Securities are divided into debt and equity securities. Trading in securities is one form of investment that guarantees maximum profits when properly placed. Did you understand this chapter fully? The quiz below is designed to help you answer that with ease. Give it a try and polish up on the areas you note afterwards.
Increase cash reserves.
Hold for a long-term period.
Sell the investment for more than its cost.
Sell the investment to decrease net income.
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Current assets
Long-term assets
Equity securities
Available-for-sale securities
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Current market
Investment
Market or investment
Fair
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A debit to cash and credit to dividend revenue.
A debit to dividend revenue and credit to cash.
A debit to cash and credit to trading investment.
None of the above.
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The investment is sold.
The cost of the investment differs from the current market value.
The investment has not been sold.
Both B and C occur.
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The investment is sold
The cost of the investment differs from the current market value
The investment has not been sold
Both B and C occur
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Accounts receivable
Notes receivable
Accounts payable
Notes payable
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More formal contracts than accounts receivable
Are due on the maturity date
May require the borrower to pledge security for the loan
All of the above
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General ledger.
Trade ledger.
Control ledger.
Subsidiary ledger.
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The risk of posting a payment to the wrong subsidiary account.
The risk of not collecting some of the receivables.
The risk of losing a sale.
None of the above.
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Doubtful-account expense.
Bad-debt expense.
Both A and B
None of the above.
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The direct write-off method.
The percent-of-sales method.
The allowance method.
None of the above.
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Aging-of-receivables method and direct write-off method.
Percent- of- sales method and the aging-of-receivables method.
Allowance method and the direct write-off method.
Percent of sales method and the direct write-off method.
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Aging-of-receivables method
Percent-of-sales method.
Allowance method.
Direct write-off method.
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Aging-of-receivables.
Uncollectible-account expense.
Direct write-off.
Aging expense.
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A contra-expense account.
A contra-revenue account.
A contra-asset account.
None of the above.
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Sales Returns and Allowances
Unearned Accounts Receivable
Allowance for Uncollectible Accounts
Uncollectible Accounts Expense
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Sales less sales returns and allowances.
Accounts receivable plus allowance for uncollectible accounts.
Accounts receivable less allowance for uncollectible accounts.
Accounts payable plus allowance for uncollectible accounts.
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Matching principle.
Historical cost principle.
Revenue recognition principle.
Full disclosure principle.
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The ending balance in the Accounts Receivable account.
The aging accounts receivable schedule.
A percentage of total revenues.
A percentage of net accounts receivable.
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Accounts Receivable and a credit to Allowance for Uncollectible Accounts.
Allowance for Uncollectible Accounts and a credit to Uncollectible-Account Expense.
Allowance for Uncollectible Accounts and a credit to Accounts Receivable.
Uncollectible-Account Expense and credit to Allowance for Uncollectible Accounts.
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Debit to Accounts Receivable for $2,600.
Credit to Uncollectible-Account Expense for $2,600.
Credit to Allowance for Uncollectible Accounts for $2,600.
Debit to Allowance for Uncollectible Accounts for $2,600.
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$9,200.
$7,200.
$5,200.
$2,000.
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$9,200.
$7,200.
$5,200.
$2,000.
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$8,000.
$6,000.
$4,000.
$2,000.
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$116,000.
$100,000.
$84,000.
$16,000.
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$41,900 and $40,000.
$40,000 and $38,100.
$38,100 and 40,000.
$40,000 and $41,900.
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All $5,000 is a current asset.
All $5,000 is a long term asset.
$1,000 is a current asset and $4,000 is a long term asset.
$4,000 is a current asset and $1,000 is a long term asset.
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Maturity note.
Promissory note.
Account receivable
Unearned revenue
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$8,000
$8,200
$200.
$8,800
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960
8,240
240
8960
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Debit Note Receivable and credit Service Revenue.
Debit Service Revenue and credit Note Receivable.
Debit Note Receivable and credit Cash.
Debit Cash and credit Note Receivable.
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$3,000.
$1,750.
$1,500.
$1,141.
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$816
$800
$784
$768
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Decreases assets and increases revenues.
Decreases assets and increases expenses.
Increases assets and increases revenues.
Increases assets and increases revenues.
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Accounts payable
Quick ratio
Liquidity ratio
Collection period
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Interest Revenue.
Interest Receivable.
Note Receivable.
Cash.
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