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BSA 12C Intermediate Accounting 1 > Chapter 4: Accounts Receivable > Flashcards

Chapter 4: Accounts Receivable Flashcards

To know the measurement, adjustments, methods and acctg. treatment.

1
Q

T/F

Dishonored Receivables and Overdue Notes are included as part of Notes Receivable in SFP.

A

False

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2
Q

T/F

An entity shall classify an aset as current when the entity expects to realize the asset or intends to sell or consume it in the entiy’s normal operating cycle , or when the entity expects to realize the asset within twelve months after the reporting period.

A

True

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3
Q

T/F

Nontrade receivables are classified as nocurrent assets if collectible beyond one year.

A

True

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4
Q

T/F

Accounts Receivable known as “Cutomer’s accounts”

A

True

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5
Q

T/F

Customer’s credit balances are classified as current Liabilities.

A

True

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6
Q

T/F

The initial amount recognized for accounts receivable shall be reduced by adjustments which in the ordinary course of business reduce the amount recoverable from the customer

A

T

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7
Q

T/F

The gross methid is the common and widely used method because it is simple to apply.

A

T

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8
Q

T/F

Cash flows relating to short-term accounts receivable are discounted.

A

F

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9
Q

T/F

A cash discount is a reduction from an invoice price by reason of prompt payment.

A

T

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10
Q

T/F

Advances to affiliates are Noncurrent Investments.

A

T

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11
Q

T/F

Trade Receivables which are expected to realize in cash within the normal operating cycle or one year, whichever is longer, are classified as current assets.

A

T

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12
Q

T/F

Special deposits on contract bids classified as noncurrent assets

A

T

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13
Q

T/F

Advances to suppliers are noncurrent assets

A

F

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14
Q

T/F

Assets shall becarried at above their recoverable amount

A

T

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15
Q

T/F

If the customer fails to pay within the 10-day discount period, the gross amount of the invoice price must be paid within 30 days from the invoice date.

A

True

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16
Q

T/F

Claims receivable are noncurrent assets.

A

F

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17
Q

T/F

The details of the total trade and other receivables shall be disclosed in the notes to financial statements.

A

True

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18
Q

T/F

Dividend receivable, accrued rent receivable, accrued royalties receivable, and accrued interest receivable are noncurrent assets.

A

F

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19
Q

T/F

Accounts receivable shall be recognized initially at amortized cost.

A

F

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20
Q

T/F

In net method, the accounts receivable are recorded at the cash disount minus the invoice price whether taken or not taken.

A

F

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21
Q

T/F

In the abscence of any contrary statement, doubtful acounts should be classified as administrative expense.

A

T

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22
Q

T/F

The Direct Writeoff methof is not permitted under IFRS.

A

T

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23
Q

T/F

The Direct writeoff approach is often used by small businesses because it is simple to apply.

A

T

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24
Q

Requires recognition of a bad debt loss only when the accounts proved to be worthless.

A

Direct Writeoff Method

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25
Q

The common and widely used method because it is simple to apply.

A

Gross Method

26
Q

Is the amount of cash expected to be collected or the estimated recoverable amount.

A

NRV

27
Q

Those Supported by formal Promises to pay in the form of notes.

A

Notes Receivable

28
Q

Those Supported by formal Promises to pay in the form of notes.

A

Notes Receivable

29
Q

Means that frieght charge on the goods shipped is already paid by the seller.

A

Freight Prepaid

30
Q

The subsequent measurement of accounts receivable.

A

Amortized Cost

31
Q

Trade receivables and nontrade receivables which are currently collectible shall be presented on the face of statement of finacial position as “one line item” called _______________.

A

Trade and other receivables

32
Q

A Cash Discount is known as ____________ on the part of seller and a ________________ on the part of buyer.

A

Sales Discount
Purchase Discount

33
Q

Is a financial asset that represents a contractual right to receive cash or another financial asset.

A

Receivable

34
Q

Means that ownership of the goods purchased is vested in the buyer upon receipt thereof.

A

FOB Destination

35
Q

Is an Unconditional written agreement to pay a certain sum to pay a certain sum of money on a specific or determinable date to order of the payee or the bearer.

A

Negotiable Promissory Note

36
Q

Refers to claims arisign from sale of Merchandise or Services in the onrdinary course of business.

A

Trade Receivables

37
Q

Are open account; Not supported by a promissory notes.

A

Accounts Receivable

38
Q

Requires the recognition of a bad debts loss if the accounts are doubtful of collection.

A

Allowance Method

39
Q

Means that freight charge on the goods shipped is not yet paid.

A

Freight collect

40
Q

The initial measurement of accounts receivable.

A

Fair Value Plus Transaction Costs

41
Q

Means that ownership of the goods purchased is vested in the buyer upon shipment thereof.

A

FOB Shipping Point

42
Q

Are credit balances in accounts receivable resulting from overpayments, returns, and allowances and advance payments from customers.

A

Customers’ credit balances

43
Q

Nontrade receivables which are expected to be realized in cash within one year classified as ___________.

A

Current Assets

44
Q

Known as Customer’s accounts, trade debtors and trade accounts receivable.

A

Accounts Receivable

45
Q

The _________________ account is classified as “other income”.

A

Sales Discount forfeited

46
Q

If the granting of credit and collection of accounts are under the charge of an officer other than sales manager, doubtful aacounts shall be considered as _________?

A

Administrative Expense

47
Q

If the granting of credit and collection of accounts are under the charge of an sales manager, doubtful aacounts shall be considered as _________?

A

Distribution Cost

48
Q

What are the two accounting for bad debts?

A
  1. Allowance Method
  2. Direct Writeoff Method
49
Q

What are 2 Standards found in Receivables?

A

PFRS 15
PFRS 9

50
Q

What are the 4 kinds of treatment when estimating the net realizable value of accounts receivable.

A

Allowance for freight charge
Allowance for sales return
Allowance for sales discount
Allowance for doubtful accounts

51
Q

Methods of recording Credit Sales

A

1.Gross Method
2. Net Method

52
Q

Classification of Receivables

A
  1. As to source
  2. As to SFP
53
Q

The journal entry when collection is made beyond the discount period under Net Method.

A

Cash
Accounts Receivable
Sales Discount Forfeited

54
Q

The journal Entry when collection is made within the discount period under Net Method.

A

Cash
Accounts Receivable

55
Q

The journal entry when “the accounts proved to be worthless”.

A

Bad Debts
Accounts receivable

56
Q

The JE when “The accounts that are previously written off as worthless are recovered or collected”.

A

AR
Bad debts

Cash
AR

57
Q

JE when “The accounts that are previously written off as worthless are unexpectedly recovered or collected”.

A

AR
ABD

Cash
AR

58
Q

The journal entry when collection is made within the discount period under Gross Method.

A

Cash
Sales Discount
Accounts Receivable

59
Q

The journal entry when “the accounts subsequently discovered to be worthless”.

A

Allowance for Bad Debts
Accounts receivable

60
Q

The journal entry when collection is made beyond the discount period under Gross Method.

A

Cash
Accounts Receivable

BSA 12C Intermediate Accounting 1 (32 decks)

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