Question 1

Whenever a company elects to make sales on account, it is inevitable that some receivables will become uncollectible.

Accepted Answer

A) True 
 B)False

Question 2

Match the terms with the definitions.
-A loss from failure to collect an account receivable.

Accepted Answer

A) aging the receivables 
B) allowance method 
C) bad debt expense 
D) direct write-off method 
E) matching principle
F)net receivables
G)percentage of receivables method
H)percentage of sales method 
A) aging the receivables 
B) allowance method 
C) bad debt expense 
D) direct write-off method 
E) matching principle
F)net receivables
G)percentage of receivables method
H)percentage of sales method

Question 3

Match the terms with the definitions.
-A technique that attempts to recognize bad debt expense in the same period that the related credit sales are made.

Accepted Answer

A) aging the receivables 
B) allowance method 
C) bad debt expense 
D) direct write-off method 
E) matching principle
F)net receivables
G)percentage of receivables method
H)percentage of sales method 
A) aging the receivables 
B) allowance method 
C) bad debt expense 
D) direct write-off method 
E) matching principle
F)net receivables
G)percentage of receivables method
H)percentage of sales method

Question 4

Texas Roundup uses the direct write-off method in accounting for uncollectible accounts.   ​
Required:
Record the above transactions in general journal form.

Accepted Answer

The answer of Texas Roundup uses the direct write-off method...

Question 5

The percentage of sales method emphasizes proper estimating and reporting of bad debt expense on the income statement and the matching of expenses with revenues.

Accepted Answer

A) True 
 B)False

Question 6

Most firms are able to increase sales by extending credit to customers.

Accepted Answer

A) True 
 B)False

Question 7

On the balance sheet, any account having a balance intended to be deducted from another related account balance for financial statement purposes is known as a(n)

Accepted Answer

A)  expense account. 
B)  discount account. 
C)  contra account. 
D)  uncollectible account. 
A)  expense account. 
B)  discount account. 
C)  contra account. 
D)  uncollectible account.

Question 8

The expense associated with an uncollectible account is recognized when it has been determined that a customer will not pay the amount owed under the

Accepted Answer

A)  reserve method. 
B)  allowance method. 
C)  allocation method. 
D)  direct write-off method. 
A)  reserve method. 
B)  allowance method. 
C)  allocation method. 
D)  direct write-off method.

Question 9

The amount of the year-end adjustment for Allowance for Bad Debts is equal to the aging percent of uncollectible accounts multiplied by the amount of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 10

Match the terms with the definitions.
-The amount a business expects to collect from its accounts receivable; calculated as Accounts Receivable less Allowance for Bad Debts.

Accepted Answer

A) aging the receivables 
B) allowance method 
C) bad debt expense 
D) direct write-off method 
E) matching principle
F)net receivables
G)percentage of receivables method
H)percentage of sales method 
A) aging the receivables 
B) allowance method 
C) bad debt expense 
D) direct write-off method 
E) matching principle
F)net receivables
G)percentage of receivables method
H)percentage of sales method

Question 11

The term "net receivables" refers to the difference between Accounts Receivable and Allowance for Bad Debts.

Accepted Answer

A) True 
 B)False

Question 12

The percentage of receivables method is often referred to as aging the receivables.

Accepted Answer

A) True 
 B)False

Question 13

A detailed analysis of the accounts receivable to determine the length of time each account has been outstanding is called

Accepted Answer

A)  taking a percentage of sales on account. 
B)  aging the accounts receivable. 
C)  analyzing the accounts receivable. 
D)  aging the uncollectible accounts. 
A)  taking a percentage of sales on account. 
B)  aging the accounts receivable. 
C)  analyzing the accounts receivable. 
D)  aging the uncollectible accounts.

Question 14

Aging the receivables is often referred to as the percentage of sales method.

Accepted Answer

A) True 
 B)False

Question 15

When it is possible to make a reasonable estimate of the amount of uncollectible accounts, the allowance method is preferred for financial reporting purposes.

Accepted Answer

A) True 
 B)False

Question 16

The direct write-off method is simple to apply.

Accepted Answer

A) True 
 B)False

Question 17

After aging the accounts receivable, it is estimated that $1,200 will not be collected and the allowance account has an existing credit balance of $400. If the accounts receivable total $130,000, the net receivables would be

Accepted Answer

A)  $128,800. 
B)  $129,600. 
C)  $128,400. 
D)  $128,000. 
A)  $128,800. 
B)  $129,600. 
C)  $128,400. 
D)  $128,000.

Question 18

Under the direct write-off method, the bad debt expense is recognized before it has been determined that an account is uncollectible.

Accepted Answer

A) True 
 B)False

Question 19

The percentage of receivables method of estimating uncollectible accounts is based on the relationship between the amount of accounts payable and the amount of uncollectible accounts.

Accepted Answer

A) True 
 B)False

Question 20

Under the percentage of sales method, the credit sales are analyzed to estimate the amount that will not be collected.

Accepted Answer

A) True 
 B)False

Exam 16: Accounting for Accounts Receivable

Whenever a company elects to make sales on account, it is inevitable that some receivables will become uncollectible.

Match the terms with the definitions. -A loss from failure to collect an account receivable.

Match the terms with the definitions. -A technique that attempts to recognize bad debt expense in the same period that the related credit sales are made.

Texas Roundup uses the direct write-off method in accounting for uncollectible accounts. ​ Required: Record the above transactions in general journal form.

The percentage of sales method emphasizes proper estimating and reporting of bad debt expense on the income statement and the matching of expenses with revenues.

Most firms are able to increase sales by extending credit to customers.

On the balance sheet, any account having a balance intended to be deducted from another related account balance for financial statement purposes is known as a(n)

The expense associated with an uncollectible account is recognized when it has been determined that a customer will not pay the amount owed under the

The amount of the year-end adjustment for Allowance for Bad Debts is equal to the aging percent of uncollectible accounts multiplied by the amount of accounts receivable.

Match the terms with the definitions. -The amount a business expects to collect from its accounts receivable; calculated as Accounts Receivable less Allowance for Bad Debts.

The term "net receivables" refers to the difference between Accounts Receivable and Allowance for Bad Debts.

The percentage of receivables method is often referred to as aging the receivables.

A detailed analysis of the accounts receivable to determine the length of time each account has been outstanding is called

Aging the receivables is often referred to as the percentage of sales method.

When it is possible to make a reasonable estimate of the amount of uncollectible accounts, the allowance method is preferred for financial reporting purposes.

The direct write-off method is simple to apply.

After aging the accounts receivable, it is estimated that $1,200 will not be collected and the allowance account has an existing credit balance of $400. If the accounts receivable total $130,000, the net receivables would be

Under the direct write-off method, the bad debt expense is recognized before it has been determined that an account is uncollectible.

The percentage of receivables method of estimating uncollectible accounts is based on the relationship between the amount of accounts payable and the amount of uncollectible accounts.

Under the percentage of sales method, the credit sales are analyzed to estimate the amount that will not be collected.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

Filters

Texas Roundup uses the direct write-off method in accounting for uncollectible accounts. Required: Record the above transactions in general journal form.