Question 1

The term "receivables" includes all

Accepted Answer

A)  money claims against other entities 
B)  merchandise to be collected from individuals or companies 
C)  cash to be paid to creditors 
D)  cash to be paid to debtors 
A)  money claims against other entities 
B)  merchandise to be collected from individuals or companies 
C)  cash to be paid to creditors 
D)  cash to be paid to debtors

Question 2

When a note is received from a customer on account,it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 3

Other receivables include nontrade receivables such as loans to company officers.

Accepted Answer

A) True 
 B)False

Question 4

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

Accepted Answer

A) True 
 B)False

Question 5

At the end of the current year,Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000.An analysis of receivables estimates uncollectible receivables as $25,000. ​
Determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance for Doubtful Accounts,respectively.
​

Accepted Answer

A)  $19,500 and $25,000 
B)  $30,500 and $525,000 
C)  $19,500 and $525,000 
D)  $30,500 and $25,000 
A)  $19,500 and $25,000 
B)  $30,500 and $525,000 
C)  $19,500 and $525,000 
D)  $30,500 and $25,000

Question 6

Notes or accounts receivable that result from sales transactions are often called

Accepted Answer

A)  nontrade receivables 
B)  trade receivables 
C)  merchandise receivables 
D)  sales receivables 
A)  nontrade receivables 
B)  trade receivables 
C)  merchandise receivables 
D)  sales receivables

Question 7

When companies sell their receivables to other companies,the transaction is called factoring.

Accepted Answer

A) True 
 B)False

Question 8

The difference between the balance in Accounts Receivable and the balance in the Allowance for Doubtful Accounts is called the net realizable value of the receivables.

Accepted Answer

A) True 
 B)False

Question 9

On August 1,Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company.The terms of the note were $20,000 face value and 6% interest.On October 30,the journal entry to record the collection of the note should include a

Accepted Answer

A)  credit to Notes Receivable for $20,300 
B)  debit to Interest Receivable for $300 
C)  credit to Interest Revenue for $300 
D)  debit to Notes Receivable for $20,000 
A)  credit to Notes Receivable for $20,300 
B)  debit to Interest Receivable for $300 
C)  credit to Interest Revenue for $300 
D)  debit to Notes Receivable for $20,000

Question 10

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

Accepted Answer

A) True 
 B)False

Question 11

Trade receivables occur when two companies trade or exchange notes receivable.

Accepted Answer

A) True 
 B)False

Question 12

The interest on a 6%,60-day note for $5,000 is $300.

Accepted Answer

A) True 
 B)False

Question 13

Paper Company receives a $6,000,3-month,6% promissory note from Dame Company in settlement of an open accounts receivable.What entry will Paper Company make upon receiving the note?

Accepted Answer

A)  Notes Receivable-Dame Company 6,000
Accounts Receivable-Dame Company 6,000 
B)  Notes Receivable-Dame Company 6,090
Accounts Receivable-Dame Company 6,090 
C)  Notes Receivable-Dame Company 6,090
Accounts Receivable-Dame Company 6,000
Interest Revenue 90 
D)  Notes Receivable-Dame Company 6,000
Interest Revenue 90
Accounts Receivable-Dame Company 6,000
Interest Receivable 90 
A)  Notes Receivable-Dame Company 6,000
Accounts Receivable-Dame Company 6,000 
B)  Notes Receivable-Dame Company 6,090
Accounts Receivable-Dame Company 6,090 
C)  Notes Receivable-Dame Company 6,090
Accounts Receivable-Dame Company 6,000
Interest Revenue 90 
D)  Notes Receivable-Dame Company 6,000
Interest Revenue 90
Accounts Receivable-Dame Company 6,000
Interest Receivable 90

Question 14

The journal entry to record a note received from a customer to replace an account is

Accepted Answer

A)  debit Notes Receivable; credit Accounts Receivable 
B)  debit Accounts Receivable; credit Notes Receivable 
C)  debit Cash; credit Notes Receivable 
D)  debit Notes Receivable; credit Notes Payable 
A)  debit Notes Receivable; credit Accounts Receivable 
B)  debit Accounts Receivable; credit Notes Receivable 
C)  debit Cash; credit Notes Receivable 
D)  debit Notes Receivable; credit Notes Payable

Question 15

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment),and bad debt expense is estimated at 3% of credit sales.If credit sales are $300,000,the amount of the adjusting entry to record the estimated uncollectible accounts receivable is

Accepted Answer

A)  $8,500 
B)  $9,500 
C)  $9,000 
D)  Cannot be determined 
A)  $8,500 
B)  $9,500 
C)  $9,000 
D)  Cannot be determined

Question 16

Journalize the following transactions for Lucite Company.
November 14 Received a $4,800.00,90-day,9% note from Alan Albertson in payment of his account.
December 31 Accrued interest on the Albertson note.
February 12 Received the amount due from Albertson on his note.

Accepted Answer

The answer of Journalize the following transactions for Lucite Company.
November...

Question 17

If the direct write-off 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)  Bad Debt Expense 
B)  Accounts Receivable 
C)  Allowance for Doubtful Accounts 
D)  Interest Expense 
A)  Bad Debt Expense 
B)  Accounts Receivable 
C)  Allowance for Doubtful Accounts 
D)  Interest Expense

Question 18

To record estimated uncollectible receivables using the allowance method,the adjusting entry would be a

Accepted Answer

A)  debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts 
B)  debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts 
C)  debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable 
D)  debit to Loss on Credit Sales and a credit to Accounts Receivable 
A)  debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts 
B)  debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts 
C)  debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable 
D)  debit to Loss on Credit Sales and a credit to Accounts Receivable

Question 19

You have just received notice that a customer of yours with an Account Receivable balance of $100 has gone bankrupt and will not make any future payments.Assuming you use the allowance method,the entry you make is to ​

Accepted Answer

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

Question 20

The accounts receivable turnover ratio is computed by dividing total gross sales by the average net receivables during the year.

Accepted Answer

A) True 
 B)False

Exam 8: Receivables

The term "receivables" includes all

When a note is received from a customer on account,it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

Other receivables include nontrade receivables such as loans to company officers.

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

Notes or accounts receivable that result from sales transactions are often called

When companies sell their receivables to other companies,the transaction is called factoring.

The difference between the balance in Accounts Receivable and the balance in the Allowance for Doubtful Accounts is called the net realizable value of the receivables.

On August 1,Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company.The terms of the note were $20,000 face value and 6% interest.On October 30,the journal entry to record the collection of the note should include a

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

Trade receivables occur when two companies trade or exchange notes receivable.

The interest on a 6%,60-day note for $5,000 is $300.

Paper Company receives a $6,000,3-month,6% promissory note from Dame Company in settlement of an open accounts receivable.What entry will Paper Company make upon receiving the note?

The journal entry to record a note received from a customer to replace an account is

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment),and bad debt expense is estimated at 3% of credit sales.If credit sales are $300,000,the amount of the adjusting entry to record the estimated uncollectible accounts receivable is

Journalize the following transactions for Lucite Company. November 14 Received a $4,800.00,90-day,9% note from Alan Albertson in payment of his account. December 31 Accrued interest on the Albertson note. February 12 Received the amount due from Albertson on his note.

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

To record estimated uncollectible receivables using the allowance method,the adjusting entry would be a

You have just received notice that a customer of yours with an Account Receivable balance of $100 has gone bankrupt and will not make any future payments.Assuming you use the allowance method,the entry you make is to ​

The accounts receivable turnover ratio is computed by dividing total gross sales by the average net receivables during the year.

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

You have just received notice that a customer of yours with an Account Receivable balance of $100 has gone bankrupt and will not make any future payments.Assuming you use the allowance method,the entry you make is to