Question 1

The journal entry to write off an account judged to be uncollectible under the allowance would include a credit to:

Accepted Answer

A) Sales. 
B) Accounts Receivable. 
C) Allowance for Doubtful Accounts. 
D) Bad Debts Expense. 
A) Sales. 
B) Accounts Receivable. 
C) Allowance for Doubtful Accounts. 
D) Bad Debts Expense.

Question 2

Which of the following situations would likely result in too many uncollectible accounts?

Accepted Answer

A) The company extends credit easily. 
B) The company has a strict credit policy. 
C) The company has a cash only policy. 
D) None of these answers is correct. 
A) The company extends credit easily. 
B) The company has a strict credit policy. 
C) The company has a cash only policy. 
D) None of these answers is correct.

Question 3

What type of account is an Allowance for Doubtful Accounts?

Accepted Answer

A) Asset 
B) Contra-asset 
C) Revenue 
D) Contra-revenue 
A) Asset 
B) Contra-asset 
C) Revenue 
D) Contra-revenue

Question 4

A major cost of selling goods on account could be:

Accepted Answer

A) accounts payable. 
B) cash shortages. 
C) easy credit. 
D) uncollectible accounts. 
A) accounts payable. 
B) cash shortages. 
C) easy credit. 
D) uncollectible accounts.

Question 5

The adjustment for bad debts using the percentage of receivables ignored the debit balance in the Allowance account.This error would cause:

Accepted Answer

A) total assets to be overstated. 
B) total liabilities to be understated. 
C) net income to be understated. 
D) None of these is correct. 
A) total assets to be overstated. 
B) total liabilities to be understated. 
C) net income to be understated. 
D) None of these is correct.

Question 6

A company is not able to reasonably estimate its bad debts expense.The method it may use is:

Accepted Answer

A) net realizable value method. 
B) direct write-off method. 
C) aging method. 
D) income statement method. 
A) net realizable value method. 
B) direct write-off method. 
C) aging method. 
D) income statement method.

Question 7

Under the allowance method,Bad Debt Expense is recorded:

Accepted Answer

A) as an estimate. 
B) when an individual account is written off. 
C) several times during the year as needed. 
D) None of these answers is correct. 
A) as an estimate. 
B) when an individual account is written off. 
C) several times during the year as needed. 
D) None of these answers is correct.

Question 8

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 9

Gross Accounts Receivable is $17,000.Allowance for Doubtful Accounts has a credit balance of $100.Net credit sales for the year are $120,000.In the past,2% of credit sales had proved uncollectible,and an aging of the receivables indicates $2,100 as uncollectible.What would be the adjusted balance of the Allowance account under the balance sheet approach?

Accepted Answer

A) $2,000 
B) $2,500 
C) $2,100 
D) $2,200 
A) $2,000 
B) $2,500 
C) $2,100 
D) $2,200

Question 10

The net realizable value of a company's Accounts Receivables is:

Accepted Answer

A) increased at the time of a specific write-off. 
B) decreased at the time of a specific write-off. 
C) unchanged at the time of a specific write-off. 
D) the guaranteed amount the company will collect from its customers. 
A) increased at the time of a specific write-off. 
B) decreased at the time of a specific write-off. 
C) unchanged at the time of a specific write-off. 
D) the guaranteed amount the company will collect from its customers.

Question 11

Net Realizable Value can be defined as:

Accepted Answer

A) the Gross Accounts Receivable. 
B) the Current Bad Debts Expense. 
C) the amount of Accounts Receivable you do not expect to collect. 
D) the Gross Accounts Receivable minus the Allowance for Doubtful Accounts. 
A) the Gross Accounts Receivable. 
B) the Current Bad Debts Expense. 
C) the amount of Accounts Receivable you do not expect to collect. 
D) the Gross Accounts Receivable minus the Allowance for Doubtful Accounts.

Question 12

Record bad debt expense using an allowance method.
Debit account ________ Credit account ________

Accepted Answer

The answer of Record bad debt expense using an allowance...

Question 13

As the past due time increases for an account,the likelihood of collecting that account:

Accepted Answer

A) usually goes down 
B) usually goes up. 
C) Time does not affect collectibility. 
D) None of the above 
A) usually goes down 
B) usually goes up. 
C) Time does not affect collectibility. 
D) None of the above

Question 14

Determine the estimated net realizable (collectable)value:
Bad debts are estimated to be 1% of receivables
 $\begin{array}{lr}
\text { Accounts receivable balance } & \$ 880,920 \
\text { Allowance for bad debts balance (debit) } & \$ 1,809 \
\text { Sales net value } & \$ 6,500,000
\end{array}$ 
$ ________

Accepted Answer

The answer of Determine the estimated net realizable (collectable)value:
Bad debts...

Question 15

Wrote off an account using the direct write off method.
Debit account ________ Credit account ________

Accepted Answer

The answer of Wrote off an account using the direct...

Question 16

The two methods of accounting for uncollectible receivables are the direct write-off method and the:

Accepted Answer

A) equity method. 
B) cash method. 
C) interest method. 
D) allowance method. 
A) equity method. 
B) cash method. 
C) interest method. 
D) allowance method.

Question 17

Jody Sport and Hobby's Allowance for Doubtful Accounts had an unadjusted credit balance of $600.The manager estimates that $700 of the Accounts Receivable is uncollectible.Using the balance sheet approach,the year-end adjusting entry for Bad Debts Expense:

Accepted Answer

A) includes a debit to the Bad Debt Expense account for $100. 
B) includes a debit to the Bad Debts Expense account for $700. 
C) includes a credit to the Bad Debts Expense account for $1,300. 
D) includes a credit to the Bad Debts Expense account for $100. 
A) includes a debit to the Bad Debt Expense account for $100. 
B) includes a debit to the Bad Debts Expense account for $700. 
C) includes a credit to the Bad Debts Expense account for $1,300. 
D) includes a credit to the Bad Debts Expense account for $100.

Question 18

The general ledger controlling account for Accounts Receivable shows a debit balance of $120,000.The Allowance for Doubtful Accounts has a credit balance of $5,000.An aging report of accounts receivable accounts resulted in an estimate of $23,000 of uncollectible accounts receivable.Calculate the amount of the adjustment using the balance sheet approach.
Amount of the adjustment ________

Accepted Answer

The answer of The general ledger controlling account for Accounts...

Question 19

The Allowance for Doubtful Accounts may have a debit balance before adjustment.

Accepted Answer

A) True 
 B)False

Exam 13: Accounting for Bad Debts

The journal entry to write off an account judged to be uncollectible under the allowance would include a credit to:

Which of the following situations would likely result in too many uncollectible accounts?

What type of account is an Allowance for Doubtful Accounts?

A major cost of selling goods on account could be:

The adjustment for bad debts using the percentage of receivables ignored the debit balance in the Allowance account.This error would cause:

A company is not able to reasonably estimate its bad debts expense.The method it may use is:

Under the allowance method,Bad Debt Expense is recorded:

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature. -

The net realizable value of a company's Accounts Receivables is:

Net Realizable Value can be defined as:

Record bad debt expense using an allowance method. Debit account ________ Credit account ________

As the past due time increases for an account,the likelihood of collecting that account:

Determine the estimated net realizable (collectable)value: Bad debts are estimated to be 1% of receivables Accounts receivable balance \ 880,920 Allowance for bad debts balance (debit) \ 1,809 Sales net value \ 6,500,000 $ ________

Wrote off an account using the direct write off method. Debit account ________ Credit account ________

The two methods of accounting for uncollectible receivables are the direct write-off method and the:

Jody Sport and Hobby's Allowance for Doubtful Accounts had an unadjusted credit balance of $600.The manager estimates that $700 of the Accounts Receivable is uncollectible.Using the balance sheet approach,the year-end adjusting entry for Bad Debts Expense:

The Allowance for Doubtful Accounts may have a debit balance before adjustment.

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Record bad debt expense using an allowance method. Debit account Credit account

Wrote off an account using the direct write off method. Debit account Credit account