Reference no: EM132794713

Problem 1. Which of the following is true when a company uses the net price method of recording receivables?

a. The company records the total invoice price in both the "A/R" and "sales" accounts at the time of sale as if no cash discount is involved

b. Sales discount taken is deducted from sales on the income statement to determine net sales

c. Cash discount is reflected in the accounting records only when the discount is taken

d. Cash discount is reflected in the accounting records only when the discount is not taken

e. answer not given

Problem 2. The entry debiting accounts receivable and crediting allowance for bad debts would be made when:

a. a customer account is collected

b. a customer defaults payment

c. a previously defaulted account is collected

d. estimated uncollectible receivables are too low

Problem 3. Which of the following is not a non-trade receivable?

a. Accrued rent income

b. Claims receivable

c. Subscriptions receivable

d. Advances from customer

e. None of the above