CHAPTER 8 TEN-MINUTE QUIZ Circle the letter of the best response. 1. Which of th

Question

CHAPTER 8 TEN-MINUTE QUIZ 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. ld not also grant credit to customers. Employees who handle cash receipts shou C. Only employces who are responsible for billing customers should also grant credit to customers. D. All of these are good internal controls for the credit department. X2. What is the torm that describes an entity that purchases the accounts receivables of a seller? B. Honorer B. Buyer C. Pledger Factor The person who signs a note receivable and promises to pay the principal and interest is called the payee. B. principal. © maker D. signer C. 4 fwhat is the amount ofinterest accred on S3,000 at 7% for 60 days (rounded to nearest dollar)? $41 $60 C. $252 D. $600 5. Heather's Hair Products estimates that $534 of its $28,720 Accounts Receivable are uncollectible. What is the net realizable value of Accounts Receivable? 4 $534 $28,186 534 &. $28,720 D. $29,274 534 293 6. The direct write-off method of accounting for uncollectible receivables is A. an example of the balance sheet approach. B, an example of the income statement approach. not in conformity with GAAP in conformity with the matching principle

Explanation / Answer

Question 1- Option B is correct

Employees who handle cash receipt should not also grant credit to customer as it will work as an internal check over the work of each other. Employees who handle cash receipt will keep a check on credit granted and vice-a-versa.

Question-2 Option D is correct

Honourer is a person who pay dues.

Buyer is a person who buys goods

Pledger: Pledge accounts receivables as collateral for Selling account receivable

Factor: Entity that purchases account receivables of a seller

Question 4: Option A is correct

Interest Accrued: 3600*7/100*60/365=41.42

Interest Accrued (Rounded Off) = 41

Question 5-Option B is correct

Net Realizable value of Account Receivable=28720-534=28,186

As per chegg policy, as an expert we are allowed to answer only 4 questions at a time.

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