Question 1

When a note is written to settle an open account,no entry is necessary.

Accepted Answer

A) True 
 B)False

Question 2

If the allowance method of accounting for uncollectible receivables is used,what general ledger account is debited to write off a customer's account as uncollectible?

Accepted Answer

A)  Uncollectible Accounts Expense 
B)  Allowance for Doubtful Accounts 
C)  Accounts Receivable 
D)  Interest Expense 
A)  Uncollectible Accounts Expense 
B)  Allowance for Doubtful Accounts 
C)  Accounts Receivable 
D)  Interest Expense

Question 3

The Lowery Co.uses the direct write-off method of accounting for uncollectible accounts receivable.Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible.The entry to write off this account would be which of the following? ​

Accepted Answer

A)  debit Allowance for Doubtful Accounts; credit Accounts Receivable 
B)  debit Sales; credit Accounts Receivable 
C)  debit Bad Debt Expense; credit Allowance for Doubtful Accounts 
D)  debit Bad Debt Expense; credit Accounts Receivable 
A)  debit Allowance for Doubtful Accounts; credit Accounts Receivable 
B)  debit Sales; credit Accounts Receivable 
C)  debit Bad Debt Expense; credit Allowance for Doubtful Accounts 
D)  debit Bad Debt Expense; credit Accounts Receivable

Question 4

​Small companies can use either the direct write-off method or the allowance method.

Accepted Answer

A) True 
 B)False

Question 5

Of the two methods of accounting for uncollectible receivables,the allowance method provides in advance for uncollectible receivables.

Accepted Answer

A) True 
 B)False

Question 6

An aging of a company's accounts receivable indicates that the estimate of the uncollectible accounts totals $4,000.If Allowance for Doubtful Accounts has a $800 credit balance,the adjustment to record the bad debt expense for the period will require a ​

Accepted Answer

A)  debit to Allowance for Doubtful Accounts for $3,200 
B)  debit to Bad Debt Expense for $3,200 
C)  debit to Allowance for Doubtful Accounts for $4,000 
D)  credit to Allowance for Doubtful Accounts for $4,000 
A)  debit to Allowance for Doubtful Accounts for $3,200 
B)  debit to Bad Debt Expense for $3,200 
C)  debit to Allowance for Doubtful Accounts for $4,000 
D)  credit to Allowance for Doubtful Accounts for $4,000

Question 7

When referring to a note receivable or promissory note

Accepted Answer

A)  the maker is the party to whom the money is due 
B)  the note is not considered a formal credit instrument 
C)  the note cannot be factored to another party 
D)  the note may be used to settle an accounts receivable 
A)  the maker is the party to whom the money is due 
B)  the note is not considered a formal credit instrument 
C)  the note cannot be factored to another party 
D)  the note may be used to settle an accounts receivable

Question 8

The direct write-off method records bad debt expense in the year the specific account receivable is determined to be uncollectible.

Accepted Answer

A) True 
 B)False

Question 9

Blackwell Industries received a 120-day,9% note for $180,000,dated August 10 from a customer on account.
Required:

Accepted Answer

The answer of Blackwell Industries received a 120-day,9% note for...

Question 10

Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment),and an analysis of customers' accounts indicates uncollectible receivables of $19,700.Which of the following entries records the proper adjustment for bad debt expense? ​

Accepted Answer

A)  debit Allowance for Doubtful Accounts,$17,600; credit Bad Debt Expense,$17,600 
B)  debit Allowance for Doubtful Accounts,$21,800; credit Bad Debt Expense,$21,800 
C)  debit Bad Debt Expense,$21,800; credit Allowance for Doubtful Accounts,$21,800 
D)  debit Bad Debt Expense,$17,600; credit Allowance for Doubtful Accounts,$17,600 
A)  debit Allowance for Doubtful Accounts,$17,600; credit Bad Debt Expense,$17,600 
B)  debit Allowance for Doubtful Accounts,$21,800; credit Bad Debt Expense,$21,800 
C)  debit Bad Debt Expense,$21,800; credit Allowance for Doubtful Accounts,$21,800 
D)  debit Bad Debt Expense,$17,600; credit Allowance for Doubtful Accounts,$17,600

Question 11

Miles uses the allowance method and wrote off the account of James.Miles then received $559 as partial payment on the account of James.The journal entry to record the initial write-off includes ​a

Accepted Answer

A)  ​debit to Allowance for Doubtful Accounts 
B)  ​credit to Cash 
C)  ​debit to Accounts Receivable,James 
D)  ​credit to Bad Debt Expense 
A)  ​debit to Allowance for Doubtful Accounts 
B)  ​credit to Cash 
C)  ​debit to Accounts Receivable,James 
D)  ​credit to Bad Debt Expense

Question 12

A $6,000,60-day,12% note recorded on November 21 is not paid by the maker at maturity.The journal entry to recognize this event is

Accepted Answer

A)  debit Cash,$6,120; credit Notes Receivable,$6,120 
B)  debit Notes Receivable,$6,120; credit Accounts Receivable,$6,000; credit Interest Receivable,$120 
C)  debit Notes Receivable,$6,060; credit Accounts Receivable,$6,060 
D)  debit Accounts Receivable,$6,120; credit Notes Receivable,$6,000; credit Interest Revenue,$120 
A)  debit Cash,$6,120; credit Notes Receivable,$6,120 
B)  debit Notes Receivable,$6,120; credit Accounts Receivable,$6,000; credit Interest Receivable,$120 
C)  debit Notes Receivable,$6,060; credit Accounts Receivable,$6,060 
D)  debit Accounts Receivable,$6,120; credit Notes Receivable,$6,000; credit Interest Revenue,$120

Question 13

The balance of Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

Financial statement data for the years ended December 31 for Parker Corporation are as follows:
​
Current Year Prior Year
Sales $2,595,600 $2,409,500
Accounts receivable:
Beginning of the year $390,000 $400,000
End of the year 434,000 390,000
​
​​(a)Determine the accounts receivable turnover for each year.Round to one decimal place.
(b)Determine the number of days' sales in receivables for each year.Round to whole days.
(c)Does the change in accounts receivable turnover and number of days' sales in receivables from
the first year to the second year indicate a favorable or unfavorable trend?

Accepted Answer

(a)Accounts receivable turnover:Current

Question 15

At the end of the current year,Accounts Receivable has a balance of $750,000; Allowance for Doubtful Accounts has a debit balance of $6,200; and sales for the year total $3,500,000.Bad debt expense is estimated at 1 / 2 of 1% of sales.
​
Determine (a)the amount of the adjusting entry for bad debt expense; (b)the adjusted balances of Accounts Receivable,Allowance for Doubtful Accounts,and Bad Debt Expense; and (c)the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,Accounts...

Question 16

After the accounts are adjusted and closed at the end of the fiscal year,Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000.What is the net realizable value of the accounts receivable?

Accepted Answer

A)  $51,000 
B)  $289,000 
C)  $340,000 
D)  $391,000 
A)  $51,000 
B)  $289,000 
C)  $340,000 
D)  $391,000

Question 17

The due date of a 60-day note dated July 10 is September 10.

Accepted Answer

A) True 
 B)False

Question 18

If the allowance method of accounting for uncollectible receivables is used,what general ledger account is credited to write off a customer's account as uncollectible?

Accepted Answer

A)  Uncollectible Accounts Expense 
B)  Accounts Receivable 
C)  Allowance for Doubtful Accounts 
D)  Interest Expense 
A)  Uncollectible Accounts Expense 
B)  Accounts Receivable 
C)  Allowance for Doubtful Accounts 
D)  Interest Expense

Question 19

What is the type of account and normal balance of Allowance for Doubtful Accounts?

Accepted Answer

A)  contra asset,credit 
B)  asset,debit 
C)  asset,credit 
D)  contra asset,debit 
A)  contra asset,credit 
B)  asset,debit 
C)  asset,credit 
D)  contra asset,debit

Question 20

Journalize the following transactions (assume a 360-day year when calculating interest):

Accepted Answer

The answer of Journalize the following transactions (assume a 360-day...

Exam 8: Receivables

When a note is written to settle an open account,no entry is necessary.

If the allowance method of accounting for uncollectible receivables is used,what general ledger account is debited to write off a customer's account as uncollectible?

The Lowery Co.uses the direct write-off method of accounting for uncollectible accounts receivable.Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible.The entry to write off this account would be which of the following? ​

​Small companies can use either the direct write-off method or the allowance method.

Of the two methods of accounting for uncollectible receivables,the allowance method provides in advance for uncollectible receivables.

An aging of a company's accounts receivable indicates that the estimate of the uncollectible accounts totals $4,000.If Allowance for Doubtful Accounts has a $800 credit balance,the adjustment to record the bad debt expense for the period will require a ​

When referring to a note receivable or promissory note

The direct write-off method records bad debt expense in the year the specific account receivable is determined to be uncollectible.

Blackwell Industries received a 120-day,9% note for $180,000,dated August 10 from a customer on account. Required:

Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment),and an analysis of customers' accounts indicates uncollectible receivables of $19,700.Which of the following entries records the proper adjustment for bad debt expense? ​

Miles uses the allowance method and wrote off the account of James.Miles then received $559 as partial payment on the account of James.The journal entry to record the initial write-off includes ​a

A $6,000,60-day,12% note recorded on November 21 is not paid by the maker at maturity.The journal entry to recognize this event is

The balance of Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

After the accounts are adjusted and closed at the end of the fiscal year,Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000.What is the net realizable value of the accounts receivable?

The due date of a 60-day note dated July 10 is September 10.

If the allowance method of accounting for uncollectible receivables is used,what general ledger account is credited to write off a customer's account as uncollectible?

What is the type of account and normal balance of Allowance for Doubtful Accounts?

Journalize the following transactions (assume a 360-day year when calculating interest):

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Long-Term Assets: Fixed and Intangible

Liabilities: Current,installment Notes,and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

The Lowery Co.uses the direct write-off method of accounting for uncollectible accounts receivable.Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible.The entry to write off this account would be which of the following?

Small companies can use either the direct write-off method or the allowance method.

An aging of a company's accounts receivable indicates that the estimate of the uncollectible accounts totals $4,000.If Allowance for Doubtful Accounts has a $800 credit balance,the adjustment to record the bad debt expense for the period will require a

Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment),and an analysis of customers' accounts indicates uncollectible receivables of $19,700.Which of the following entries records the proper adjustment for bad debt expense?

Miles uses the allowance method and wrote off the account of James.Miles then received $559 as partial payment on the account of James.The journal entry to record the initial write-off includes a