Question

Match the descriptions below with the correct answer, using the letter codes shown in the table...

Match the descriptions below with the correct answer, using the letter codes shown in the table below. (8 points) A. Realizable value B. Percentage of receivables method C. 1/10, n/60 D. Bad debt Expense E. Aging of receivables F. Direct write-off method G. Operating cycle H. Specific identification method I. FOB shipping point J. Time period assumption K. n/10 EOM

L. Percentage of sales method

M. Permanent accounts N. 2/10, EOM

O. 2/10, n/30 P. FOB destination

The economic life of a business should be divided into Answer 1 Shipping terms that would typically mean that the buyer has to pay the freight charges Answer 2 would result in a $100 discount for early payment of a $10,000 purchase Answer 3 Accounts whose balances are carried forward to the next period Answer 4 Credit terms that allow for a 2% discount if paid within the first 10 days from the purchase date. Answer 5 A method used to approximate uncollectible accounts which results in better matching of expenses and revenues Answer 6 The average time that it takes to go from cash to cash in producing revenues. Answer 7 Analysis of customer account balances by length of time they have been unpaid.

Homework Answers

Answer #1

Answer 1 Shipping terms that would typically mean that the buyer has to pay the freight charges = I. FOB shipping point

Answer 2 would result in a $100 discount for early payment of a $10,000 purchase =  C. 1/10, n/60

Answer 3 Accounts whose balances are carried forward to the next period = M. Permanent accounts

Answer 4 Credit terms that allow for a 2% discount if paid within the first 10 days from the purchase date. = O. 2/10, n/30

Answer 5 A method used to approximate uncollectible accounts which results in better matching of expenses and revenues = F. Direct write-off method

Answer 6 The average time that it takes to go from cash to cash in producing revenues. = G. Operating cycle

Answer 7 Analysis of customer account balances by length of time they have been unpaid. = E. Aging of receivables

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