Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 5, Problem 93.2C
To determine
Receivables:
The receivables in the business refer to the amount of money which is due to be received from some other business or customer.
Credit Cards:
The credit cards are the form of factors that collects money instantly in an electronic mode. In-house credit cards are those which a company issues to increase sales on credit.
The additional questions to be raised and the information in response to those questions.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s terms of credit, and setting up procedures for invoicing and collecting past-due accounts.
The following statement refers to a credit management policy. Select the best term to complete the sentence.
The conditions of the credit sale, including cash discounts and due dates, are indicated by the company’s (______) .
Consider the case of Newtown Co.:
Newtown Co.’s CFO has decided to take a closer look at the company’s credit policy. Newtown Co. has annual sales of $402.8 million, and it currently has an accounts receivable balance of $47.6 million. The first step in analyzing the firm’s credit policy is to determine its days sales outstanding (DSO).
Based on this information, Newtown Co.’s DSO is (_____) . (Note: Use 365 days as the length of a year in all calculations. Do not round intermediate calculations. Round your answer to one…
Calculate the profit of a bank by preparing income and expenditure statement.
-Assume that you are an accountant in a PNZ Bank. From the following particulars, prepare the profit and loss account of bank PNZ for the year ended 31-03-2020.
Particulars
OMR
Particulars
OMR
Locker rent
Discount on bills discounted
Director and auditor fee
Establishment Expenses
Interest on loan
Interest on fixed deposit
Interest on cash credit
Sundry expenses
Impairment for credit loss
Transfer fee
Fee and commission expenses
Provision for doubtful debts
Decrease in net changes in face value of sale of investment
70,000
2,100,000
50,000
600,000
2,800,000
2,980,000
2,400,000
20,000
2,000
5,000
25,000
300,000
900
Interest on current account
Interest on over draft
Interest on savings bank account
Postage and telegram
Printing and stationary
Discount on bills discounted
Rent and taxes
Income tax expenses
Depreciation
Fee and commission income
Profit on exchange difference arising on foreign…
A customer of a Bank Nizwa wants to know about the accounting treatment of advancing loans to Public by the bank. The branch manager of Bank Nizwa has replied to the customer that the loans provided to public will be recorded under the:
a.
Debit side of the income statement
b.
Liability side of the statement of financial position
c.
Assets side of the statement of financial position
d.
Credit side of the income statement
Chapter 5 Solutions
Cornerstones of Financial Accounting
Ch. 5 - When is revenue recognized?Ch. 5 - When is a performance obligation satisfied?Ch. 5 - At what amount should sales revenue be recorded...Ch. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Why is the direct write-off method not GAAP?
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - How much interest will be due at maturity for each...Ch. 5 - A business borrows $1,000, signing a note that...Ch. 5 - Prob. 16DQCh. 5 - Describe what happens when receivables are...Ch. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - Prob. 20DQCh. 5 - Prob. 21DQCh. 5 - How may analyzing sales and receivables provide...Ch. 5 - Prob. 23DQCh. 5 - Prob. 1MCQCh. 5 - When is revenue from the sale of merchandise...Ch. 5 - What does the phrase, Revenue is recognized at the...Ch. 5 - Prob. 4MCQCh. 5 - Prob. 5MCQCh. 5 - Prob. 6MCQCh. 5 - Prob. 7MCQCh. 5 - All of the following are ways in which receivables...Ch. 5 - Which one of the following best describes the...Ch. 5 - If a company uses the direct write-off method of...Ch. 5 - Prob. 11MCQCh. 5 - Which of the following best describes the concept...Ch. 5 - The aging method is closely related to the a....Ch. 5 - Prob. 14MCQCh. 5 - Prob. 15MCQCh. 5 - Prob. 16MCQCh. 5 - Zenephia Corp. accepted a 9-month note receivable...Ch. 5 - Prob. 18MCQCh. 5 - Prob. 19MCQCh. 5 - ( Appendix 5A) Under the gross method, the seller...Ch. 5 - Service Revenue Kibitz Fitness received S30000...Ch. 5 - Service Revenue Softball Magazine Company received...Ch. 5 - Prob. 23CECh. 5 - Prob. 24CECh. 5 - Percentage of Credit Sales Clarissa Company has...Ch. 5 - Write-Off of Uncollectible Accounts The Rock has...Ch. 5 - Aging Method On January 1, 2019, Hungryman Inc....Ch. 5 - Aging Method On January 1, 2019, Smith Inc. has...Ch. 5 - Prob. 29CECh. 5 - Prob. 30CECh. 5 - Accounts Receivable Balance Beginning accounts...Ch. 5 - Accounts Receivable Balance Beginning accounts...Ch. 5 - Prob. 33CECh. 5 - Notes Receivable Metzler Communications designs...Ch. 5 - Notes Receivable Link Communications programs...Ch. 5 - Ratio Analysis The following information pertains...Ch. 5 - Ratio Analysis Diviney Corporations net sales and...Ch. 5 - Prob. 38CECh. 5 - Service Revenue H**R Wholesalers is a retailer...Ch. 5 - Service Revenue Melrose Milk Delivery provides...Ch. 5 - Prob. 41BECh. 5 - Prob. 42BECh. 5 - Prob. 43BECh. 5 - Write-Off of Uncollectible Accounts King...Ch. 5 - Aging Method Spotted Singer sells karaoke machines...Ch. 5 - Aging Method Ingrid Inc. has strict credit...Ch. 5 - Percentage of Credit Sales Method Ruby Red...Ch. 5 - Collection of Amounts Previously Written Off...Ch. 5 - Accounts Receivable Balance Hart Inc. began the...Ch. 5 - Accounts Receivable Balance XYZ Corp sells widgets...Ch. 5 - Accounts Receivable Balance Rays beginning and...Ch. 5 - Prob. 52BECh. 5 - Prob. 53BECh. 5 - Prob. 54BECh. 5 - Ratio Analysis Dobbys income statement lists net...Ch. 5 - Ratio Analysis Rose Corporation sells upscale...Ch. 5 - Prob. 57BECh. 5 - ( Appendix 5A) Sales Discounts Harry Gardner...Ch. 5 - ( Appendix 5A) Sales Discounts Ramsden Inc....Ch. 5 - Calculation of Revenue Wallace Motors buys and...Ch. 5 - Prob. 61ECh. 5 - Calculation of Revenue from Cash Collection...Ch. 5 - Prob. 63ECh. 5 - Sales and Sales Returns and Allowances Rubin...Ch. 5 - Average Uncollectible Account Losses and Bad Debt...Ch. 5 - Bad Debt Expense: Percentage of Credit Sales...Ch. 5 - Prob. 67ECh. 5 - Bad Debt Expense: Aging Method Glencoe Supply had...Ch. 5 - Aging Receivables and Bad Debt Expense Perkinson...Ch. 5 - Allowance for Doubtful Accounts At the beginning...Ch. 5 - Collection of Amounts Previously Written Off...Ch. 5 - Prob. 72ECh. 5 - Accounting for Notes Receivable On November 30,...Ch. 5 - Recording Notes Receivable: Issuance, Payment, and...Ch. 5 - Prob. 75ECh. 5 - Ratio Analysis The following information was taken...Ch. 5 - Ratio Analysis The following information was taken...Ch. 5 - Prob. 78ECh. 5 - Prob. 79APSACh. 5 - Prob. 80APSACh. 5 - Prob. 81APSACh. 5 - Prob. 82APSACh. 5 - Bad Debt Expense: Percentage of Credit Sales...Ch. 5 - Aging Method Bad Debt Expense Cindy Bagnal, the...Ch. 5 - Determining Bad Debt Expense Using the Aging...Ch. 5 - Accounting for Notes Receivable Yarnell...Ch. 5 - Prob. 87APSACh. 5 - Prob. 88APSACh. 5 - Prob. 79BPSBCh. 5 - Prob. 80BPSBCh. 5 - Prob. 81BPSBCh. 5 - Prob. 82BPSBCh. 5 - Prob. 83BPSBCh. 5 - Aging Method Bad Debt Expense Carol Simon, the...Ch. 5 - Determining Bad Debt Expense Using the Aging...Ch. 5 - Prob. 86BPSBCh. 5 - Prob. 87BPSBCh. 5 - Prob. 88BPSBCh. 5 - Ethics and Revenue Recognition Alan Spalding is...Ch. 5 - Prob. 89.2CCh. 5 - Prob. 89.3CCh. 5 - Prob. 90.1CCh. 5 - Prob. 90.2CCh. 5 - Prob. 90.3CCh. 5 - Prob. 91CCh. 5 - Prob. 92.1CCh. 5 - Prob. 92.2CCh. 5 - Prob. 93.1CCh. 5 - Prob. 93.2CCh. 5 - Prob. 94.1CCh. 5 - Prob. 94.2CCh. 5 - Prob. 95.1CCh. 5 - Prob. 95.2CCh. 5 - Prob. 95.3CCh. 5 - Prob. 95.4CCh. 5 - Prob. 95.5CCh. 5 - Prob. 95.6CCh. 5 - Prob. 95.7CCh. 5 - Comparative Analysis: Under Armour, Inc., versus...Ch. 5 - Prob. 96.2CCh. 5 - Prob. 96.3CCh. 5 - Prob. 96.4CCh. 5 - Prob. 96.5CCh. 5 - Prob. 96.6CCh. 5 - Prob. 97.1CCh. 5 - Prob. 97.2C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Journalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording of account titles. (Note: The company uses a clearinghouse to take care of all bank as well as non-bank credit cards used by its customers. ) A. Sold merchandise for cash, $33,900. The cost of the goods sold was $18,306. B. Sold merchandise on account, $262,400. The cost of the merchandise sold was $141,696. C. Sold merchandise to customers who used MasterCard and VISA, $169,100. The cost of the merchandise sold was $91,314. D. Sold merchandise to customers who used American Express, $72,500. The cost of the merchandise sold was $39,150. E. Received an invoice from National Clearing House Credit Co. for $8,570, representing a service fee paid for processing MasterCard, VISA, and American Express sales.arrow_forwardJournalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording of account titles. (Note: The company uses a clearinghouse to take care of all bank as well as non-bank credit cards used by its customers. ) A. Sold merchandise for cash, $27,700. The cost of the goods sold was $14,681. B. Sold merchandise on account, $250,000. The cost of the merchandise sold was $132,500. C. Sold merchandise to customers who used MasterCard and VISA, $161,700. The cost of the merchandise sold was $85,701. D. Sold merchandise to customers who used American Express, $72,000. The cost of the merchandise sold was $38,160. E. Received an invoice from National Clearing House Credit Co. for $8,610, representing a service fee paid for processing MasterCard, VISA, and American Express sales. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Inventory 131 Estimated Returns…arrow_forwardJournalize the entries for the following transactions. Refer to the Chart of Accounts for the exact wording of account titles. (Note: The company uses a clearinghouse to take care of all banks as well as non-bank credit cards used by its customers.) A. Sold merchandise for cash, $25,000. The cost of the goods sold was $17,500. B. Sold merchandise on account, $98,000. The cost of the goods sold was $58,800. C. Sold merchandise to customers who used MasterCard and VISA, $475,000. The cost of the goods sold was $280,000. D. Sold merchandise to customers who used American Express, $63,000. The cost of the goods sold was $39,000. E. Received an invoice from National Clearing House Credit Co. for $13,450, representing a service fee paid for processing MasterCard, VISA, and American Express sales. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Inventory 131 Estimated Returns Inventory 140…arrow_forward
- CAATs Application—Receivables Confirmation. You are using computer audit software to prepare accounts receivable confirmations during the annual audit of the Eastern Sunrise Services Club. The company has the following data files:Master file—debtor credit record.Master file—debtor name and address.Master file—account detail:Ledger number.Sales code.Customer account number.Date of last billing.Balance (gross).Discount available to customer (memo account only).Date of last purchase.The discount field represents the amount of discount available to the customer if the customer pays within 30 days of the invoicing date. The discount field is cleared for expired amounts during the daily updating. You have determined that this is properly executed.Required:From the data files shown, list the information that you would include on the confirmation requests. Identify the file from which the information can be obtained.arrow_forwardEffective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company’s . Consider the case of Universal Exports Inc.: Universal Exports Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Universal Exports Inc. sells to its customers on credit terms of 1/10, net 30. If a customer bought $150,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Universal Exports Inc. get from the customer? $157,500 $148,500 $120,000 $127,500 If the customer paid off the account after 15 days, Universal…arrow_forwardThe following is a list of activities that companies perform in relation to their receivables.Match each of the activities listed below with a purpose of the activity listed below. 1. Selling receivables to a factor. select a purpose Determine to whom to extend creditEvaluate the liquidity of receivablesMonitor collectionsAccelerate cash receipts from receivable when necessaryEstablish a payment period 2. Reviewing company ratings in The Dun and Bradstreet Reference Book of American Business. select a purpose Establish a payment periodEvaluate the liquidity of receivablesMonitor collectionsDetermine to whom to extend creditAccelerate cash receipts from receivable when necessary 3. Collecting information on competitors’ payment period policies. select a purpose Establish a payment…arrow_forward
- Question: 1. what is the correct source documents for credit sales by business X. option: a) invoice issued by business X. b) Receipts issued by business X. c) Bank credit advice. d) internal memo. e) cash sales slip. f) Cheque butt. g) credit note issued by business X. reqiured: please answer this question by choosing the right source document.arrow_forwardWhen a customer uses a credit card such as MasterCard or VISA to buy merchandise in a store, the store owner records the sale as a/an ______________________. Group of answer choices cash sale. debit to sales and a credit to cash. credit to accounts receivable. a credit sale and debits the customer's accounts receivable account.arrow_forwardThe bank statement would function as the primary source document for which two of the following transactions? Select more than one: a. Monthly bank fees b. Sale made to a customer, using his debit card c. Interest received on current account balance d. Purchase from a supplier, by chequearrow_forward
- Question: 1. what is the correct source documents for credit purchase by business X. option: a) invoice received by the business X. b) invoice issued by business X. c) Receipts received by business X. d) Receipts issued by business X. e) Bank Debit advice. f) Bank credit advice. g) internal memo. h) cash sales slip. i) Cheque butt. j) credit note issued by business X. reqiured: please answer this question by choosing the correct source documents.arrow_forwardIf a company accepts credit cards, they must record the expense on their books. Please prepare the journal entries for the following scenario: Company A sells $480,000 on credit card sales. The credit card charges a 4.5% fee for the use of the card. The card company also deposits the cash into the company’s bank account the same night as the credit cards are accepted.arrow_forwardStrasburg Loan Company is in the consumer loan business. Strasburg borrows frombanks and loans out the money at higher interest rates. Strasburg’s bank requires Strasburgto submit quarterly financial statements to keep its line of credit. Strasburg’s main asset isNotes Receivable. Therefore, Uncollectible-Account Expense and Allowance for UncollectibleAccounts are important accounts for the company.Raquel Lanser, the company’s owner, prefers that net income reflect a steady increase ina smooth pattern, rather than an increase in some periods and a decrease in other periods. Toreport smoothly increasing net income, Lanser underestimates uncollectible-account expense insome periods. In other periods, Lanser overestimates the expense. She reasons that the incomeoverstatements roughly offset the income understatements over time.Requirements1. What is the ethical issue in this situation?2. Who are the stakeholders? What are the possible consequences to each?3. Analyze the alternatives from…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Understanding Credit; Author: UCBStudentAffairs;https://www.youtube.com/watch?v=EBdXREhOuME;License: Standard Youtube License