Exam 7: Accounting for Receivables

Uniform Supply accepted a $4,800,90-day,10% note from Tracy Janitorial on October 17. -What entry should Uniform Supply make on January 15 of the next year when the note is paid? (Assume reversing entries are not made.)(Use 360 days a year.)

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:

A company had net sales of $550,000 and an average accounts receivable of $110,000.Its accounts receivable turnover equals 5.0.

________ refers to the expected proceeds from converting an asset into cash.

At the end of the current year,using the aging of receivable method,management estimated that $15,750 of the accounts receivable balance would be uncollectible.Prior to any year-end adjustments,the Allowance for Doubtful Accounts had a credit balance of $375.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

The materiality constraint,as applied to bad debts:

The percent of sales method for estimating bad debts uses only income statement account balances to estimate bad debts.

A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: Prepare the adjusting entry to estimate bad debts assuming an aging analysis estimates that 8% of the outstanding accounts receivable will be uncollectible.

Which of the following is not true regarding a bank (or third party)credit card expense?

A supplementary record created to maintain a separate account for each customer is called the ________.

Jax Recording Studio purchased $7,800 in electronic components from Music World.Jax signed a 60-day,8% promissory note for $7,800.Music World's journal entry to record the collection on the maturity date is:

A company has the following unadjusted account balances at December 31,of the current year; Accounts Receivable of $185,700 and Allowance for Doubtful Accounts of $1,600 (credit balance).The company uses the aging of accounts receivable to estimate its bad debts.The following aging schedule reflects its accounts receivable at the current year-end: 1.Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31,of the current year,balance sheet. 2.Prepare the adjusting journal entry to record bad debts expense for the current year.

The practice of placing dishonored notes receivable into accounts receivable keeps only notes that have not yet matured in the Notes Receivable account.

A ________ is a signed agreement to pay a specified amount of money either on demand or at a definite future date.

Since pledged accounts receivables only serve as collateral for a loan and are not sold,it is not necessary to disclose the pledging.

Owens Company uses the direct write-off method of accounting for uncollectible accounts receivable.On December 6,Year 1,Owens sold $6,300 of merchandise to the Valley Company.On August 8,Year 2,after numerous attempts to collect the account,Owens determined that the account of the Valley Company was uncollectible. a.Prepare the journal entry required to record the transactions on August 8. b.Assuming that the $6,300 is material,explain how the direct write-off method violates the expense recognition principle in this case.

________ are amounts owed by customers from credit sales where payment is required in periodic amounts over an extended time period.

The percent of sales method for estimating bad debts assumes that a given percent of a company's credit sales for the period are uncollectible.

Craigmont uses the allowance method to account for uncollectible accounts.Its year-end unadjusted trial balance shows Accounts Receivable of $104,500,allowance for doubtful accounts of $665 (credit)and sales of $925,000.If uncollectible accounts are estimated to be 0.5% of sales,what is the amount of the bad debts expense adjusting entry?