19. Company ABC factored its accounts receivable with a financing vendor using a "with recourse" arrangement. What impact might this have on the company? Group of answer choices anger vendors due to later payment Improve cash conversion cycle reduce bad debt Increase days sales outstanding

19. Company ABC factored its accounts receivable with a financing vendor using a "with recourse" arrangement. What impact might this have on the company? Group of answer choices anger vendors due to later payment Improve cash conversion cycle reduce bad debt Increase days sales outstanding

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 67E

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Which of the following best represents a positive product of a lower number of days sales in receivables ratio? A. collection of receivables is quick, and cash can be used for other business expenditures B. collection of receivables is slow, keeping cash secured to receivables C. credit extension is lenient D. the lender only lends to the top 10% of potential creditors
Indicate using a (1), (−), or (0) whether each of the following events would probably cause accounts receivable (A/R), sales, and profits to increase, decrease, or be affected in an indeterminate manner: A/R Sales ProfitsThe firm restricts its credit standards. ______________ ______________ ______________The terms of trade are changed from 2/10, net 30, to 3/10, net 30. ______________ ______________ ______________The terms are changed from 2/10, net 30, to 3/10, net 40. ______________ ______________ ______________The credit manager gets tough with past-due accounts. ______________ ______________ ______________
Question 5 If company sells its accounts receivables to a factor (such as a finance company), which of the following is not true: O a. the selling company credits accounts receivable for the face value of the A/R sold. O b. the selling company is no longer responsible for collecting cash from the customers. O c. the selling company records a contra revenue for the fee paid to the factor. O d. the selling company pays a service charge (usually a percent of the A/R sold) to the factor. Moving to another question will save this response.
Match the term with its definition. Allowance Method Cash Factoring Net Realizable Value Percentage-of-Receivables Method Restricted Cash A procedure that records unc [Choose ] Time Elapsed: Hide Time Attempt due: Apr 7 at 11:59pm 18 Hours, 38 Minutes, 32 Seconds The amount of the accounts receivable balance that the company actually expects to receive. Correct Answer A procedure that records uncollectible accounts by recording the bad debt expense on an estimated basis in the accounting period in which the sale on accout takes place. C A method of selling accounts receivable where the seller guarantees payment to the purchaser in the event the debtor fails to pay. Correct Answer short term investments with a maturity date of three months or less Generated through transactions from customers for goods bought or services rendered. Correct Answer When material, is required to be segregated and shown as either a current or long term asset on the balance sheet depending on it's expected…
MULTIPLE CHOICE What is the effect of the following situations on the cost of accounts receivable financing? (A) A more thorough credit check is undertaken. (B) Receivables are sold without recourse. A. (A) Increase; (B) DecreaseB. (A) Decrease; (B) IncreaseC. (A) Decrease; (B) DecreaseD. (A) Increase; (B) IncreaseE. (A) Increase; (B) No effect
What is the effect of the following situations on the cost of accounts receivable financing? (A) A more thorough credit check is undertaken. (B) Receivables are sold without recourse CHOOSE THE LETTER OF CORRECT ANSWERA. (A) Increase; (B) DecreaseB. (A) Decrease; (B) IncreaseC. (A) Decrease; (B) DecreaseD. (A) Increase; (B) IncreaseE. (A) Increase; (B) No effect
Indicate whether each statement best describes the allowance method or the direct write-off method. List 1. Usually does not best match sales and expenses because Bad Debts Expense is not recorded until an account becomes uncollectible, which usually occurs in a period after the credit sale. 2. When an account is written off, the debit is to Bad Debts Expense. 3. Does not predict Bad Debts Expense. 4. Accounts receivable on the balance sheet is reported at net realizable value. 5. Estimates Bad Debts Expense related to the sales recorded in that period. 6. Matches the estimated loss from uncollectible accounts receivable against the sales they helped create. Method Allowance Direct write-off
some ca are Cutting Edge Co. is engaged in a small export business. The company maintains limited records. Most of the company's transactions are summarized in a cash journal; non-cash transactions are recorded by making memo entries. The following are abstracted from the company's records: Accounts receivable, increase Notes receivable, decrease Accounts payable, decrease CHAPTER 11-PROBLEM 9: P1,480,000 800,000 600,000 AUDITING PRACTICE (2022 Ed.)/CTEspenilla 377
7. Which of the following statements regarding the gross and net methods for trade accounts payable is not true? a. the net method overstates accounts payable at the end of the accounting periodb. the net method highlights management inefficiency because purchase discounts lost arerecorded whenever an invoice is paid after the cash discount period has expiredc. the gross method is more widely used in practiced. the net method more accurately measures liquidity
When converting accrual basis to cash basis of accounting, which of the following adjustments should not be made to accrual basis sales to arrive at the cash basis sales? a. Deduct beginning balance of advances from customers. b. Subtract ending accounts receivable c. Add ending accounts receivable d. Add beginning accounts receivable
Question 1: Why do we need to estimate doubtful accounts?Question 2: Which is better to have? Accounts receivable or notes receivable? And why?Question 3: What happens if companies use the direct write-off method in accounting for bad debts? What will be the effect in the financial statements? Question 4: What is the relationship of the promissory note between the maker and the payee?
Use the following T-account for Flag Corporation to answer questions 11 and 12 Beg Bal 187 150 3 End. Bal Accounts Receivable $ $ 7 18 6 15 19 11. Which of the following is an accurate description of the transactions effecting Accounts Receivable? OA Customers charged more on their accounts than they paid OB Customers paid more on their accounts than they charged OC the company incurred more debt than if paid off OD. the company paid off debt