Accounts Receivable Test

Is accounts receivable an asset?

• No

• Yes

What are accounts receivable?

• Amounts owed by customers

• Amounts owed by suppliers

If a sale is made to a customer on credit, the account credited is?

• Revenue

• Accounts receivable

Suppose an invoice is issued for 1,000 1% 10 days, net 30 terms. What is the discount if paid in 9 days?

• 100

• 10

The amount of cash expected to be collected from accounts receivable is called?

• Book value

• Net realizable value

A provision against accounts receivable for potential bad debts is credited to which account?

• Allowance for doubtful accounts

• Bad debt expense

A provision for potential bad debts in accounts receivable is debited to which account?

• Allowance for doubtful accounts

• Bad debt expense

To receive a cash payment from an account customer you debit or credit accounts receivable?

• Credit

• Debit

Accounts receivable is used in which ratio?

• Current ratio

• Fixed asset turnover ratio

When an accounts receivable previously provided for is written off, which account is debited?

• Allowance for doubtful accounts

• Accounts receivable