Question 1

The amount of Accounts Receivable a company estimates it will collect is the:

Accepted Answer

A) Gross Accounts Receivable. 
B) Bad Debts Allowance. 
C) Net Realizable Value. 
D) Accounts Receivable Allowance. 
A) Gross Accounts Receivable. 
B) Bad Debts Allowance. 
C) Net Realizable Value. 
D) Accounts Receivable Allowance.

Question 2

Using the balance sheet approach, the balance in Allowance for Doubtful Accounts is taken into consideration when finding the adjustment.

Accepted Answer

A) True 
 B)False

Question 3

The general ledger controlling account for Accounts Receivable shows a debit balance of $120,000. The Allowance for Doubtful Accounts has a credit balance of $5,000. An aging report of accounts receivable accounts resulted in an estimate of $23,000 of uncollectible accounts receivable. Calculate the amount of the adjustment using the balance sheet approach.
Amount of the adjustment ________

Accepted Answer

The answer of The general ledger controlling account for Accounts...

Question 4

The normal balance of the Bad Debts Expense account is a debit.

Accepted Answer

A) True 
 B)False

Question 5

Gross Accounts Receivable is $12,000. Allowance for Doubtful Accounts has a credit balance of $600. Net sales for the year are $100,000. In the past, 2% of sales had proved uncollectible, and an aging of the receivables indicates $1,900 as uncollectible. What would be the adjusted balance of the Allowance account under the balance sheet approach?

Accepted Answer

A) $2,000 
B) $1,400 
C) $2,500 
D) $1,900 
A) $2,000 
B) $1,400 
C) $2,500 
D) $1,900

Question 6

Under the accrual method of accounting, the allowance method is generally required for financial reporting purposes.

Accepted Answer

A) True 
 B)False

Question 7

The journal entry to write off an account judged to be uncollectible under the allowance would include a debit to:

Accepted Answer

A) Sales. 
B) Accounts Receivable. 
C) Allowance for Doubtful Accounts. 
D) Bad Debts Expense. 
A) Sales. 
B) Accounts Receivable. 
C) Allowance for Doubtful Accounts. 
D) Bad Debts Expense.

Question 8

What would be the basis for the following entry on a firm's records?

Accepted Answer

A) The firm is using the direct write-off method. 
B) The firm is writing off an uncollectible account. 
C) The firm is not using the allowance method for writing off accounts. 
D) All of these answers are correct. 
A) The firm is using the direct write-off method. 
B) The firm is writing off an uncollectible account. 
C) The firm is not using the allowance method for writing off accounts. 
D) All of these answers are correct.

Question 9

Colleen's account was written off for $800. She received an inheritance from her uncle and wants to clear her account. The entry to record this is to:

Accepted Answer

A) debit Cash and credit Accounts Receivable/Maggie. 
B) debit Allowances for Doubtful Accounts, credit Accounts Receivable/Maggie, debit Cash, and credit Accounts Receivable/Maggie. 
C) debit Accounts Receivable/Maggie, credit Allowance for Doubtful Accounts, debit Cash, and credit Accounts Receivable/Maggie. 
D) debit Accounts Receivable/Maggie, credit Allowance for Doubtful Accounts, debit Accounts Receivable/Maggie, and credit Cash. 
A) debit Cash and credit Accounts Receivable/Maggie. 
B) debit Allowances for Doubtful Accounts, credit Accounts Receivable/Maggie, debit Cash, and credit Accounts Receivable/Maggie. 
C) debit Accounts Receivable/Maggie, credit Allowance for Doubtful Accounts, debit Cash, and credit Accounts Receivable/Maggie. 
D) debit Accounts Receivable/Maggie, credit Allowance for Doubtful Accounts, debit Accounts Receivable/Maggie, and credit Cash.

Question 10

The Allowance for Doubtful Accounts is shown on the balance sheet as a contra-asset.

Accepted Answer

A) True 
 B)False

Question 11

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 12

The balance in the Allowance for Doubtful Accounts is considered under which of the following approaches?

Accepted Answer

A) Balance sheet approach 
B) Income statement approach 
C) Direct write-off approach 
D) All three approaches 
A) Balance sheet approach 
B) Income statement approach 
C) Direct write-off approach 
D) All three approaches

Question 13

Sylvia's, Inc., decreases Allowance for Doubtful Accounts $700 at year-end. As a result:

Accepted Answer

A) net assets decrease. 
B) net income is unchanged. 
C) net assets increase. 
D) net realizable value assets decreases. 
A) net assets decrease. 
B) net income is unchanged. 
C) net assets increase. 
D) net realizable value assets decreases.

Question 14

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 15

Which account is classified as a contra-asset?

Accepted Answer

A) Bad Debts Expense 
B) Accounts Receivable 
C) Sales Returns and Allowances 
D) Allowance for Doubtful Accounts 
A) Bad Debts Expense 
B) Accounts Receivable 
C) Sales Returns and Allowances 
D) Allowance for Doubtful Accounts

Question 16

Determine the amount of the adjustment for bad debts given:
Bad debts are estimated to be 8% of sales
   $ ________

Accepted Answer

The answer of Determine the amount of the adjustment for...

Question 17

Under the allowance method, Bad Debt Expense is recorded:

Accepted Answer

A) as an estimate. 
B) when an individual account is written off. 
C) several times during the year as needed. 
D) None of these answers is correct. 
A) as an estimate. 
B) when an individual account is written off. 
C) several times during the year as needed. 
D) None of these answers is correct.

Question 18

When an account receivable is written off as uncollectible, it decreases Bad Debts Expense.

Accepted Answer

A) True 
 B)False

Question 19

Use the account code numbers to identify how the following transactions would be journalized.
  
-Collected from a customer previously written off under the direct write off method.
Debit account ________ Credit account ________

Accepted Answer

The answer of Use the account code numbers to identify...

Question 20

After the accounts are adjusted and closed at the end of the year, Accounts Receivable has a normal balance of $540,000 and Allowance for Doubtful Accounts has a normal balance of $25,000. What is the net realizable value of the Accounts Receivable?

Accepted Answer

A) $540,000 
B) $565,000 
C) $515,000 
D) The amount cannot be determined from the given information. 
A) $540,000 
B) $565,000 
C) $515,000 
D) The amount cannot be determined from the given information.

Exam 13: Accounting for Bad Debts

The amount of Accounts Receivable a company estimates it will collect is the:

Using the balance sheet approach, the balance in Allowance for Doubtful Accounts is taken into consideration when finding the adjustment.

The normal balance of the Bad Debts Expense account is a debit.

Under the accrual method of accounting, the allowance method is generally required for financial reporting purposes.

The journal entry to write off an account judged to be uncollectible under the allowance would include a debit to:

What would be the basis for the following entry on a firm's records?

Colleen's account was written off for $800. She received an inheritance from her uncle and wants to clear her account. The entry to record this is to:

The Allowance for Doubtful Accounts is shown on the balance sheet as a contra-asset.

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature. -

The balance in the Allowance for Doubtful Accounts is considered under which of the following approaches?

Sylvia's, Inc., decreases Allowance for Doubtful Accounts $700 at year-end. As a result:

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature. -

Which account is classified as a contra-asset?

Determine the amount of the adjustment for bad debts given: Bad debts are estimated to be 8% of sales $ ________

Under the allowance method, Bad Debt Expense is recorded:

When an account receivable is written off as uncollectible, it decreases Bad Debts Expense.

Use the account code numbers to identify how the following transactions would be journalized. -Collected from a customer previously written off under the direct write off method. Debit account ________ Credit account ________

After the accounts are adjusted and closed at the end of the year, Accounts Receivable has a normal balance of $540,000 and Allowance for Doubtful Accounts has a normal balance of $25,000. What is the net realizable value of the Accounts Receivable?

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes: the Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Use the account code numbers to identify how the following transactions would be journalized. -Collected from a customer previously written off under the direct write off method. Debit account Credit account