ACG 3131 Exam 3 with all Correct & 100% Verified
Answers |Guaranteed to Pass
When buying receivables without recourse ✔Correct Answer-the purchaser assumes the risk
of collectibility and absorbs any credit loss.
In the gross method, sales discounts are reported as ✔Correct Answer-a deduction from sales
For receivables sold with recourse ✔Correct Answer-the seller guarantees payment to the
purchaser if they debtor fails to pay.
The net amount reported for short-term receivables is not affected when ✔Correct Answer-a
specific account receivable is determined to be uncollectible.
bank balance vs cash account ✔Correct Answer-bank balance- deposits in transit and
outstanding checks
cash account- charges for checks
A manufacturing concern would report the cost of units that were partially processed as
✔Correct Answer-inventory in the balance sheet
Goods out on approval to customers are ✔Correct Answer-Seller's Inventory
A company should abandon the historical cost principle when ✔Correct Answer-the future
utility of the inventory item falls below its original cost.
When valuing raw materials inventory at lower-of-cost-or-market, what is the meaning of the
term "market"? ✔Correct Answer-current replacement cost
Cash can be classified as a current or long-term asset. ✔Correct Answer-true
methods of determining annual bad debt expense violates the expense recognition concept
✔Correct Answer-direct write-off
Aging is an ✔Correct Answer-estimation method used with the percentage-of-accounts
receivable approach
In a transfer of receivables accounted for as a secured borrowing ✔Correct Answer-a finance
charge is recorded
Assignment and Factoring are both methods used to ✔Correct Answer-generate cash from
accounts receivable
Answers |Guaranteed to Pass
When buying receivables without recourse ✔Correct Answer-the purchaser assumes the risk
of collectibility and absorbs any credit loss.
In the gross method, sales discounts are reported as ✔Correct Answer-a deduction from sales
For receivables sold with recourse ✔Correct Answer-the seller guarantees payment to the
purchaser if they debtor fails to pay.
The net amount reported for short-term receivables is not affected when ✔Correct Answer-a
specific account receivable is determined to be uncollectible.
bank balance vs cash account ✔Correct Answer-bank balance- deposits in transit and
outstanding checks
cash account- charges for checks
A manufacturing concern would report the cost of units that were partially processed as
✔Correct Answer-inventory in the balance sheet
Goods out on approval to customers are ✔Correct Answer-Seller's Inventory
A company should abandon the historical cost principle when ✔Correct Answer-the future
utility of the inventory item falls below its original cost.
When valuing raw materials inventory at lower-of-cost-or-market, what is the meaning of the
term "market"? ✔Correct Answer-current replacement cost
Cash can be classified as a current or long-term asset. ✔Correct Answer-true
methods of determining annual bad debt expense violates the expense recognition concept
✔Correct Answer-direct write-off
Aging is an ✔Correct Answer-estimation method used with the percentage-of-accounts
receivable approach
In a transfer of receivables accounted for as a secured borrowing ✔Correct Answer-a finance
charge is recorded
Assignment and Factoring are both methods used to ✔Correct Answer-generate cash from
accounts receivable
