Question 1

The interest on a 6%, 60-day note for $5,000 is $300.

Accepted Answer

A) True 
 B)False

Question 2

An alternative name for Bad Debt Expense is

Accepted Answer

A) collection expense 
B) credit loss expense 
C) uncollectible accounts expense 
D) deadbeat expense 
A) collection expense 
B) credit loss expense 
C) uncollectible accounts expense 
D) deadbeat expense

Question 3

The party promising to pay a note at maturity is the maker.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

Match each description to the appropriate term (a-i).
-All money claims against other entities
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

Accepted Answer

The answer of Match each description to the appropriate term...

Question 7

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

Accepted Answer

A) Uncollectible accounts are estimated to be $55,500. 
B) Uncollectible accounts are estimated to be $111,000. 
C) Bad debt expense is estimated to be $5,550. 
D) Bad debt expense is estimated to be $11,100. 
A) Uncollectible accounts are estimated to be $55,500. 
B) Uncollectible accounts are estimated to be $111,000. 
C) Bad debt expense is estimated to be $5,550. 
D) Bad debt expense is estimated to be $11,100.

Question 8

If a promissory note is dishonored, the payee should still record interest revenue.

Accepted Answer

A) True 
 B)False

Question 9

Under the direct write-off method of uncollectible accounts, if a written off account is later collected, the effect on the accounting equation is

Accepted Answer

A) an increase in assets and an increase in liabilities 
B) an increase in liabilities and a decrease in stockholders' equity (expense) 
C) a decrease in assets and an increase in stockholders' equity (expense) 
D) a decrease in assets and a decrease in stockholders' equity (expense) 
A) an increase in assets and an increase in liabilities 
B) an increase in liabilities and a decrease in stockholders' equity (expense) 
C) a decrease in assets and an increase in stockholders' equity (expense) 
D) a decrease in assets and a decrease in stockholders' equity (expense)

Question 10

Match each description to the appropriate term (a-h).
-The amount due that must be paid at the due date of a note receivable
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

The answer of Match each description to the appropriate term...

Question 11

Match each description to the appropriate term (a-d). Each term may be used more than once.
-This method focuses on the balance sheet.
A)Direct write-off method
B)Aging of receivables method
C)Percent of sales method
D)Allowance method

Accepted Answer

The answer of Match each description to the appropriate term...

Question 12

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000. Which of the following entries records the proper adjusting entry for bad debt expense?

Accepted Answer

A) debit Bad Debt Expense, $600; credit Allowance for Doubtful Accounts, $600 
B) debit Bad Debt Expense, $12,400; credit Allowance for Doubtful Accounts, $12,400 
C) debit Allowance for Doubtful Accounts, $600; credit Bad Debt Expense, $600 
D) debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600 
A) debit Bad Debt Expense, $600; credit Allowance for Doubtful Accounts, $600 
B) debit Bad Debt Expense, $12,400; credit Allowance for Doubtful Accounts, $12,400 
C) debit Allowance for Doubtful Accounts, $600; credit Bad Debt Expense, $600 
D) debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600

Question 13

Based on the following data and using a 365-day year, compute (a) the accounts receivable turnover and (b) the number of days' sales in receivables for year 2 to 2 decimal places. The industry average turnover is 20 times during the year, and the number of days' sales in receivables averages 25. (c) Comment on this situation.12/31/Year 1 accounts receivable
$ 100,000
12/31/Year 2 accounts receivable
70,000
For the year ended 12/31/Year 1, sales
1,050,000
For the year ended 12/31/Year 2, sales
1,200,000

Accepted Answer

(a)$1,200,000 ÷ [($100,000 + $

Question 14

Journalize the following transactions for the Scott Company:
November 4 Received a $6,500, 90-day, 6% note from Tim's Co.in payment of the account.December 31 Accrued interest on the Tim's Co. note.February 2 Received the amount due from Tim's Co. on the note.

Accepted Answer

@#IMG-DLM& $6,500 × 6% × 57/36

Question 15

Under the allowance method of uncollectible accounts, how does the adjusting entry to estimate the amount that will become uncollectible affect the accounting equation?

Accepted Answer

A decrease in assets

Question 16

On October 1, Black Company receives a 9% interest-bearing note from Reese Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Black should record interest revenue of

Accepted Answer

A) $0 
B) $450 
C) $900 
D) $1,800 
A) $0 
B) $450 
C) $900 
D) $1,800

Question 17

Journalize the following transactions in the accounts of Simmons Company:
Mar. 1 Received a $60,000, 60-day, 6% note dated March 1 from Bynum Company on account.Mar. 18 Received a $25,000, 60-day, 9% note dated March 18 from Solo Company on account.Apr. 30 The note dated March 1 from Bynum Company is dishonored, and the customer's account is charged for the note, including interest.May 17 The note dated March 18 from Solo Company is dishonored, and the customer's account is charged for the note, including interest.July 29 Cash is received for the amount due on the dishonored note dated March 1 plus interest for 90 days at 8% on the total amount debited to Bynum Company on April 30.Aug. 23 Wrote off against the allowance account the amount charged to Solo Company on May 17 for the dishonored note dated March 18.

Accepted Answer

The answer of Journalize the following transactions in the accounts...

Question 18

Blackwell Industries received a 120-day, 9% note for $180,000, dated August 10 from a customer on account.Required:
(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

@#IMG-DLM& (c)Dec.8
Cash
185,4

Question 19

Journalize the following transactions (assume a 360-day year when calculating interest):
Mar. 1
Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.May 30
The note of March 1 was dishonored.

Accepted Answer

The answer of Journalize the following transactions (assume a 360-day...

Question 20

Match each description to the appropriate term (a-i).
-The difference between accounts receivable and allowance for doubtful accounts
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

Accepted Answer

The answer of Match each description to the appropriate term...

Exam 8: Receivables

The interest on a 6%, 60-day note for $5,000 is $300.

An alternative name for Bad Debt Expense is

The party promising to pay a note at maturity is the maker.

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?

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). -All money claims against other entities 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

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

If a promissory note is dishonored, the payee should still record interest revenue.

Under the direct write-off method of uncollectible accounts, if a written off account is later collected, the effect on the accounting equation is

Match each description to the appropriate term (a-h). -The amount due that must be paid at the due date of a note receivable A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

Match each description to the appropriate term (a-d). Each term may be used more than once. -This method focuses on the balance sheet. A)Direct write-off method B)Aging of receivables method C)Percent of sales method D)Allowance method

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000. Which of the following entries records the proper adjusting entry for bad debt expense?

Journalize the following transactions for the Scott Company: November 4 Received a $6,500, 90-day, 6% note from Tim's Co.in payment of the account.December 31 Accrued interest on the Tim's Co. note.February 2 Received the amount due from Tim's Co. on the note.

Under the allowance method of uncollectible accounts, how does the adjusting entry to estimate the amount that will become uncollectible affect the accounting equation?

On October 1, Black Company receives a 9% interest-bearing note from Reese Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Black should record interest revenue of

Blackwell Industries received a 120-day, 9% note for $180,000, dated August 10 from a customer on account.Required: (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.

Journalize the following transactions (assume a 360-day year when calculating interest): Mar. 1 Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.May 30 The note of March 1 was dishonored.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

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