Thebiggestriskofsellingoncreditis:
A. theriskofpostingapaymenttothewrongsubsidiaryaccount
B. theriskofnotcollectingsomeofthereceivables
C. theriskoflosingasale
D. noneoftheabove
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Undertheallowancemethod:
A. thecompanyrecordstheuncollectible-accountexpensewhenthecustomerdoesnotpay
B. theallowanceforuncollectibleaccountsisacontraaccounttogrossrevenue
C. theallowanceforuncollectibleaccountswillnormallyhaveadebitbalance
D. thecompanysetsupanallowanceforuncollectibleaccountstoestimatetheamountofthereceivablesthecompanydoesnotexpecttocollect.
Allowanceforuncollectibleaccountsisclassifiedas:
A. acontra-expenseaccount
B. acontra-revenueaccount
C. acontra-assetaccount
D. noneoftheabove
Thepurposeofowningtradingsecuritiesisto:
A. increasecashreserves
B. holdtheinvestmentforatleastoneyear
C. selltheinvestmentformorethanitscost
D. selltheinvestmenttodecreasenetincome
Applecompanypurchasestradingsecurityfor$12,000.Theentrytorecordthistransactionwillincludea:
A. credittotheinvestmentaccount
B. debittotheinvestmentaccount
C. credittothedividendrevenueaccount
D. debittotheunrealizedgainaccount
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