Chap 5 Q's

Question 1

What is the net realizable value of receivables

Answer 1

amount that is acutally expected to be collected

Question 2

What type of account is the allowance for doubtful accounts

Answer 2

Contra asset acc

Question 3

What is aging of accounts receivable

Answer 3

Amount of outstanding days used to estimate the amount of allowance for doubtful accounts

Question 4

Formula for computing interest revenue

Answer 4

IR=Principal amt*IR/100

Question 5

What is accrued interest

Answer 5

The amount of intrest that the company is to collect

Question 6

On july 1 a company A loaned company B 12k for a period of 1 year at 6 percent interest what amount of revenue will company A report for year 1. What amount of cash will company A receive upon maturity of the note

Answer 6

721.67

Question 7

What are the 4 cost flow methods

Answer 7

Specific cost- when purchase date and cost of each unit is identifiable
Avag Cost- avg cost per unit
FIFO- first items purchased are first ones sold
LIFO- last items purchased are last ones sold.