Exam 9: Receivables

The following information is from the records of Pangolin Camera Shop: Bad expense is estimated by the aging-of-receivables method.Management estimates that $2,950 of accounts receivable will be uncollectible.Calculate the amount of net accounts receivable after the adjustment for bad debts.

Smart Calendars is a new business.During its first year of operations,credit sales were $40,000,and collections of credit sales were $36,000.One account,$650,was written off.Using the aging-of-receivables method,management calculates $200 as its estimate of uncollectible amounts at year end.Prepare the journal entry to record bad debts expense.

Days' sales in receivables measures ________.

When the credit card processor deposits the gross proceeds from credit and debit card sales ________.

The following information is from the 2017 records of Armand Music Shop: Bad debts expense is estimated by the percent-of-sales method.Management estimates that 6% of net credit sales will be uncollectible.Calculate the amount of bad debts expense for 2017.

The percent-of-sales method calculates bad debts expense based on a percentage of net cash sales.

The Allowance for Bad Debts account has a credit balance of $3,000 before the adjusting entry for bad debts expense.The company's management estimates that 5% of net credit sales will be uncollectible for the year 2017.Net credit sales for the year amounted to $290,000.What is the amount of Bad Debts Expense reported on the income statement for 2017?

The expense associated with the cost of uncollectible accounts receivable is known as bad debts expense.

Westwood Clothing Store reported the following selected items at June 30,2017 (last year - 2016 - amounts are also given as needed): Compute Westwood's acid-test ratio for 2017.Show your computations.(Round the answer to 2 decimal places. )

A receivable is a monetary claim against a business or an individual.

The credit department must have access to cash in order to exercise effective internal control over receivables.

On January 1,Davidson Services has the following balances: Accounts Receivable $21,000 Bad Debts Expense $0 Davidson has the following transactions during January: Credit sales of $150,000,collections of credit sales of $83,000,and write-offs of $20,000.Davidson uses the direct write-off method.The amount of Bad Debts Expense for January is ________.

When a business pledges its accounts receivable,it transfers the right to collect cash from customers to the bank.

In order to keep accurate records about the collection of cash for a previously written off account,collection of cash for a previously written off account,a business should re-establish the Accounts Receivable by crediting the receivable account.

Customer A.Smith owed Stonebridge Electronics $325.On April 27,2016,Stonebridge determined this account receivable to be uncollectible and wrote off the account.The company uses the direct write-off method.On July 15,2016,Stonebridge received a check for $325 from the customer.How should the July 15,2016 transaction be recorded?

A receivable occurs when a business sells goods or services to another party on account.

On July 7,Landview Bank lent $520,000 to Classical Music Shop on a 60 day,5% note.What is the maturity value of the note? (Use a 360-day year and round answers to the nearest dollar. )

If the maker of the note fails to pay on the maturity date,the note is said to be dishonored.

When a business factors its accounts receivables,the business ________.

The percent-of-sales method,used to compute bad debt expense,is also known as the balance sheet approach.