Exam 8: Receivables

At January 1,Everbright Sales has the following balances: During the year,Everbright has $150,000 of credit sales,collections of $140,000,and write-offs of $3,000.Everbright records Uncollectible accounts expense at the end of the year using the aging method.At the end of the year,the aging analysis produces a figure of $1,900,being the estimate of uncollectible accounts at end of year. -Before the year-end entry to adjust the Uncollectible accounts expense is made,what is the balance in the Uncollectible accounts expense?

A company uses the direct write-off method to account for uncollectible receivables.Uncollectible account expense will be estimated as a percentage of sales.

At January 1,Davidson Services has the following balances: During the year,Davidson has $104,000 of credit sales,collections of $100,000,and write-offs of $1,400. Davidson records Uncollectible accounts expense at the end of the year using the percent-of-sales method,and applies a rate of 1.1%,based on past history. Prior to the year-end entry to adjust the Uncollectible accounts expense,what is the balance in Accounts receivable?

A note receivable was NOT paid at maturity.Which of the following will be included in the journal entry to record the dishonoring of the note at maturity?

What is the maturity value of a 3-month,12% note for $20,000?

The ratio that indicates whether a company could pay all its current liabilities if they were to become due immediately is known as the acid-test ratio.

Archer Company and Zorro Company both have significant amounts of accounts receivable at any time,and both experience uncollectible accounts from time to time.Archer uses the aging method to account for uncollectible accounts,and Zorro uses the direct write-off method.Zorro Company's method complies with GAAP and produces a better matching of revenues and expenses than does Archer Company's method.

ABC receives a $9,000,8%,2-month note.The maturity value is:

On January 1,Wolfie's Supply sold $222 worth of goods to customer Abe Smith on account.For several months,Wolfie's tried unsuccessfully to collect from the customer,and finally decided to write off the account.(Wolfie's uses the allowance method.) Later in the year,however,the customer came in to Wolfie's,apologized for the late payment and handed over a check for $222.To properly record the recovery of an account previously written off,two journal entries are needed-one to restore the receivable previously written off,and one to record the cash receipt.Please show the second of these two entries.

The two major types of receivables are interest receivable and taxes receivable.

Archer Company and Zorro Company both have significant amounts of accounts receivable at any time,and both experience uncollectible accounts from time to time.Archer uses the percent-of-sales method to account for uncollectible accounts,and Zorro uses the direct write-off method.Which of the following statements is FALSE?

Accounts receivable has a balance of $5,000 and the Allowance for uncollectible accounts has a credit balance of $440.What is Net accounts receivable after a $160 account receivable is written off?

Martin Sales provides the following information: Net credit sales $500,000 Net accounts receivable,beginning of year 23,500 Net accounts receivable,end of year 18,000 How much is the accounts receivable turnover ratio? (Please round to the nearest whole number.)

On September 1,2013,Adirondac Marine Supplies made a loan to one of its customers.The customer signed a 6-month note for $1,500 at 10%.How much interest revenue did Adirondac earn over the life of the note?

A creditor is a person or business who:

The following information is from the 2013 records of Armadillo Camera Shop: Accounts receivable, December 31,2013 \ 20,000 (debit) Allowance for uncollectible accounts, December 31,2013 prior to adjustment 600 (debit) Net credit sales for 2013 95,000 Accounts written off as uncollectible during 2013 7,000 Cash sales during 2013 27,000 - Uncollectible accounts expense is estimated by the percent-of-sales method.Management estimates that 3% of net credit sales will be uncollectible.Which of the following will be the amount of Uncollectible accounts expense?

Which of the following is included in the category Other receivables?

The Allowance for uncollectible accounts currently has a debit balance of $200.The company's management estimates that 2.5% of net credit sales will be uncollectible.Net credit sales are $115,000.What will be the balance of the Allowance for uncollectible accounts reported on the balance sheet?

The income statement approach computes uncollectible accounts expense as a percentage of net credit sales.

Which of the following is TRUE of the proper balance sheet treatment of the Allowance for uncollectible accounts?