Which of the following does not change the balance in accounts receivable?
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The amounts needed to compute a company's working capital come from which of the following financial statements? Show Balance Sheet The amounts needed (total current assets and total current liabilities) are reported on the balance sheet. More Than One Will Be Needed The operating cycle for most companies will be __________ than one year. Shorter It is common for companies to have operating cycles of perhaps 3 – 5 months. In what order will a company's current assets appear on a classified balance sheet? Descending Order (Largest To Smallest) Order Of Liquidity Current assets appear in the order in which they are expected to be converted to cash. This is referred to as the order of liquidity. Is it true or false that current liabilities are listed on a company's balance sheet in the order in which they need to be paid? False Notes payable and accounts payable (or vice versa) are usually reported as the first two current liabilities. __________ $130,000 Working capital = current assets – current liabilities = $230,000 – $100,000 = $130,000 .__________ 2.3 Current ratio = current assets / current liabilities = $230,000 / $100,000 = 2.3 : 1.How will the total amount of a company's working capital change when a $10,000 account receivable is collected? The Total Decreases By $10,000 The Total Increases By $10,000 The Total Remains The Same Cash increased by $10,000 and Accounts Receivable decreased by $10,000. Since both of these are current assets there is no change in the total amount of current assets and no change in the total amount of working capital. How will the total amount of a company's working capital change when the company pays $8,000 of its accounts payable? The Total Decreases By $8,000 The Total Increases By $8,000 The Total Remains The Same Cash decreases by $8,000 and Accounts Payable decreases by $8,000. Since both the current assets and the current liabilities will be decreasing by the same amount, there is no change in the total amount of working capital. How will a company's liquidity change when some of its products are sold from inventory? Its Liquidity Increases Since inventory is being converted to cash (and cash is the most liquid asset), the company’s liquidity increases. Its Liquidity Is Unchanged Which of the following amounts will be used in both the calculation of the current ratio and the quick ratio? The Total Amount Of Current Assets The Total Amount Of Current Liabilities The Total Amount Of Assets The Total Amount Of Liabilities Which of the following is another name for the quick ratio? __________ 1 The quick ratio (or acid test ratio) = (Cash of $40,000 + Accounts Receivable of $80,000) / current liabilities of $120,000 = $120,000 / $120,000 = 1 or 1:1 or 1 to 1. : 1.__________ 9 The receivables turnover ratio (or accounts receivable turnover ratio) = Credit sales for the year of $540,000 divided by Average accounts receivable balances during the year of $60,000 = 9 times. times.__________ 28 Days' sales in receivables = 360 or 365 / accounts receivable turnover ratio = 360 / 13 = 27.69 = 28 days when rounded, or 365 / 13 = 28.08 = 28 days when rounded. days. (Rounded to the nearest whole day.)__________ 4 Inventory turnover ratio = cost of goods sold / average inventory = $400,000 / $100,000 = 4 times. times.__________ 90 Days' sales in inventory = 360 days / inventory turnover = 360 / 4 = 90 days. days.Which is a better indicator of a company's liquidity? Which of the following will indicate the specific accounts receivable that have not been collected? Aging Of Accounts Receivable Which of the following uses amounts from more than one financial statement? A company received a $5,000 invoice for consulting services it had received. The company chooses to use its business credit card instead of paying cash. Under the accrual method of accounting, will the use of the credit card result in the company having more working capital? No The use of the credit card will result in a $5,000 increase in a current liability such as accrued expenses payable instead of a $5,000 decrease in the current asset cash. Either way, working capital will decrease by $5,000. The advantage of using the credit card is the company will keep its cash for an additional 27 to 57 days, which is a temporary benefit in its liquidity. The section of the statement of cash flows that shows the adjustments to most of a company's working capital accounts is the cash flows from __________ activities. Does an amount in parentheses on the statement of cash flows (SCF) indicate that the amount described was favorable or unfavorable for the company’s cash balance and/or liquidity? Unfavorable In addition to unfavorable, an amount in parentheses on the SCF could also mean:
If a company's accounts receivable increased by $23,000 during the year, will the $23,000 appear as a positive or negative amount on the statement of cash flows? Negative Since accounts receivable increased, the company did not collect all of the sales or service revenues that were included in the company’s net income. Therefore, there must be a subtraction from net income in the operating activities section of the SCF. If a company's accounts payable decreased $16,000 during the year, will the $16,000 appear as a positive or negative amount on the statement of cash flows? Negative Since accounts payable decreased, the company paid out more cash to its suppliers and vendors than the amount of the expenses included in the company’s net income. Since paying out cash is not good for a company’s cash balance, the decrease in accounts payable will appear in parentheses in the operating activities section of the SCF. The parentheses will mean that the decrease in accounts payable is being subtracted from the company's net income to arrive at the cash amount. Which of the following does not affect the accounts receivable account?Answer: c.
The journal entry for recognizing bad debts expense would require a debit to bad debts expense and a credit to allowance for bad debts which does not affect the accounts receivable account.
Which transaction that does not affect the accounts receivable *?Since issuing an invoice does not involve any change in cash, there is no record of accounts receivable in the accounting records.
Which is recorded by a credit to accounts receivable?Correct Answer: Option d.
Sale of inventory on account.
Which of the following will reflect the balance of accounts receivable?You can find your accounts receivable balance under the 'current assets' section on your balance sheet or general ledger. Accounts receivable are classified as an asset because they provide value to your company.
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