QUIZ TRUE OR FALSE

1. Gain or loss on repossession can be determined by comparing the cost to be recovered

and the resale value of the repossessed merchandise.
2. Collection of installment receivables is spread over a long period of time so it is therefore
allowed to charge the customer an interest based on the unpaid balance.
3. The first step in accounting procedures for installment sales is to trace cash receipts as
they arrive to the installment sales to which they relate.
4. Time of sales method and Time of Collection method gives a similar GPR rate.
5. The theoretically correct presentation of Deferred Gross Profit is as a liability account.
6. If collection is not reasonably assured, point of realization is collection.
7. GPR can be computed by dividing the unrealized gross profit by the installment sales.