10
Q:

How much time needs to pass for an A/R account to be considered delinquent? 

Answer:



Q:

What type of account is accounts receivable?

A) Asset B) Liability
C) Expense D) Equity
 
Answer & Explanation Answer: A) Asset

Explanation:

Accounts receivable is listed as a current asset in the balance sheet, since it is usually convertible into cash in less than one year as it is the amount owed by the customer to the seller.

 

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0 45
Q:

when a purchase on account is made the invoice becomes

A) debt B) credit
C) both A & B D) None of the above
 
Answer & Explanation Answer: A) debt

Explanation:
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0 41
Q:

The principle of diversification tells us that

A) spreading an investment across many diverse assets will eliminate some of the total risk B) concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk
C) spreading an investment across five diverse companies will not lower the total risk D) concentrating an investment in three companies all within the same industry will greatly reduce the systematic risk
 
Answer & Explanation Answer: A) spreading an investment across many diverse assets will eliminate some of the total risk

Explanation:

The principle of diversification tells us that spreading an investment across many diverse assets will eliminate some of the total risk.

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0 45
Q:

Which of the following best describes term life insurance? 

A) The insured pays a premium for a specified number of years. B) The insured is covered during his or her entire lifetime.
C) The insured pays the premium until his or her death. D) The insured can borrow or collect the cash value of the policy.
 
Answer & Explanation Answer: A) The insured pays a premium for a specified number of years.

Explanation:
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0 99
Q:

Is accounts receivable an asset or liability?

Answer

Accounts receivable is the amount to be received by the seller from the customer. Hence, it comes under asset.

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0 215
Q:

The APC is calculated as

A) consumption/income B) change in income/change in consumption
C) income/consumption D) change in consumption/change in income
 
Answer & Explanation Answer: A) consumption/income

Explanation:

The average propensity to consume (APC) is the ratio of consumption expenditures (C) to disposable income (DI), or APC = C / DI. 

 

Hence, APC = consumption/income.

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0 135
Q:

Unearned revenue is classified as

A) Liability B) Owner's equity
C) Asset D) Income
 
Answer & Explanation Answer: A) Liability

Explanation:

Unearned revenue is the money or revenue earned for the product or the service that is not yet sold or provided to the customer. Hence, it comes under liabilities.

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0 207
Q:

When an account becomes uncollectible and must be written off

A) Accounts Receivable should be credited B) Sales Revenue should be debited
C) Allowance for Doubtful Accounts should be credited D) Bad Debt Expense should be credited
 
Answer & Explanation Answer: A) Accounts Receivable should be credited

Explanation:
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