Question 1

Selling receivables is called

Accepted Answer

A)  factoring 
B)  sales revenue 
C)  a factor 
D)  sold receivables 
A)  factoring 
B)  sales revenue 
C)  a factor 
D)  sold receivables

Question 2

At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000.
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 3

The receivable that is usually evidenced by a formal, written instrument of credit is an)

Accepted Answer

A)  trade receivable 
B)  note receivable 
C)  accounts receivable 
D)  income tax receivable 
A)  trade receivable 
B)  note receivable 
C)  accounts receivable 
D)  income tax receivable

Question 4

When a company uses the allowance method of accounting for uncollectible receivables, which entry would not be found in the general journal?

Accepted Answer

A)  Bad Debt Expense Allowance for Doubtful Accounts
500
500 
B)  Bad Debt Expense Accounts Receivable, Bob Smith
500
500 
C)  Cash 300
Allowance for Doubtful Accounts Accounts Receivable, Bob Smith
200
500 
D)  Cash Accounts Receivable, Bob Smith
500
500 
A)  Bad Debt Expense Allowance for Doubtful Accounts
500
500 
B)  Bad Debt Expense Accounts Receivable, Bob Smith
500
500 
C)  Cash 300
Allowance for Doubtful Accounts Accounts Receivable, Bob Smith
200
500 
D)  Cash Accounts Receivable, Bob Smith
500
500

Question 5

Match each description to the appropriate term a-d). Each term may be used more than once.
-With this method, there is no allowance account.

Accepted Answer

A) Direct write-off method 
B) Aging of receivables method 
C) Percent of sales method 
D) Allowance method 
A) Direct write-off method 
B) Aging of receivables method 
C) Percent of sales method 
D) Allowance method

Question 6

For each of the following notes receivables held by Winter Company, determine the interest revenue to be reported on the income statements. Round answers to nearest whole dollar.

Accepted Answer

@#IMG-DLM& *$15,000 × 0.07 × 1

Question 7

Match each description to the appropriate term a-i).
-A list of customer accounts sorted by age classes

Accepted Answer

A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging report 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Factoring 
A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging report 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Factoring

Question 8

At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000. Determine the net realizable value of accounts receivable after adjustment. Hint: Determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance of Doubtful Accounts.)

Accepted Answer

A)  $550,000 
B)  $544,500 
C)  $525,000 
D)  $575,000 
A)  $550,000 
B)  $544,500 
C)  $525,000 
D)  $575,000

Question 9

A partially competed aging of receivables schedule for Lindy Designs' is shown below. Calculate the amount that is estimated to be uncollectible.
a) Determine the amount estimated to be uncollectible by completing the aging of receivables schedule. Round calculations to the nearest dollar.   b) If the Allowance for Doubtful Accounts has a credit balance of $9,700, record the adjusting entry for
the bad debt expense for the year.
c) If the Allowance for Doubtful Accounts has a debit balance of $9,700, record the adjusting entry for the bad debt expense for the year.

Accepted Answer

a) @#IMG-DLM& b) Dec. 31 Bad Debt Expens

Question 10

Discuss the 1) focus and 2) financial statement emphasis of a) the percent of sales and b) the analysis of receivables methods of estimating bad debts.

Accepted Answer

a) Bad debt expense is the focus of the

Question 11

The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for the bad debt expense when using which of the following methods?

Accepted Answer

A)  allowance method based on aging the receivables 
B)  direct write-off method 
C)  accrual method 
D)  declining value method 
A)  allowance method based on aging the receivables 
B)  direct write-off method 
C)  accrual method 
D)  declining value method

Question 12

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Accepted Answer

A)  $40,000 
B)  $40,400 
C)  $43,600 
D)  $44,000 
A)  $40,000 
B)  $40,400 
C)  $43,600 
D)  $44,000

Question 13

Match each description to the appropriate term a-i).
-A contra asset that represents the amount of estimated uncollectible receivables

Accepted Answer

A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging report 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Factoring 
A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging report 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Factoring

Question 14

A 60-day, 12% note for $7,000, dated April 15, is received from a customer on account. The face value of the note is

Accepted Answer

A)  $6,860 
B)  $7,140 
C)  $7,840 
D)  $7,000 
A)  $6,860 
B)  $7,140 
C)  $7,840 
D)  $7,000

Question 15

The due date of a 60-day note dated July 10 is September 10.

Accepted Answer

A) True 
 B)False

Question 16

For each of the following notes receivables held by Christensen Company determine the interest revenue to be reported on the income statements for the year ended December 31. Round answers to nearest whole dollar.

Accepted Answer

The answer of For each of the following notes receivables...

Question 17

The two methods of accounting for uncollectible receivables are the allowance method and the

Accepted Answer

A)  equity method 
B)  direct write-off method 
C)  interest method 
D)  cost method 
A)  equity method 
B)  direct write-off method 
C)  interest method 
D)  cost method

Question 18

Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year before adjustment). The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $31,900. Which of the following adjusting entries is needed to record the Bad Debt Expense for the year?

Accepted Answer

A)  debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200 
B)  debit Allowance for Doubtful Accounts, $34,200; credit Bad Debt Expense, $34,200 
C)  debit Allowance for Doubtful Accounts, $29,600; credit Bad Debt Expense, $29,600 
D)  debit Bad Debt Expense, $29,600; credit Allowance for Doubtful Accounts, $29,600 
A)  debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200 
B)  debit Allowance for Doubtful Accounts, $34,200; credit Bad Debt Expense, $34,200 
C)  debit Allowance for Doubtful Accounts, $29,600; credit Bad Debt Expense, $29,600 
D)  debit Bad Debt Expense, $29,600; credit Allowance for Doubtful Accounts, $29,600

Question 19

Sunshine Service Center received a 120-day, 6% note for $40,000, dated April 12 from a customer on account.
a. Determine the due date of the note.
b. Determine the maturity value of the note.
c. Journalize the entry to record the receipt of the payment of the note at maturity.

Accepted Answer

a. August 10 determined as fol

Question 20

The operating expense recorded from uncollectible receivables can be called all of the following except

Accepted Answer

A)  accounts receivable 
B)  bad debt expense 
C)  doubtful accounts expense 
D)  uncollectible accounts expense 
A)  accounts receivable 
B)  bad debt expense 
C)  doubtful accounts expense 
D)  uncollectible accounts expense

Exam 8: Receivables

Selling receivables is called

The receivable that is usually evidenced by a formal, written instrument of credit is an)

When a company uses the allowance method of accounting for uncollectible receivables, which entry would not be found in the general journal?

Match each description to the appropriate term a-d). Each term may be used more than once. -With this method, there is no allowance account.

For each of the following notes receivables held by Winter Company, determine the interest revenue to be reported on the income statements. Round answers to nearest whole dollar.

Match each description to the appropriate term a-i). -A list of customer accounts sorted by age classes

Discuss the 1) focus and 2) financial statement emphasis of a) the percent of sales and b) the analysis of receivables methods of estimating bad debts.

The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for the bad debt expense when using which of the following methods?

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Match each description to the appropriate term a-i). -A contra asset that represents the amount of estimated uncollectible receivables

A 60-day, 12% note for $7,000, dated April 15, is received from a customer on account. The face value of the note is

The due date of a 60-day note dated July 10 is September 10.

For each of the following notes receivables held by Christensen Company determine the interest revenue to be reported on the income statements for the year ended December 31. Round answers to nearest whole dollar.

The two methods of accounting for uncollectible receivables are the allowance method and the

Sunshine Service Center received a 120-day, 6% note for $40,000, dated April 12 from a customer on account. a. Determine the due date of the note. b. Determine the maturity value of the note. c. Journalize the entry to record the receipt of the payment of the note at maturity.

The operating expense recorded from uncollectible receivables can be called all of the following except

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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