Auditing quiz 3

1.     Using allowance method for bad debts, write off of accounts receivable will have the following effects w?

• a.     Decrease the allowance for bad debts

• a.     Not affect bad debt expense

• a.     Decrease the accounts receivable balance

• a.     Not affect the net realizable value of accounts receivable

• a.     Answer not given

The present value of a zero – interest note receivable payable in equal annual intallment is equal to

• a.     Total principal x PV of 1

• a.     Answer not given

• a.     Installment payment x PV of 1

• a.      

  b.     Total principal x PV of ordinary annuity of 1

• a.     Installment payment x PV of ordinary annuity of 1

1.     A journal entry which involves a debit to accounts receivable and credit to allowance for doubtful accounts most likely pertains to:

• a.     Answer not given

• a.     Recovery of write off

• b.     Adjusting entry to record the allowance account

• a.     Provisions of bad debts

• a.      

  b.     Accounts written off

1.     Considered the following statements:

Due from subsidiary

Advances from affliated companies

Subscription receivable

            Which of the following is (are) considered part of non current receivables?

• a.     Advances from affliated companies

• a.     Due from subsidiary

• b.     Answer not given

• a.     Due from subsidiary and subscription receivables

• a.     Due from subsidiary and Advances from affliated companies

  b.      

1.     Which of the following check must be included in the accounts receivable balance at year end?

• a.     Postdated checks issued to supplier

• a.     Postdated check issued to customers

• a.     Stale checks issued but still on the hands of the payee

• a.     Unreleased checks issued to supplier

• a.     Postdated check received from customers

1.     Allowance for loan impairment when amortized shall

•     

  a.     Increase interest income recognized for the period

• None of the foregoing

• a.     Not affect the interest income recognized for the period

• a.     Decrease interest income recognized for the period

Which of the following will not be considered as part of trade and other receivables?

• a.     Factor’s holdback

• a.     None of the foregoing

• a.     Dividends receivable

• a.     Accrued interest income

• a.     Claims against common carrier

Expected credit losses under PFRS 9 shall be accounted using which of the following method?

• a.     Full lifetime expected credit losses

• a.     Monthly expected credit losses

• a.     Twelve – month expected credit losses and full lifetime expected credit losses

• a.     Monthly expected credit losses and full lifetime expected credit losses

1.     The calculated doubtful accounts in this method would be trhe provision (expense) for bad debts for the current year.

• a.     Percentage of net income

• a.     Answer not given

• a.     Percentage of receivbles

• a.     Percentage of sales

• a.     Aging of receivables

1.     Which of the following methods of determining bad debts expense most closely matches expense to revenue?

• a.     Charging bad debts only as accounts are written off as uncollectible

• a.     Charging bad debts with a percentage of sales for that period

• a.     Estimating the allowance for doubtful accounts by aging the accounts receivable

• a.     Estimating the allowance for doubtful accounts as a percentage of a accounts receivable