Question 1

Match each description to the appropriate term a-h).
-A note that is not paid when it is due

Accepted Answer

A) Face amount 
B) Term 
C) Interest 
D) Maturity value 
E) Dishonored note
F)Maker
G)Notes receivable
H)Interest rate 
A) Face amount 
B) Term 
C) Interest 
D) Maturity value 
E) Dishonored note
F)Maker
G)Notes receivable
H)Interest rate E

Question 2

Notes Receivable and Accounts Receivable can also be called trade receivables.

Accepted Answer

A) True 
 B)False  True

Question 3

Other than Accounts Receivable and Notes Receivable, name other receivables that might be included in the general ledger.

Accepted Answer

Interest Receivable, Receivables from Officers or Employees, Taxes Receivable

Question 4

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables:
Feb. 20 Received $1,000 from Andrew Warren and wrote off the remainder owed of $4,000 as uncollectible.
May 10 Reinstated the account of Andrew Warren and received $4,000 cash in full payment.

Accepted Answer

The answer of Journalize the following transactions using the direct...

Question 5

Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write off this account, Dalton should debit

Accepted Answer

A)  Bad Debt Expense and credit Accounts Receivable 
B)  Bad Debt Expense and credit Allowance for Doubtful Accounts 
C)  Allowance for Doubtful Accounts and credit Accounts Receivable 
D)  Accounts Receivable and credit Allowance for Doubtful Accounts 
A)  Bad Debt Expense and credit Accounts Receivable 
B)  Bad Debt Expense and credit Allowance for Doubtful Accounts 
C)  Allowance for Doubtful Accounts and credit Accounts Receivable 
D)  Accounts Receivable and credit Allowance for Doubtful Accounts

Question 6

At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $760. During the year, $120 of previously written off accounts are reinstated and accounts totaling $740 are written-off as uncollectible. The end-of-year balance before adjustment) in Allowance for Doubtful Accounts should be

Accepted Answer

A)  $760 
B)  $120 
C)  $140 
D)  $740 
A)  $760 
B)  $120 
C)  $140 
D)  $740

Question 7

Receivables not currently collectible are reported in the investments section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

Notes or accounts receivables that result from sales transactions are often called

Accepted Answer

A)  nontrade receivables 
B)  trade receivables 
C)  merchandise receivables 
D)  sales receivables 
A)  nontrade receivables 
B)  trade receivables 
C)  merchandise receivables 
D)  sales receivables

Question 9

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

Accepted Answer

A)  affects only income statement accounts 
B)  is not an acceptable practice 
C)  affects only balance sheet accounts 
D)  affects both balance sheet and income statement accounts 
A)  affects only income statement accounts 
B)  is not an acceptable practice 
C)  affects only balance sheet accounts 
D)  affects both balance sheet and income statement accounts

Question 10

In accounting for uncollectible receivables, the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

Accepted Answer

A)  direct write-off method 
B)  percentage of sales method 
C)  analysis of receivables method 
D)  both percentage of sales and analysis of receivables methods 
A)  direct write-off method 
B)  percentage of sales method 
C)  analysis of receivables method 
D)  both percentage of sales and analysis of receivables methods

Question 11

On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the

Accepted Answer

A)  uncollectible accounts expense for the year 
B)  total of the accounts receivables written-off during the year 
C)  total estimated uncollectible accounts as of the end of the year 
D)  sum of all accounts that are past due 
A)  uncollectible accounts expense for the year 
B)  total of the accounts receivables written-off during the year 
C)  total estimated uncollectible accounts as of the end of the year 
D)  sum of all accounts that are past due

Question 12

When does an account become uncollectible?

Accepted Answer

A)  when accounts receivable is converted into notes receivable 
B)  when a discount is availed on notes receivable 
C)  there is no general rule for when an account becomes uncollectible 
D)  at the end of the fiscal year 
A)  when accounts receivable is converted into notes receivable 
B)  when a discount is availed on notes receivable 
C)  there is no general rule for when an account becomes uncollectible 
D)  at the end of the fiscal year

Question 13

Match each description to the appropriate term a-h).
-The time between the date a note is issued and the due date of the note

Accepted Answer

A) Face amount 
B) Term 
C) Interest 
D) Maturity value 
E) Dishonored note
F)Maker
G)Notes receivable
H)Interest rate 
A) Face amount 
B) Term 
C) Interest 
D) Maturity value 
E) Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Question 14

At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $3,500,000. Bad debt expense is estimated at 1/2 of 1% of sales.
Determine a) the amount of the adjusting entry for bad debt expense; b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and c) the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,...

Question 15

Discount Mart utilizes the allowance method of accounting for uncollectible receivables. On December 12 the company receives a $550 check from Chad Thomas in settlement of Thomas's $1,100 outstanding accounts receivable. Due to Thomas's failing health he is closing his company and is expecting to make no further payments to Discount Mart. Journalize this declaration.

Accepted Answer

Dec. 12 Cash 550
All

Question 16

Journalize the following transactions of Upton Drugs:
July 8 Received a $180,000, 90-day, 8% note dated July 8 from Miracle Chemical on account.
Oct. 6 The note is dishonored by Miracle Chemical.
Nov. 5 Received the amount due on the dishonored note plus interest for 30 days at 10% on the total amount charged to Miracle Chemical on Oct. 6.

Accepted Answer

July 8 Notes Receivable, Miracle Chemica

Question 17

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

Accepted Answer

A)  Uncollectible Accounts Expense 
B)  Accounts Receivable 
C)  Allowance for Doubtful Accounts 
D)  Interest Expense 
A)  Uncollectible Accounts Expense 
B)  Accounts Receivable 
C)  Allowance for Doubtful Accounts 
D)  Interest Expense

Question 18

At the end of a period before adjustment), Allowance for Doubtful Accounts has a debit balance of $500. Net credit sales for the period total $800,000. If bad debt expense is estimated at 1% of net credit sales, the amount of bad debt expense to be recorded in the adjusting entry is $8,500.

Accepted Answer

A) True 
 B)False

Question 19

Watson Company issued a 60-day, 8% note for $18,000, dated April 5, to Laker Company on account. Assume a 360-day year when calculating interest.
a) Determine the due date of the note.
b) Determine the maturity value of the note.
c) Journalize the entries to record the following:
1) Receipt of the note by the payee
2) Receipt by the payee of the amount due on the note at maturity. Round answers to the nearest $1.

Accepted Answer

a) June 4
b) $18,240
c) Note R

Question 20

For the fiscal years 1 and 2, Grange Co. reported the following:
Year Ended December 31,   
a. Compute the accounts receivable turnover for Year 2. Round to two decimals.
b. Compute the number of days' sales in receivable at the end of Year 2. Round to two decimals.

Accepted Answer

a. Accounts receivable turnover = Sales/

Exam 8: Receivables

Match each description to the appropriate term a-h). -A note that is not paid when it is due

Notes Receivable and Accounts Receivable can also be called trade receivables.

Other than Accounts Receivable and Notes Receivable, name other receivables that might be included in the general ledger.

Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write off this account, Dalton should debit

Receivables not currently collectible are reported in the investments section of the balance sheet.

Notes or accounts receivables that result from sales transactions are often called

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

In accounting for uncollectible receivables, the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the

When does an account become uncollectible?

Match each description to the appropriate term a-h). -The time between the date a note is issued and the due date of the note

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

At the end of a period before adjustment), Allowance for Doubtful Accounts has a debit balance of $500. Net credit sales for the period total $800,000. If bad debt expense is estimated at 1% of net credit sales, the amount of bad debt expense to be recorded in the adjusting entry is $8,500.

For the fiscal years 1 and 2, Grange Co. reported the following: Year Ended December 31, a. Compute the accounts receivable turnover for Year 2. Round to two decimals. b. Compute the number of days' sales in receivable at the end of Year 2. Round to two decimals.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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