CHAPTER 8 TEN-MINUTE QUIZ o0 Circle the letter of the best response. 1. Which of
ID: 2567302 • Letter: C
Question
CHAPTER 8 TEN-MINUTE QUIZ o0 Circle the letter of the best response. 1. Which of the following is an example of a good internal control for the credit department? A. Employees who grant credit to customers should not also evaluate customer financial position. Employees who handle cash receipts should not also grant credit to customers. C. Only employees who are responsible for biling customers should also grant credit to customers. D. All of these are good internal controls for the credit department. 2. What is the term that describes an entity that purchases the accounts receivables of a seller/? Honorer B. Buyer C. Pledger Factor The person who signs a note receivable and promises to pay the principal and interest is called the payce. B. principal © maker. D. signer C. 4. What is the amount of interest accrued on $3,600 at 7% for 60 days (rounded to nearest dollar)? $41 $60 C. $252 D. $600 Heather's Hair Products estimates that $534 of its $28,720 Accounts Receivable are uncollectible. What is the net realizable value of Accounts Receivable? A $534 $28,186 & $28,720 5. -53 534 D. $29,274 The direct write-off method of accounting for uncollectible receivables is A. an example of the balance sheet approach. 6. an example of the income statement approach. not in conformity with GAAP in conformity with the matching principle.Explanation / Answer
1 Employees who handle cash receipt should not be granting credit. This is a good internal control. If both functions are given to a single person, then the risk of loss increases.
2 Factor is the term that describes an entity which purchase account receivable of a seller.