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Cash equivalents would include investments in marketable equity securities as long as manageme
nt intedsto sell the securities in the next three months.
11.Using the balance sheet approach, bad debt expense is an indirect result of estimating the net r
ealizable value of accounts receivable.
28.Important elements of an internal control system for cash disbursements include each of the following
Except:
On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with
credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash discounts
Harvey's Wholesale Company sold supplies of $46,000 to Northeast Company on April 12 of the current
year, with terms 1/15, n/60. Harvey uses the net method of accounting for cash discounts.
A. Option a
B. Option b
C. Option c
D. Option d
C. $590,000.
D. $880,000.
83.Priscilla's Exotic Pets discounted a note receivable without recourse and the sales criteria were met. The
A. A secured borrowing.
B. Only note disclosure of the arrangement is required.
C. A sale.
D. None of the above.
97.In deciding whether financing with receivables is a secured borrowing or a sale under IFRS, t
he critical element is the extent to which:
A. The transferee has received substantially all the risks and rewards of ownership.
B. The age of the receivables transferred differs from the average age of the receivables.
C. The transferor of the receivable surrenders control over the assets transferred.
D. The transferee relies on funds from the transferor to maintain operations.
99.Ireland Corporation obtained a $40,000 note receivable from a customer on June 30, 2011. T
he note, along with interest at 6%, is due on June 30, 2012. On September 30, 2011, Ireland dis
counted the note at Cloverdale bank. The bank's discount rate is 10%. What amount of cash did
Ireland receive from Cloverdale Bank?
A. $40,600.
B. $36,000.
C. $39,220.
D. $36,820.
100.On April 1 of the current year, Troubled Company factored receivables with a carrying value
of $85,000 for $60,000 in cash from Scrooge Lenders. The transfer was made without recourse.
On April 1, Troubled would
101.If a company adopts an accounts receivable factoring program, and accounts for the factorn
g as a sale of receivables, which of the following is true in the period the company starts the pro
gram (all else equal)?
102.Assume a company has been maintaining a receivables factoring program for the past five
years, and has been experiencing the same level of sales, factoring and bad debts over that tim
e period. Customers typically pay their receivables within 60 days. Which of the following is true
with respect to the current period (all else equal)?
103.Which of the following is NOT true regarding accounting for transfers of receivables under IFRS?