purchases of $30,000 butreturned $2,000 of goods because they were defective. At the end ofthe month, the inventory on hand was valued at $9,500.

Calculate cost of goods available for sale and cost of goodssold for the month.

5. Principles of an efficient and effectiveaccounting information system include all of the followingexcept

a. cost effectiveness.

b. flexibility.

c. useful output.

d. All of these options are principles.

6. Which of the following statements isincorrect?

a. A major consideration in developing an accountingsystem is cost effectiveness.

b. When an accounting system is designed, noconsideration needs to be given to the needs and knowledge of thevarious users.

c. The accounting system should be able toaccommodate a variety of users and changing information needs.

d. To be useful, information must be understandable,relevant, reliable, timely, and accurate.

7. All of the following are advantages ofusing subsidiary ledgers except they

a. eliminate errors in individual accounts.

b. free the general ledger of excessive details.

c. show, in a single account, transactions affectingone customer or one creditor.

d. make possible a division of labor.

8. Which of the following is notan advantage of a subsidiary ledger?

a. Shows transactions affecting one customer or onecreditor in a single account.

b. Helps locate errors in individual accounts.

c. Puts greater detail in the general ledger.

d. Makes possible a division of labor.

9. Credit sales of assets other thanmerchandise are recorded in the

a. cash payments journal.

b. cash receipts journal.

c. general journal.

d. sales journal.

10. When the totals of the sales journal are posted at the end of themonth, there will be credits to

a. Sales and Merchandise Inventory and debits toAccounts Receivable and Cost of Goods Sold.

b. Accounts Receivable and Cost of Goods Sold anddebits to Sales and Merchandise Inventory.

c. Sales and debits to each individual customeraccount.

d. the Sales account only, and no debits.

11. TheOther Accounts column of a multi-column journal is often referredto as the

a. Sundry Accounts column.

b. Controlling Account column.

c. Credit Account column.

d. Debit Account column.

12. Companies record credit purchases of equipment or supplies inthe

a. cash payments journal.

b. cash receipts journal.

c. general journal.

d. one-column purchases journal.

13. Inthe expanded purchases journal, debits are made in whichcolumns?

a. Accounts Payable, Merchandise Inventory, andOffice Supplies

b. Merchandise Inventory, Office Supplies, and StoreSupplies

c. Cash, Office Supplies, and Store Supplies

d. Accounts Payable, Cash, and MerchandiseInventory

14. Ifa customer takes a sales discount, an entry is made in the

a. cash receipts journal.

b. sales journal.

c. cash payments journal.

d. general journal.

15. Claimsfor which formal instruments of credit are issued as proof of thedebt are

a. accounts receivable.

b. interest receivable.

c. notes receivable.

d. other receivables.

16. Interestis usually associated with

a. accounts receivable.

b. notes receivable.

c. doubtful accounts.

d. bad debts.

17. Thereceivable that is usually evidenced by a formal instrument ofcredit is a(n)

a. trade receivable.

b. note receivable.

c. accounts receivable.

d. income tax receivable.

18. Which ofthe following receivables would not be classified as an"other receivable"?

a. Advance to an employee

b. Refundable income tax

c. Notes receivable

d. Interest receivable

19. Notes oraccounts receivables that result from sales transactions are oftencalled

a. sales receivables.

b. non-trade receivables.

c. trade receivables.

d. merchandise receivables.

a. $600

b. $588

c. $580

d. $1,000

pinkbat881

Flush Mate Co. wholesales bathroom fixtures. During the current fiscal year, Flush Mate Co. received the following notes:

	Date	Face Amount	Interest Rate	Term
1.	Mar. 6	$84,500	6%	45 days
2.	Apr. 23	21,700	9%	60 days
3.	July 20	43,900	5%	120 days
4.	Sept. 6	51,500	6%	90 days
5.	Nov. 29	30,600	5%	60 days
6.	Dec. 30	71,300	6%	30 days

	Required:
1.	Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Assume a 360-day year when calculating interest.(Note: Round each interest computation to the whole dollar.)
2.	Journalize the entry to record the dishonor A note receivable is dishonored when the maker of the note fails to pay the note on the due date. of Note (3) on its due date. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.
3.	Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.
4.	Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.

Chart of Accounts

CHART OF ACCOUNTS

Flush Mate Co.

General Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

none

Starting Question

Shaded cells have feedback.

1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Assume a 360-day year when calculating interest. (Note: Round each interest computation to the whole dollar.)

Note	Due Date	Interest Due at Maturity
1.	selector 1Apr. 20 June 22 Apr. 21 Apr. 20 June 9 Apr. 30
2.	selector 2June 22 July 22 June 23 June 22 July 25 June 30
3.	selector 3Nov. 17 Dec. 5 Nov. 20 July 1 Nov. 17 July 31
4.	selector 4Dec. 5 Dec. 4 Dec. 5 Oct. 31 Dec. 6 Dec. 1
5.	selector 5Jan. 28 Sep. 29 Jan. 29 Jan. 28 Nov. 28 Nov. 17
6.	selector 6Jan. 29 Nov. 28 Jan. 30 Jan. 29 Nov. 17 Jan. 28

Points:

12 / 12

Feedback

Check My Work

Count the number of days in each month until the total number of days is reached for the term of the note and this will be the due date. Interest is not charged on the first day of the note.

Explanation

none

Journal

Shaded cells have feedback.

2. Journalize the entry to record the dishonor

A note receivable is dishonored when the maker of the note fails to pay the note on the due date.

of Note (3) on its due date. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.How does grading work?

The grader is designed to give you the best score possible, even when you skip lines or enter them out of order. It does this by taking every line you have entered and comparing it to every line in the answer. When it finds the line that gives you the best score, it considers that a match.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

Score: 37/37

	DATE	DESCRIPTION	DEBIT	CREDIT	ASSETS	EQUITY
1	â	â	â		â
2		â		â	â
3		â		â		â

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3

Points:

7 / 7

3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.

How does grading work?

PAGE 1

JOURNAL

ACCOUNTING EQUATION

Score: 21/25

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1	â	â				â
2		â						â

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

Points:

4.2 / 5

4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.

All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

Score: 2/99

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8

Points:

0.36 / 18

Feedback

Check My Work

Typically, the maker of a dishonored note fails to pay the note on the due date. A company that holds a dishonored note transfers the face amount of the note plus any interest due back to an accounts receivable account. Interest revenue is not dependent on receiving the interest at this point.

(Note 5) Calculate the number of days of interest that accrues between November 29 and December 31. Remember interest is not charged on the first day of the note. Use this to calculate:

(a) Interest rate x face amount = annual interest.

(b) Annual interest x (number of days to end of year Ã· 360 days) = interest on note to the end of the year

Two accounts related to interest are used for the transaction.

(Note 6) Calculate the number of days of interest that accrues between December 30 and December 31. Remember interest is not charged on the first day of the note. Use this to calculate:

(a) Interest rate x face amount = annual interest.

(b) Annual interest x (number of days to end of year Ã· 360 days) = interest on note to the end of the year

Two accounts related to interest are used for the transaction.

Cash received will include the maturity value of the note.

Explanation

Need help with part 3 and 4 please.

scarletgoldfish67

ACC* - Accounting ACC* M115 Lecture Notes - Lecture 29: Product Return, Accounts Receivable, Financial Statement

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