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3. When the allowance method is used to account for uncollectible accounts Bad Debts Expense is debited when: management estimates the amount of uncollectibles. a customer’s account becomes past due. an account becomes bad and is written off. a sale is made.

4. Which one of the following is not a principle of sound accounts receivable management?

Determine a payment period.

Determine to whom to extend credit.

Delay cash receipts from receivables if necessary.

Monitor collections.

5. The accounts receivable turnover is used to analyze profitability. long-term solvency. liquidity. risk.

6. The following information is provided for Sunland Company and Marigold Corp.: 7. What is Marigold’s return on assets (rounded) for 2017?

3% 2% 3% 9% 8. Which of the following is not properly classified as property, plant and equipment?

A truck held for resale by an automobile dealership.

Land improvement, such as parking lots and fences.

Building used as a factory.

Land used in ordinary business operations.

9. A characteristic of a plant asset is that it is held for sale in the ordinary course of the business.