Questions from Financial Accounting

Q: With respect to notes receivable, explain what each of these represent

With respect to notes receivable, explain what each of these represent: (a) face value, (b) annual interest rate, and (c) fraction of the year.

Q: What will be the total interest earned on a 6%, $

What will be the total interest earned on a 6%, $2,000 note receivable that is due in nine months?

Q: Interest on a note receivable typically is due along with the face

Interest on a note receivable typically is due along with the face value at the note’s maturity date. If the end of the accounting period occurs before the maturity date, how do we record interest ear...

Q: How is the receivables turnover ratio measured? What does this ratio

How is the receivables turnover ratio measured? What does this ratio indicate? Is a higher or lower receivables turnover preferable?

Q: How is the average collection period of receivables measured? What does

How is the average collection period of receivables measured? What does this ratio indicate? Is a higher or lower average collection period preferable?

Q: How can effectively managing receivables benefit a company?

How can effectively managing receivables benefit a company?

Q: Which method, the percentage-of-receivables method or the

Which method, the percentage-of-receivables method or the percentage-of-credit-sales method, is typically used in practice? Why?

Q: What is the difference between a trade receivable and a nontrade receivable

What is the difference between a trade receivable and a nontrade receivable?

Q: Explain why the percentage-of-receivables method is referred to

Explain why the percentage-of-receivables method is referred to as the balance sheet method and the percentage-of-credit-sales method is referred to as the income statement method.

Q: At the beginning of the year, Mitchum Enterprises allows for estimated

At the beginning of the year, Mitchum Enterprises allows for estimated uncollectible accounts of $15,000. By the end of the year, actual bad debts total $17,000. Record the write- off to uncollectible...