Exam 9: Receivables

The Allowance for Bad Debts account has a debit balance of $9,000 before the adjusting entry for bad debts expense.After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method,the company's management estimates that uncollectible accounts will be $13,000.What amount of bad debts expense will be reported on the income statement?

The direct write-off method for uncollectible accounts violates the matching principle.

On July 7,Smithview Bank lent $440,000 to Andrews Retail Shop on a 90 day,7% note.What is the maturity date of the note?

Which of the following is an example of exercising internal control over receivables?

Days' sales in receivables is also called the collection period.

A business maintains subsidiary accounts for each of its customers.On May 15,the business sells services on account: $2,500 to customer J.Simmons;$4,100 to customer A.Jones;and $1,300 to customer J.Williams.Which journal entry is needed to record this sales transaction?

Niagara Art is a new business.During its first year of operations,credit sales were $44,000 and collections of credit sales were $33,000.One account,$625,was written off.Management uses the percent-of-sales method to account for bad debts expense and estimates 2% of credit sales to be uncollectible.Bad debts expense for the first year of operations is ________.

National Art is a new business.During its first year of operations,credit sales were $40,000 and collections were credit sales of $31,000.One account,$525 was written off.Management uses the percent-of-sales method to account for bad debts expense and estimates 2% of credit sales to be uncollectible.The ending balance of Allowance for Bad Debts account is ________.

On October 1,2017,Parkin,Inc.made a loan to one of its customers.The customer signed a 6-month note for $110,000 at 14%.Calculate the maturity value of the note.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

The accounts receivable turnover ratio measures ________.