Question 1

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

Accepted Answer

Installmen

Question 2

Gideon Company uses the direct write-off method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins. On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is:

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Allowance for Doubtful Accounts } & 2,000 & \
\hline \text { Accounts Receivable -A. Hopkinse } & & 2,000 \
\hline \text { Accounts Receivable -A. Hopkins } & 2,000 & \
\hline \text { Cash } & & 2,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable -A. Hopkins } & 2,000 & \
\hline \text { Bad debts expense } & & 2,000 \
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable -A. Hopkins } & & 2,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable -A. Hopkins } & 2,000 & \
\hline \text { Allowance for Doubtril Accounts } & & 2,000 \
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable -A. Hopkins } & & 2,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable -A. Hopkins } & & 2,000 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 2,000 & \
\hline \text { Bad debts expense } & & 2,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Allowance for Doubtful Accounts } & 2,000 & \
\hline \text { Accounts Receivable -A. Hopkinse } & & 2,000 \
\hline \text { Accounts Receivable -A. Hopkins } & 2,000 & \
\hline \text { Cash } & & 2,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable -A. Hopkins } & 2,000 & \
\hline \text { Bad debts expense } & & 2,000 \
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable -A. Hopkins } & & 2,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable -A. Hopkins } & 2,000 & \
\hline \text { Allowance for Doubtril Accounts } & & 2,000 \
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable -A. Hopkins } & & 2,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 2,000 & \
\hline \text { Accounts Receivable -A. Hopkins } & & 2,000 \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 2,000 & \
\hline \text { Bad debts expense } & & 2,000 \
\hline
\end{array}$$

Question 3

A note that the maker is unable or refuses to pay at maturity is called a dishonored note.

Accepted Answer

A) True 
 B)False

Question 4

A company has $80,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible. The current credit balance (before adjustments) in the allowance for doubtful accounts is $1,200. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for $4,800.

Accepted Answer

A) True 
 B)False

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

When using the allowance method of accounting for uncollectible accounts, the recovery of a bad debt would be recorded as a debit to Cash and a credit to Bad Debts Expense.

Accepted Answer

A) True 
 B)False

Question 7

A receivable is an amount due from another party.

Accepted Answer

A) True 
 B)False

Question 8

A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is
$3,500.

Accepted Answer

A) True 
 B)False

Question 9

If a 60-day note receivable is dated September 22, what is the maturity date of the note?

Accepted Answer

The answer of If a 60-day note receivable is dated...

Question 10

Match between columns
                        Premises:  Amounts due from customers for credit sales.
 A process of classifying accounts receivable by how long it is past its due date for the purpose of estimating the amount of uncollectible accounts.
 A written promise to pay a specified amount of money, usually with interest, either on demand or at a definite future date.
 The expected proceeds from converting an asset into cash.
 The uncollectible accounts of credit customers who do not pay what they have promised.
 The accounting principle that requires expenses to be reported in the same period as the sales they helped to produce.
 The charge a borrower pays for using money borrowed.
 A contra asset account with a balance approximating the amount of accounts receivable expected to be uncollectible.
 The party who signs a note and promises to pay it at maturity.
 The party to whom the promissory note is payable.

Accepted Answer

The Answer of Maker of a note and Bad debts is...

Question 11

When using the allowance method of accounting for uncollectible accounts, the entry to write off Jeannie's uncollectible account is a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable-Jeannie.

Accepted Answer

A) True 
 B)False

Question 12

The ________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.

Accepted Answer

The answer of The ________ method of computing uncollectible accounts...

Question 13

The accounts receivable turnover indicates how often accounts receivable are received and collected during the period.

Accepted Answer

A) True 
 B)False

Question 14

Prepare general journal entries for the following transactions for the current year:
Apr. 25 Sold $4,500 of merchandise to Dunn Corp., receiving a 10%, 60-day. $4,500 note receivable.
June 24 The note of Dunn Corp., received on April 25 was dishonored.

Accepted Answer

None

Question 15

On October 12 of the current year, a company determined that a customer's account receivable was uncollectible and that the account should be written off. 
-Assuming the direct write-off method is used to account for bad debts, what effect will this write-off have on the company's net income and total assets?

Accepted Answer

A)  Decrease in net income; decrease in total assets. 
B)  Decrease in net income; no effect on total assets. 
C)  Increase in net income; no effect on total assets. 
D)  No effect on net income; no effect on total assets. 
E)  No effect on net income; decrease in total assets. 
A)  Decrease in net income; decrease in total assets. 
B)  Decrease in net income; no effect on total assets. 
C)  Increase in net income; no effect on total assets. 
D)  No effect on net income; no effect on total assets. 
E)  No effect on net income; decrease in total assets.

Question 16

Orman Co. sold $80,000 of accounts receivable to First Savings and incurred a 3% factoring fee. Prepare the journal entry for Orman Co. to record the sale.

Accepted Answer

\[\begin{array} { l l } 
\text

Question 17

Explain the options a company may use to convert its receivables to cash before they are due.

Accepted Answer

A company's receivables are normally con

Question 18

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Accepted Answer

A)  7.1. 
B)  9.7. 
C)  68.3. 
D)  51.7. 
E)  37.8. 
A)  7.1. 
B)  9.7. 
C)  68.3. 
D)  51.7. 
E)  37.8.

Question 19

Explain how to record the receipt (acceptance) of a note receivable.

Accepted Answer

The receipt of a note receivable is reco

Question 20

On November 1, Orpheum Company accepted a $10,000, 90-day, 8% note from a customer settle an account. What entry should be made on the November 1 to record the acceptance of the note?

Accepted Answer

A)  Debit Note Receivable $10,000; credit Cash $10,000. 
B)  Debit Note Receivable $10,200; credit Accounts Receivable $10,000; credit Interest Revenue $200. 
C)  Debit Note Receivable $10,000; credit Accounts Receivable $10,000. 
D)  Debit Sales $10,000; credit Accounts Receivable $10,000. 
E)  Debit Note Receivable $10,000; credit Sales $10,000. 
A)  Debit Note Receivable $10,000; credit Cash $10,000. 
B)  Debit Note Receivable $10,200; credit Accounts Receivable $10,000; credit Interest Revenue $200. 
C)  Debit Note Receivable $10,000; credit Accounts Receivable $10,000. 
D)  Debit Sales $10,000; credit Accounts Receivable $10,000. 
E)  Debit Note Receivable $10,000; credit Sales $10,000.

Exam 9: Accounting for Receivables

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

A note that the maker is unable or refuses to pay at maturity is called a dishonored note.

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.

When using the allowance method of accounting for uncollectible accounts, the recovery of a bad debt would be recorded as a debit to Cash and a credit to Bad Debts Expense.

A receivable is an amount due from another party.

A company using the percentage of sales method for estimating bad debts has sales of $350,000 and estimates that 1.0% of its sales are uncollectible. The estimated amount of bad debts expense is $3,500.

If a 60-day note receivable is dated September 22, what is the maturity date of the note?

When using the allowance method of accounting for uncollectible accounts, the entry to write off Jeannie's uncollectible account is a debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable-Jeannie.

The ________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.

The accounts receivable turnover indicates how often accounts receivable are received and collected during the period.

Prepare general journal entries for the following transactions for the current year: Apr. 25 Sold $4,500 of merchandise to Dunn Corp., receiving a 10%, 60-day. $4,500 note receivable. June 24 The note of Dunn Corp., received on April 25 was dishonored.

Orman Co. sold $80,000 of accounts receivable to First Savings and incurred a 3% factoring fee. Prepare the journal entry for Orman Co. to record the sale.

Explain the options a company may use to convert its receivables to cash before they are due.

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Explain how to record the receipt (acceptance) of a note receivable.

On November 1, Orpheum Company accepted a $10,000, 90-day, 8% note from a customer settle an account. What entry should be made on the November 1 to record the acceptance of the note?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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