Question 1

On 1 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. If the company accrues interest at year- end only, please provide the journal entry needed at year- end.

Accepted Answer

The answer of On 1 October 2014, Allen Jewellery Company...

Question 2

On 1 March 2014, Bayonne Services made a loan to one of its officers. The officer signed a 6- month bill for $4 000 at 8%. Bayonne generally accrues interest at year- end only, so at the time the bill matured, Bayonne had not accrued any interest revenue. On 1 August when the bill matured, the officer settled in full with the company. How much interest revenue did Bayonne record?

Accepted Answer

The interest revenue is calculated as the principal amount multiplied by the interest rate and the time period. For a $4,000 loan at 8% annual interest for 6 months, the interest is $4,000 * 0.08 * (6/12) = $160.

Question 3

On 2 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. What is the journal entry to record the acceptance of the bill?

Accepted Answer

The answer of On 2 October 2014, Allen Jewellery Company...

Question 4

On 1 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. Please provide the journal entry needed to record the conversion of an Accounts receivable into a Bill receivable.

Accepted Answer

The answer of On 1 October 2014, Allen Jewellery Company...

Question 5

On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. How much interest revenue was earned for the entire term of the bill?

Accepted Answer

The interest revenue is calculated using the formula: Principal x Rate x Time. Here, the principal is $2,000, the rate is 12% per annum, and the time is 9/12 of a year. So, $2,000 x 0.12 x (9/12) = $180.

Question 6

Total interest accrued on a $7 500, 5%, 3- month bill is:

Accepted Answer

The answer of Total interest accrued on a $7 500,...

Question 7

On 1 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. Interest revenue was accrued through to 31 December 2014. Allen receives the maturity value of the bill (the original principal plus all of the interest)on the due date. What journal entry is needed when the funds are collected?

Accepted Answer

The answer of On 1 October 2014, Allen Jewellery Company...

Question 8

What is the maturity value of a bill?

Accepted Answer

The maturity value of a bill is the total amount that will be paid at the end of the term, which includes the principal amount plus any interest that has accrued.

Question 9

On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. How much interest revenue was earned during the year 2014?

Accepted Answer

Interest revenue for 2014 is calculated for one month (December) since the sale occurred on December 1, 2014. The interest for one month is $2,000 * 12% * (1/12) = $20.

Question 10

On 1 September 2013, Adirondac Marine Supplies made a credit sale to one of its customers. The customer signed a 6- month bill for $1 500 at 10%. How much interest revenue did Adirondac record in the year 2014?

Accepted Answer

The interest for the 6-month period is calculated as $1,500 * 10% * (6/12) = $75. Since the bill was signed on 1 September 2013, the interest for 2013 would be for 4 months, which is $1,500 * 10% * (4/12) = $50. Therefore, the interest for 2014 (the remaining 2 months) is $75 - $50 = $25.

Question 11

On 1 January, Ajax Company accepted a one- year bill for $5 000 at 4% from one of its customers. When the bill matured on 31 December, the customer was unable to pay, and Ajax treated it as a dishonoured bill. Please provide the journal entry needed by Ajax.

Accepted Answer

The answer of On 1 January, Ajax Company accepted a...

Question 12

On 1 September 2013, Adirondac Marine Supplies made a credit sale to one of its customers. The customer signed a 6- month bill for $1 500 at 10%. When the bill matured on 1 March 2014, the customer settled with the company in full. How much cash did Adirondac collect from the customer?

Accepted Answer

The customer signed a 6-month bill for $1,500 at 10% interest. The interest for 6 months is $1,500 * 10% * (6/12) = $75. Therefore, the total amount collected is $1,500 + $75 = $1,575.

Question 13

On 1 September 2013, Adirondac Marine Supplies made a loan to one of its customers. The customer signed a 6- month bill for $1 500 at 10%. How much interest revenue did Adirondac record in the year 2013?

Accepted Answer

The answer of On 1 September 2013, Adirondac Marine Supplies...

Question 14

Which of the following would be included in the entry to record a dishonoured Bill receivable by the payee?

Accepted Answer

When a bill receivable is dishonoured, the payee debits Accounts Receivable to reflect the amount that is still owed by the debtor.

Question 15

On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. What was the total amount of cash collected by Parsons when the bill matured?

Accepted Answer

The interest for 9 months is calculated as $2,000 * 12% * (9/12) = $180. Therefore, the total amount collected is $2,000 + $180 = $2,180.

Question 16

On 1 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. If the company accrues interest at year- end only, how much interest revenue should be accrued on 31 December 2014?

Accepted Answer

The answer of On 1 October 2014, Allen Jewellery Company...

Question 17

On 1 September 2013, Adirondac Marine Supplies made a credit sale to one of its customers. The customer signed a 6- month bill for $1 500 at 10%. How much interest revenue did Adirondac earn over the life of the bill?

Accepted Answer

The answer of On 1 September 2013, Adirondac Marine Supplies...

Question 18

On 1 January, Ajax Company accepted a one- year bill for $5 000 at 4% from one of its customers. When the bill matured on 31 December, the customer was unable to pay, and Ajax treated it as a dishonoured bill. How much interest revenue did Ajax record at 31 December?

Accepted Answer

The interest revenue is calculated as the principal amount ($5,000) multiplied by the interest rate (4%) for one year, which equals $200.

Question 19

A Bill receivable was NOT paid at maturity. Which of the following will be included in the journal entry to record the dishonouring of the bill at maturity?

Accepted Answer

When a bill receivable is dishonoured, the amount is transferred back to accounts receivable, as the debtor still owes the money.

Question 20

On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. How much interest revenue was earned during the year 2015?

Accepted Answer

The answer of On 1 December 2014, Parsons Sales sold...

Quiz 9: Receivables

On 1 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. If the company accrues interest at year- end only, please provide the journal entry needed at year- end.

On 2 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. What is the journal entry to record the acceptance of the bill?

On 1 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. Please provide the journal entry needed to record the conversion of an Accounts receivable into a Bill receivable.

On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. How much interest revenue was earned for the entire term of the bill?

Total interest accrued on a $7 500, 5%, 3- month bill is:

What is the maturity value of a bill?

On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. How much interest revenue was earned during the year 2014?

On 1 September 2013, Adirondac Marine Supplies made a credit sale to one of its customers. The customer signed a 6- month bill for $1 500 at 10%. How much interest revenue did Adirondac record in the year 2014?

On 1 January, Ajax Company accepted a one- year bill for $5 000 at 4% from one of its customers. When the bill matured on 31 December, the customer was unable to pay, and Ajax treated it as a dishonoured bill. Please provide the journal entry needed by Ajax.

On 1 September 2013, Adirondac Marine Supplies made a credit sale to one of its customers. The customer signed a 6- month bill for $1 500 at 10%. When the bill matured on 1 March 2014, the customer settled with the company in full. How much cash did Adirondac collect from the customer?

On 1 September 2013, Adirondac Marine Supplies made a loan to one of its customers. The customer signed a 6- month bill for $1 500 at 10%. How much interest revenue did Adirondac record in the year 2013?

Which of the following would be included in the entry to record a dishonoured Bill receivable by the payee?

On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. What was the total amount of cash collected by Parsons when the bill matured?

On 1 October 2014, Allen Jewellery Company accepted a 4- month, 10% bill for $2 400 in settlement of an overdue account receivable. If the company accrues interest at year- end only, how much interest revenue should be accrued on 31 December 2014?

On 1 September 2013, Adirondac Marine Supplies made a credit sale to one of its customers. The customer signed a 6- month bill for $1 500 at 10%. How much interest revenue did Adirondac earn over the life of the bill?

On 1 January, Ajax Company accepted a one- year bill for $5 000 at 4% from one of its customers. When the bill matured on 31 December, the customer was unable to pay, and Ajax treated it as a dishonoured bill. How much interest revenue did Ajax record at 31 December?

A Bill receivable was NOT paid at maturity. Which of the following will be included in the journal entry to record the dishonouring of the bill at maturity?

On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. How much interest revenue was earned during the year 2015?