Exam 8: Receivables

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.

Determine the due date and the amount of interest due at maturity on the following notes:

If the maker of a note fails to pay the debt on the due date, the note is said to be dishonored.

When using the analysis of receivables method for estimating uncollectible receivables, the amount computed in the analysis is usually the amount that would be recorded in the end-of-period adjusting entry.

Two methods of accounting for uncollectible accounts are the

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-h). -A formal, written instrument of credit that represents amounts due from customers A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

No allowance account is used with the direct write-off method.

Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. Harper Company prepares financial statements on March 31. What adjusting entry should be made before the financial statements can be prepared?

Match each description to the appropriate term (a-h). -A note that is not paid when it is due A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

The number of days' sales in receivables is an estimate of the length of time the accounts receivable have been outstanding.

Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $19,700. Which of the following entries records the proper adjustment for bad debt expense?

Match each description to the appropriate term (a-i). -A receivable created from selling merchandise or services on account 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 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

At the end of a period (before adjustment), Allowance for Doubtful Accounts has a credit balance of $5,000. The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000. The amount to be recorded in the adjusting entry for the Bad Debt Expense is $45,000.

The balance in Allowance for Doubtful Accounts at the end of the year includes the total of all accounts written off since the beginning of the year.

Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

On the basis of the following data related to assets due within one year for Webb Co., prepare a partial balance sheet in good form at December 31. Show total current assets.

When a note is received from a customer on account, it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

Receivables that are expected to be collected in cash in eighteen months or less are reported in the current asset section of the balance sheet.