Exam 4: Payment for Goods and Services: Cash and Accounts Receivable

The Allowance for uncollectible accounts ________.

The sales method for estimating bad debts is calculated using ________.

In preparing the financial statements for January,the accountant for Team Shirts has compiled the following information: accounts receivable are $5,000; the amount estimated to be uncollectible is 10% of receivables; sales for the month were $43,000; and the balance in the allowance for uncollectible accounts is a positive $100.Using the accounts receivable allowance method,the amount of bad debts expense for January is ________.

In preparing the financial statements for January,the accountant for Team Shirts has compiled the following information: accounts receivable are $5,000; the amount estimated to be uncollectible is 3% of sales for the month; sales for the month were $43,000; and the balance in the allowance for uncollectible accounts is a positive $1,000.Using the sales method,the amount of bad debts expense for January is ________.

Credit card sales benefit companies because ________.

Acme,Inc.accepted a promissory note from NadirCo,who promised to pay Acme $5,000 plus 6% interest at the end of four months.When NadirCo pays the note,Acme will receive ________.

When reporting accounts receivable,the amount reported should be ________.

Which of the following is the contra account that accompanies Accounts receivable?

The allowance for uncollectible accounts is an expense on the income statements.

Discuss the risks associated with sales,cash and accounts receivable.

The August bank statement for Midway Company showed that the bank had collected a $5,000 note receivable for the company.Midway Company has not recorded the collection.On the bank reconciliation,the $5,000 should be ________.

The allowance method provides a good match between the revenue (sale)and the bad debts expense,because the write-off is matched directly with the sale.

Part A: Justin Company has accounts receivable of $40,000.The allowance for uncollectible accounts has a balance of $200,a positive number,before adjustment.An aging schedule prepared December 31,2012 estimates that $1,100 of accounts receivable are uncollectible.Show the effect of the adjusting entry on the accounting equation,including both account titles and amounts: Part B: Jayson Company has accounts receivable of $40,000.The allowance for uncollectible accounts has a balance of ($200),a negative number,before adjustment.An aging schedule prepared December 31,2012 estimates that $1,100 of accounts receivable are uncollectible.Show the effect of the adjusting entry on the accounting equation,including both account titles and amounts: 11ed495b_c554_bd91_9429_7b00ddb87e9e_TB5475_00

The accounts receivable turnover will be worse if a company accepts major credit cards.

Discuss how the segregation of duties serves as a major control for safeguarding cash.

X Company used the following items to complete its bank reconciliation for the month of October: ∙ Deposits in transit were $2,500 ∙ Outstanding checks totaled $1,100 ∙ Bank service charges were $10 ∙ The company correctly wrote a check for $192,but mistakenly recorded the check as $129 on its books.The bank cashed the check correctly for $192. ∙ A customer's check for $50 was returned by the bank,NSF According to the bank statement,the cash balance was $10,000.How much cash should X Company show on its October 31 balance sheet?

In February, one of Team Shirts’ best customers went bankrupt owing Team Shirts $85. Team Shirts uses the sales method for estimating bad debts. February sales were $15,000. The accountant has been using 3% of sales as the estimated bad debts percentage. Before adjustment and the write-off, the balance in the allowance for uncollectible accounts was $(100). After the write-off and adjustment, the balance in the allowance for uncollectible accounts should be ________.

The direct write-off method provides a good match between the revenue (sale)and the bad debts expense,because the write-off is matched directly with the sale.

The following information is available for Ace Electronics for November: Part A: Prepare a bank reconciliation: Part B: What amount will Ace Electronics show for cash on its November 30 balance sheet? Part C: For which item(s)must Ace Electronics prepare an adjusting entry?

Team Shirts decided to accept bankcards from credit customers.Team Shirts should expect ________.