Exam 9: Accounting for Receivables

MacKenzie Company sold $180 of merchandise to a customer who used a Regional Bank credit card.Regional Bank deducts a 4% service charge for sales on its credit cards.MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment in approximately 5 days.The journal entry to record the collection from the credit card company would be:

The following series of transactions occurred during Year 1 and Year 2,when Foxworth Co.sold merchandise to Kevin Lewis.Foxworth's annual accounting period ends on December 31. Prepare Foxworth Co.'s journal entries to record the above transactions.The company uses the allowance method to account for its bad debt expense.

A ____________________ is a signed agreement to pay a specified amount of money either on demand or at a definite future date.

A company borrowed $10,000 by signing a 180-day promissory note at 9%.The total interest due on the maturity date is.

The person who signs a note receivable and promises to pay the principal and interest is the:

The materiality constraint,as applied to bad debts:

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.The amount of interest that Jasper will collect on the loan is:

MacKenzie Company sold $300 of merchandise to a customer who used a Regional Bank credit card.Regional Bank deducts a 1.5% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made.The journal entry to record this sale transaction would be:

A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts.Experience suggests that 4% of outstanding receivables are uncollectible.The current balance (before adjustments)in the allowance for doubtful accounts is an $800 debit.The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

MacKenzie Company sold $180 of merchandise to a customer who used a Regional Bank credit card.Regional Bank deducts a 4% service charge for sales on its credit cards.MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment in approximately 5 days.The journal entry to record this sale transaction would be:

The Branson Company uses the percent of sales method of accounting for uncollectible accounts receivable.During the current year,the following transactions occurred: Prepare the general journal entries to record these transactions.

A company has the following unadjusted account balances at December 31,of the current year;Accounts Receivable of $183,400 and Allowance for Doubtful Accounts of $1,600 (credit balance).The company uses the aging of accounts receivable to estimate its bad debts.The following aging schedule reflects its accounts receivable at the current year-end: Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31,of the current year,balance sheet.

All of the following statements regarding recognition of receivables under U.S.GAAP and IFRS are true except:

On May 31,a company had a balance in its accounts receivable of $103,200.Prepare journal entries to record the following transactions for June.

Valley Spa purchased $7,800 in plumbing components from Tubman Co.Valley Spa Studios signed a 60-day,10% promissory note for $7,800.If the note is dishonored,what is the journal entry to record the dishonored note?

A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: Prepare the adjusting entry to estimate bad debts assuming an aging analysis estimates that 8% of the outstanding accounts receivable will be uncollectible.

Which of the following is not true regarding a credit card expense?

The amount due on the maturity date of a $6,000,60-day 4%,note receivable is:

Mercks accepts the Discovery credit card for credit card sales.Mercks sends credit card receipts to Discovery on a weekly basis.Discovery charges Mercks a 3% fee.Mercks usually receives payment from Discovery within a week.Prepare journal entries to record the following transactions.

Jasper makes a $25,000,90-day,7% cash loan to Clayborn Co.Jasper's entry to record the transaction should be: