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1

Marketable securities are classified into three groups. Which one of the following is not one of those groups?
A)Available-for-sale
B)Trading
C)Held-to maturity
D)Holding securities
2

Which of the following is not a cash equivalent?
A)Money market funds
B)US treasury bills
C)Accounts receivable
D)High-grade commercial paper
3

Available-for-sale securities are usually held for how long?
A)1 to 3 months
B)less than a year
C)6 to 18 months
D)more than 1 year
4

Available-for-sale securities are valued on the balance sheet at:
A)Historical cost
B)Lower of cost or market value
C)Fair market value
D)Cost less depreciation
5

The allowance for doubtful accounts is:
A)An asset
B)An expense
C)A contra-asset
D)A liability
6

When an account receivable is written-off against an allowance for doubtful account:
A)An expense is created
B)Net assets decrease
C)Net assets increase
D)There is no change to total net assets
7

The following information relates to questions 7 and 8.
 
Net credit sales..........................................$900
Accounts receivable-beginning of year..............$100
Accounts receivable-end of year......................$200


What is the accounts receivable turnover?
A)3 times
B)5 times
C)6 times
D)9 times
8

What is the average number of days to collect?
A)50
B)61
C)36
D)72
9

The traditional practice of resolving uncertainties by choosing an asset valuation at the lower range of reasonableness is known as:
A)Factoring
B)Conservatism
C)Default
D)Mark-to-market
10

Transactions in which a business sells its accounts receivable to a financial institution is known as:
A)Line of credit
B)Cash equivalent
C)Factoring
D)Mark-to-market





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