Question 1

How is the account Allowance for Uncollectible Accounts presented in the financial statements,and what purpose does this presentation serve?

Accepted Answer

Allowance for Uncollectible Accounts is presented in the asset section of the balance sheet as a contra account to Accounts Receivable.It serves to reduce the receivables to the net amount ultimately expected to be realized.

Question 2

The direct charge-off method of recognizing uncollectible accounts is not in accordance with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False  True

Question 3

The following data exist for Sexton Company:
  Calculate the receivables turnover and the average days' sales uncollected for 2014.(Round to 1 decimal point and even days,respectively. )

Accepted Answer

Receivable turnover = $855,000 $\div$ [($130,000 + $110,000)$\div$ 2] = 7.1 times
Average days' sales uncollected = 365 $\div$7.1 = 51 days

Question 4

The direct charge-off method makes no attempt to match bad-debt losses with revenues.

Accepted Answer

A) True 
 B)False

Question 5

Interest on a note receivable may be calculated without knowledge of the

Accepted Answer

A) principal amount. 
B) rate of interest. 
C) note's maturity date. 
D) note's duration. 
A) principal amount. 
B) rate of interest. 
C) note's maturity date. 
D) note's duration.

Question 6

The holder,or payee,of a dishonored note should transfer the total amount due,including interest income,from Notes Receivable to an individual account receivable for the debtor.

Accepted Answer

A) True 
 B)False

Question 7

The interest on a three-month,12 percent,$16,200 note receivable is

Accepted Answer

A) $486. 
B) $162. 
C) $324. 
D) $1,944. 
A) $486. 
B) $162. 
C) $324. 
D) $1,944.

Question 8

Under the allowance method,when a specific account is written off,

Accepted Answer

A) total assets will be unchanged. 
B) total assets will decrease. 
C) net income will decrease. 
D) total assets will increase. 
A) total assets will be unchanged. 
B) total assets will decrease. 
C) net income will decrease. 
D) total assets will increase.

Question 9

When the allowance method is used,the write-off of an account receivable results in an expense at the time of write-off.

Accepted Answer

A) True 
 B)False

Question 10

A company performs the aging of accounts receivable calculation and arrives at an estimate for uncollectible accounts of $900.If Allowance for Uncollectible Accounts has a debit balance of $200 prior to the year-end adjustment,for how much should the adjustment be journalized?

Accepted Answer

A) $200 
B) $700 
C) $900 
D) $1,100 
A) $200 
B) $700 
C) $900 
D) $1,100

Question 11

Caudill Sales Company made most of its sales on credit during its first year of operation,2014.At the end of the year,accounts receivable amounted to $100,000.On December 31,2014,management reviewed the collectible status of the accounts receivable.Approximately $6,000 of the $100,000 of accounts receivable were estimated to be uncollectible.As per the accounts receivable aging method the adjusting entry that would be made on December 31 of that year is:

Accepted Answer

A) Uncollectible Accounts Expense 6,000 Accounts Receivable 6,000 
B) Allowance for Uncollectible Accounts 10,000 Uncollectible Accounts Expense 10,000 
C) Uncollectible Accounts Expense 6,000 Allowance for Uncollectible Accounts 6,000 
D) Allowance for Uncollectible Accounts 10,000 Accounts Receivable 10,000 
A) Uncollectible Accounts Expense 6,000 Accounts Receivable 6,000 
B) Allowance for Uncollectible Accounts 10,000 Uncollectible Accounts Expense 10,000 
C) Uncollectible Accounts Expense 6,000 Allowance for Uncollectible Accounts 6,000 
D) Allowance for Uncollectible Accounts 10,000 Accounts Receivable 10,000

Question 12

At year end,MWE Graphics has a $700 debit balance in Allowance for Uncollectible Accounts.It estimates that 5 percent of the $40,000 in sales are uncollectible.Give the amount that should be used in the adjusting entry to record uncollectible accounts using the percentage of net sales method.(Show your calculations. )

Accepted Answer

$2,000 credit to All

Question 13

A company that uses the allowance method writes off a specific account as uncollectible,but then the customer pays.The entries made upon receiving payment will

Accepted Answer

A) decrease Cash. 
B) decrease Allowance for Uncollectible Accounts. 
C) increase Allowance for Uncollectible Accounts. 
D) decrease Uncollectible Accounts Expense. 
A) decrease Cash. 
B) decrease Allowance for Uncollectible Accounts. 
C) increase Allowance for Uncollectible Accounts. 
D) decrease Uncollectible Accounts Expense.

Question 14

At year end,Korkin Design Company has a $900 credit balance in Allowance for Uncollectible Accounts.If an accounts receiving aging method analysis indicates that an estimated $5,700 of year-end receivables are uncollectible,what will be the balance in Allowance for Uncollectible Accounts after the appropriate adjusting entry for uncollectible accounts has been made? Indicate if the balance is a debit or credit.

Accepted Answer

The answer of At year end,Korkin Design Company has a...

Question 15

The balance of Accounts Receivable,net of the allowance account,is $25,000 before the write-off of a $2,000 account.What is the Accounts Receivable balance,net of the allowance account,after the write-off?

Accepted Answer

A) $2,000 
B) $23,000 
C) $25,000 
D) $27,000 
A) $2,000 
B) $23,000 
C) $25,000 
D) $27,000

Question 16

If net sales total $50,000,beginning accounts receivable was $10,000,and ending accounts receivable is 16,000.
-What is the days' sales collected?

Accepted Answer

A) 73 days 
B) 96 days 
C) 118 days 
D) 192 days 
A) 73 days 
B) 96 days 
C) 118 days 
D) 192 days

Question 17

A company has the following listed asset accounts.Determine the amount that should appear on the balance sheet as the total current assets.

Accepted Answer

$154,500 ($25,000 +

Question 18

Uncollectible accounts should not be estimated because it is impossible to know which accounts will not be collected.

Accepted Answer

A) True 
 B)False

Question 19

If the amount of uncollectible accounts expense is overstated at year end,

Accepted Answer

A) Allowance for Uncollectible Accounts will be understated. 
B) net income will be overstated. 
C) net Accounts Receivable will be understated. 
D) total liabilities and stockholders' equity will be overstated. 
A) Allowance for Uncollectible Accounts will be understated. 
B) net income will be overstated. 
C) net Accounts Receivable will be understated. 
D) total liabilities and stockholders' equity will be overstated.

Question 20

If net sales total $50,000,beginning accounts receivable was $10,000,and ending accounts receivable is 16,000.
-What is the receivables turnover?

Accepted Answer

A) 1.9 times 
B) 3.1 times 
C) 3.8 times 
D) 5 times 
A) 1.9 times 
B) 3.1 times 
C) 3.8 times 
D) 5 times

Exam 8: Receivables

How is the account Allowance for Uncollectible Accounts presented in the financial statements,and what purpose does this presentation serve?

The direct charge-off method of recognizing uncollectible accounts is not in accordance with generally accepted accounting principles.

The following data exist for Sexton Company: Calculate the receivables turnover and the average days' sales uncollected for 2014.(Round to 1 decimal point and even days,respectively. )

The direct charge-off method makes no attempt to match bad-debt losses with revenues.

Interest on a note receivable may be calculated without knowledge of the

The holder,or payee,of a dishonored note should transfer the total amount due,including interest income,from Notes Receivable to an individual account receivable for the debtor.

The interest on a three-month,12 percent,$16,200 note receivable is

Under the allowance method,when a specific account is written off,

When the allowance method is used,the write-off of an account receivable results in an expense at the time of write-off.

A company performs the aging of accounts receivable calculation and arrives at an estimate for uncollectible accounts of $900.If Allowance for Uncollectible Accounts has a debit balance of $200 prior to the year-end adjustment,for how much should the adjustment be journalized?

A company that uses the allowance method writes off a specific account as uncollectible,but then the customer pays.The entries made upon receiving payment will

The balance of Accounts Receivable,net of the allowance account,is $25,000 before the write-off of a $2,000 account.What is the Accounts Receivable balance,net of the allowance account,after the write-off?

If net sales total $50,000,beginning accounts receivable was $10,000,and ending accounts receivable is 16,000. -What is the days' sales collected?

A company has the following listed asset accounts.Determine the amount that should appear on the balance sheet as the total current assets.

Uncollectible accounts should not be estimated because it is impossible to know which accounts will not be collected.

If the amount of uncollectible accounts expense is overstated at year end,

If net sales total $50,000,beginning accounts receivable was $10,000,and ending accounts receivable is 16,000. -What is the receivables turnover?

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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