Cash And Receivables

Question 1

True or false

Savings Account are usually classified as cash on the statement of financial position

Answer 1

True

Question 2

True or false

Certificates of deposit are usually classified as cash in the statement of financial position

Answer 2

False

Question 3

True or false

Companies include postdated checks and petty cash fund as cash

Answer 3

False

Question 4

True or false

Cash equivalents are investments with original maturities of six months or less

Answer 4

False

Question 5

True or false

Bank overdrafts are always included as part of cash in the statement of financial position

Answer 5

False

Question 6

True or false

Short term, highly liquid investment may be included with cash in the statement of financial position

Answer 6

True

Question 7

True or false

Receivables are classified in the statement of financial position as either trade or non-trade receivables

Answer 7

False

Question 8

True or false

Trade receivables includes notes receivable and advances to officers and employees

Answer 8

False

Question 9

True or false

Trade discounts are used to avoid frequent changes in catalogs and to alter prices for different quantities purchased

Answer 9

True

Question 10

True or false

In the gross method, sales discounts are reported as a deduction from sales

Answer 10

True

Question 11

True or false

Ideally, a company should measure receivables in terms of their present value, that is, the discounted value of the cash to be received in the future

Answer 11

True

Question 12

True or false

Thé international accounting standard board requires that companies assess their receivables for impairment each reporting period and begin the impairment assessment by considering whether objective evidence indicates that one or more loss events have occurred

Answer 12

True

Question 13

True or False

The international accounting standard board requires that when performing an impairment assessment all receivables that are individually significant should be considered for impairment separately

Answer 13

True

Question 14

True or false

The percentage-of-receivables approach of estimating uncollectible accounts emphasizes matching over valuation of accounts receivable

Answer 14

False

Question 15

True or false

The percentage-of-sales method results in a more accurate valuation of receivables on the balance sheet

Answer 15

False

Question 16

True or false

Companies record and report long-term notes receivable in a discounted basis

Answer 16

True

Question 17

True or false

When the stated rate of interest exceeds the effective rate, the present value of the note receivable will be less than its face value

Answer 17

False

Question 18

True or False

When buying receivables with recourse, the purchaser assumes the risk of collectibility and absorbs any credit loss

Answer 18

False

Question 19

True or false

If substantially, all the risks and rewards of ownership of the receivables are transferred, then they are derecognized

Answer 19

True

Question 20

True or false

The international accounting standards board believes that historical cost for financial instruments provides more relevant and understandable information than fair value

Answer 20

False

Question 21

True or false

Under IFRS, A company may select the fair value option or amortized cost for valuing a group of receivables at each statement of financial position date

Answer 21

False

Question 22

True or false

Under IFRS, a company will derecognize its receivables when it elects to use the fair value option for a receivable

Answer 22

False

Question 23

True or false

Under IFRS, a company will derecognize its receivables when the contractual rights to the cash flows of the receivables no longer exist

Answer 23

True

Question 24

True or false

Under IFRS, de-recognition of a receivable is determined by using lack of control as the primary criterion

Answer 24

False

Question 25

True or false The accounts receivable turnover is computer by dividing net sales by the ending net receivables

Answer 25

False

Question 26

Asset classification A. Cash B. Receivables C. Short term investments D. Others Compensating balances held in long term borrowing arrangements

Answer 26

D

Question 27

Asset classification A. Cash B. Receivables C. Short term investments D. Others Savings account

Answer 27

A

Question 28

Asset classification A. Cash B. Receivables C. Short term investments D. Others Money market funds

Answer 28

C

Question 29

Asset classification A. Cash B. Receivables C. Short term investments D. Others Checking accounts

Answer 29

A

Question 30

Asset classification A. Cash B. Receivables C. Short term investments D. Others Postage stamps

Answer 30

D

Question 31

Asset classification A. Cash B. Receivables C. Short term investments D. Others Treasury bills maturing in six months

Answer 31

C

Question 32

Asset classification A. Cash B. Receivables C. Short term investments D. Others Postdated checks from customers

Answer 32

B

Question 33

Asset classification A. Cash B. Receivables C. Short term investments D. Others Certificate of deposit maturing in five years

Answer 33

D

Question 34

Asset classification A. Cash B. Receivables C. Short term investments D. Others Ordinary shares of another company to be sold by december 31 this year

Answer 34

C

Question 35

Asset classification A. Cash B. Receivables C. Short term investments D. Others Petty cash

Answer 35

A