Exam 9: Accounting for Receivables

Jervis accepts all major bank credit cards,including those issued by Northern Bank (NB),which assesses a 3% charge on sales for using its card.On June 28,Jervis had $3,500 in NB Card credit sales.What entry should Jervis make on June 28 to record the deposit?

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

A company ages its accounts receivables to determine its end of period adjustment for bad debts.At the end of the current year,management estimated that $15,750 of the accounts receivable balance would be uncollectible.Prior to any year-end adjustments,the Allowance for Doubtful Accounts had a debit balance of $375.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

The maturity date of a note receivable:

The _________________ method of accounting for bad debts records the loss from an uncollectible account receivable at the time it is determined to be uncollectible (and not before).

Uniform Supply accepted a $4,800,90-day,10% note from Tracy Janitorial on October 17.If the note is dishonored,what entry should Uniform Supply make on January 15 of the next year?

Uniform Supply accepted a $4,800,90-day,10% note from Tracy Janitorial on October 17.What entry should Uniform Supply make on December 31,to record the accrued interest on the note?

The allowance method based on the idea that a given percent of a company's credit sales for the period is uncollectible is:

Woods Co.accepts the World Express credit card from its customers.World Express charges a 3.5% service fee and pays Woods the amount net of World Express charges once a month.During February,Woods sold $24,000 worth of merchandise to customers using the World Express charge card.On February 28,Woods sent the $24,000 worth of credit card receipts to World Express.On March 4,Woods received cash proceeds from World Express for the February credit sales less the service charge.Prepare the journal entries to record February sales and the March 4 cash receipt.

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off,the entry to record the write-off against the allowance account results in:

Jax Recording Studio purchased $7,800 in electronic components from Music World.Jax signed a 60-day,8% promissory note for $7,800.Music World's journal entry to record the collection on the maturity date is:

____________________________ are amounts owed by customers from credit sales where payment is required in periodic amounts over an extended time period.

Mullis Company sold merchandise on account to a customer for $625,terms n/30.The journal entry to record this sale transaction would be:

Jax Recording Studio purchased $7,800 in electronic components from Music World.Jax signed a 60-day,8% promissory note for $7,800.Music World's journal entry to record the sales transaction is:

The person to whom a note is payable is known as the ______________.

On February 1,a customer's account balance of $2,300 was deemed to be uncollectible.What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method?

Brinker accepts all major bank credit cards,including First Savings Bank's,which assesses a 2.5% charge on sales for using its card.On May 26,Brinker had $4,800 in First Savings Bank Card credit sales.What entry should Brinker make on May 26 to record the deposit?

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used,a company should debit _______________________ and credit accounts receivable.

Jordan Co.uses the allowance method of accounting for uncollectible accounts.Jordan Co.accepted a $5,000,12%,90-day note dated May 16,from Beckam Co.in exchange for its past-due account receivable.Make the necessary general journal entries for Jordan Co.on May 16 and the August 14 maturity date,assuming that the: a.Note is held until maturity and collected in full at that time. b.Note is dishonored;the amount of the note and its interest are written off as uncollectible.

At December 31 of the current year,a company reported the following: Total sales for the current year: $980,000 includes $160,000 in cash sales Accounts receivable balance at Dec.31,end of current year: $160,000 Allowance for Doubtful Accounts balance at January 1,beginning of current year: $7,300 credit Bad debts written off during the current year: $5,800. Prepare the necessary adjusting entries to record bad debts expense assuming this company's bad debts are estimated to equal 5% of accounts receivable.