Customers are instructed to made payments to the assignee and the assignee informs the

assignor of the amount collected

Select one:
a.
Notification basis
b.
Direct basis
c.
Indirect basis
d.
Non-notification basis
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Which of the following is a method to generate cash from accounts receivable?

Select one:
a.
Assignment: No Factoring: Yes
b.
Assignment: Yes Factoring: No
c.
Assignment: Yes Factoring: Yes
d.
Assignment: No Factoring: No
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In deciding whether financing with receivables is a secured borrowing or a sale, the critical
element is the extent to which;

Select one:
a.
The age of the receivables transferred differs from the average age of the receivables.
b.
The transferee relies on funds from the transferor to maintain operations.
c.
The transferee has received substantially all the risks and rewards of ownership.
d.
The transferor of the receivable surrenders control over the assets transferred.
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After being held for 30 days, a 90-day 10% interest bearing note was discounted at a bank
at 12%: Discount will be based on;

Select one:
a.
30 days 12%
b.
60 days at 10%
c.
30 days at 10%
 d.
60 days at 12%
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Trade discounts are used to avoid frequent changes in catalogs and to alter prices for
different quantities purchased.

Select one:
a.
True
b.
False
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Which of the following statement is incorrect regarding receivables on the statement of
financial position?

Select one:
a.
Non-trade receivables are generally reported as separate items in the statement of financial
position.
b.
accounts receivable are written promises of the purchaser to pay for goods or services.
 c.
Receivables are financial instruments.
d.
Receivables are a financial asset
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Cash equivalents are

Select one:
a.
Short-term and highly liquid investments that are readily convertible into cash
b.
Short-term and highly liquid marketable equity securities
c.
Short-term and highly liquid investments that are readily convertible into cash and acquired
three months before maturity
d.
Short-term and highly liquid investments that are readily convertible into cash with
remaining maturity of three months
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The percentage-of-receivables approach of estimating uncollectible accounts emphasizes
matching over valuation of accounts receivable.

Select one:
a.
True
b.
False
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Is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

Select one:
a.
Deferred revenue
b.
Financial Instrument
c.
Income tax payable
d.
Prepaid expenses
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 Question text
Geary Co. assigned P400,000 of accounts receivable to Kwik Finance Co. as security for a
loan of P335,000. Kwik charged a 2% commission on the amount of the loan; the interest
rate on the note was 10%. During the first month, Geary collected P110,000 on assigned
accounts after deducting P380 of discounts. Geary accepted returns worth P1,350 and wrote
off assigned accounts totaling P2,980.The amount of cash Geary received from Kwik at the
time of the transfer was;

Select one:
a.
P327,000.
b.
P301,500.
c.
P335,000.
d.
P328,300.