Exam 9: Accounting for Receivables

Rodgers Company lends Lanier Company $30,000 on April 1, accepting a four-month, 9% interest note. Rodgers Company prepares financial statements on April 30. What adjusting entry should be made before the financial statements can be prepared?

A 60-day note receivable dated June 13 has a maturity date of

Which of the following is not true regarding a promissory note?

Prepare the necessary journal entry for the following transaction. Francis Company sold $200,000 of its accounts receivables to a factor. The factor charges a 3% fee.

The sale of receivables by a business

Oliver Furniture factors $800,000 of receivables to Kwik Factors, Inc. Kwik Factors assesses a 2% service charge on the amount of receivables sold. Oliver Furniture factors its receivables regularly with Kwik Factors. What journal entry does Oliver make when factoring these receivables?

The method of accounting for uncollectible accounts that results in a better matching of expenses with revenues is the

The retailer considers Visa and MasterCard sales as

In order to accelerate the receipt of cash from receivables, owners may sell the receivables to another company for cash.

An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 debit balance, the adjustment to record bad debts for the period will require a

If a retailer accepts a national credit card such as Visa, the retailer must maintain detailed records of customer accounts.

The income statement approach to estimating uncollectible accounts expense is used by Landis Company. On February 28, the firm had accounts receivable in the amount of $437,000 and Allowance for Doubtful Accounts had a credit balance of $2,140 before adjustment. Net credit sales for February amounted to $3,000,000. The credit manager estimated that uncollectible accounts expense would amount to 1% of net credit sales made during February. On March 10, an accounts receivable from Kathy Brown for $6,100 was determined to be uncollectible and written off. However, on March 31, Brown received an inheritance and immediately paid her past due account in full. Instructions (a) Prepare the journal entries made by Landis Company on the following dates: 1. February 28 2. March 10 3. March 31 (b) Assume no other transactions occurred that affected the allowance account during March. Determine the balance of Allowance for Doubtful Accounts at March 31.

Record the following transactions in general journal form for Meyer Company. July 1 Received a $10,000, 8%, 3-month note, dated July 1, from Deb Gore in payment of her open account. Oct. 1 Received notification from Deb Gore that she was unable to honor her note at this time. It is expected that Gore will pay at a later date. Nov. 15 Received full payment from Deb Gore for her note receivable previously dishonored.

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a

If a company uses the allowance method to account for uncollectible accounts, the entry to write off an uncollectible account only involves balance sheet accounts.

Which of the following statements concerning receivables is incorrect?

A reasonable amount of uncollectible accounts is evidence

When an account is written off using the allowance method, accounts receivable

Which of the following are also called trade receivables?

ABC Company accepted a national credit card for a $3,000 purchase. The cost of the goods sold is $2,400. The credit card company charges a 3% fee. What is the impact of this transaction on net operating income?