Indicate whether the sentence or statement is true or false.
____ 5. The "list" sales price less any trade discount is the amount at which the receivable and the corresponding revenue should be recorded.
____ 6. When factoring accounts receivable without recourse, the buyer (factor) normally assumes the burden of billing and collecting accounts.
____ 7. Transferring receivables without recourse means that the bank or finance company advances cash in return for accounts receivable, but it retains the right to collect from the transferor if debtors fail to make payments when due.
____ 8. The transfer of accounts receivable with recourse should never be accounted for as a sale.
____ 9. Notes arising from loans to customers, officers, employees, and affiliated companies should be reported with the other regular trade notes receivable.
____ 10. An interest-bearing note is written as a promise to pay a face amount plus interest at a specified rate.
Indicate whether the sentence or statement is true or false.
____ 5. The "list" sales price less any trade discount is the amount at which the receivable and the corresponding revenue should be recorded.
____ 6. When factoring accounts receivable without recourse, the buyer (factor) normally assumes the burden of billing and collecting accounts.
____ 7. Transferring receivables without recourse means that the bank or finance company advances cash in return for accounts receivable, but it retains the right to collect from the transferor if debtors fail to make payments when due.
____ 8. The transfer of accounts receivable with recourse should never be accounted for as a sale.
____ 9. Notes arising from loans to customers, officers, employees, and affiliated companies should be reported with the other regular trade notes receivable.
____ 10. An interest-bearing note is written as a promise to pay a face amount plus interest at a specified rate.
Related questions
Select the term that best fits each of the following definitions and descriptions.
| a. | Notes receivable |
| b. | Nontrade receivables |
| c. | Net realizable value |
| d. | Direct write-off method |
| e. | Interest-bearing note |
| f. | Maturity date |
| g. | Promissory note |
| h. | Factoring receivables |
| i. | Trade discount |
| j. | Present value |
| k. | Allowance method |
| l. | Sales discount |
| m. | Negotiable note |
| n. | Non-interest-bearing note |
| o. | Assignment of receivables |
| p. | Valuation date |
____ 21. Receivables that are evidenced by a formal written promise to pay a certain sum of money at a specified date.
____ 22. The date the principal amount of a note is due to be paid.
____ 23. The sum of future receipts or payments discounted to the present date at an appropriate rate of interest.
____ 24. A method of recognizing the estimated losses from uncollectible accounts as expenses during the period in which the sales occur.
____ 25. A note that is legally transferable by endorsement and delivery.
____ 26. Any receivable arising from transactions that are not directly associated with the normal operating activities of a business.
____ 27. A note written in the form where the face amount includes the interest charges.
____ 28. The borrowing of money with receivables pledged as security on the loan.
____ 29. A note written in the form where the maker promises to pay the face amount plus interest at a specified rate.
____ 30. An unconditional written promise to pay a certain sum of money at a specified time.
