Chapter 5, Problem 5.16S

1.

To determine

whether the statement is true or false, “Credit sales increase receivables. Collections and write-offs decrease receivables.”

2.

To determine

whether the statement is true or false, “A proper way to express credit terms is "FOB shipping point." ”

3.

To determine

the receivable figures, the total amount that customers owe the company, or the net amount the company expects to collect-is more interesting to investors as they consider buying the company's stock .

4.

To determine

To show: the manner in which the amount of sales revenue is calculated when a sales discount is offered to speed up payment.

5.

To determine

To show: the manner in which net account receivable is determined.

6.

To determine

whether the statement is true or false, “The direct write-off method of accounting for uncollectible understates assets.

7.

To determine

To state: the parties that has interest receivable, interest payable, interest expense, interest revenue and the amount of interest that will be recorded by the organizations after one month which will be signed by Company M.

8.

To determine

To show: the directional effects on the bank’s assets liabilities and equity (increase, decrease or no effect) if Bank IS accrues interest on the notes of Company M.

9.

To determine

whether the statement is true or false, “Credit card sales increase accounts receivable.”

10.

To determine

whether the statement is true or false, “Companies with strong liquidity usually factor receivables.”