1. A company has net sales of $1,780,800 and average accounts receivable of $424,000. What is
its accounts receivable turnover for the period?
Multiple Choice
Accounts Receivable Turnover = Net Sales/Average Accounts Receivable
Accounts Receivable Turnover = $1,246,200/$402,000 = 3.10
a) 0.32
b) 7.40
c) 23.60
d) 77.80
e) 4.20
2. Jervis accepts all major bank credit cards, including those issued by Northern Bank (NB), which
assesses a 3.5% charge on sales for using its card. On June 28, Jervis had $5,600 in NB Card
credit sales. What entry should Jervis make on June 28 to record the deposit?
Multiple Choice
a) Debit Cash $5,600; credit Sales $5,600
b) Debit Accounts Receivable $5,600; credit Sales $5,600
c) Debit Cash $5,796.00; credit Credit Card Expense $196.00; credit Sales $5,600
d) Debit Cash $5,404.00; debit Credit Card Expense $196.00; credit Sales $5,600
e) Debit Accounts Receivable $5,404.00; debit Credit Card Expense $196.00; credit Sales $5,600
3. Jax Recording Studio purchased $7,900 in electronic components from Music World. Jax signed a
90- day, 8% promissory note for $7,900. Music World's journal entry to record the sales transaction
is:
Multiple Choice
a) Debit Accounts Receivable $7,900; credit Sales $7,900
b) Debit Notes Receivable $8,058; debit Interest Receivable $158; credit Sales $7,900
c) Debit Accounts Receivable $8,058; credit Sales $8,058
d) Debit Notes Receivable $7,900; credit Sales $7,900
e) Debit Notes Receivable $8,058; credit Sales $8,058
4. A company receives a 5%, 90-day note for $1,800. The total interest due on the maturity
date is: (Use 360 days a year.)
Multiple Choice
a) $22.50
b) $52.50
c) $30.00
d) $45.00
e) $90.00
5. Jasper makes a $45,000, 90-day, 6.5% cash loan to Clayborn Co. The amount of interest that
Jasper will collect on the loan is: (Use 360 days a year.)
Multiple Choice
