Exam 8: Receivables

You have just received notice that Agnes Fisher,a customer of yours with an Accounts Receivable balance of $200,has gone bankrupt and will not be making any future payments.Assuming you use the allowance method,the journal entry you make is to

Under the accounts receivable aging method,the balance in Allowance for Uncollectible Accounts must be considered prior to adjusting for estimated uncollectible accounts.

Interest on a 180-day,10 percent,$10,000 note receivable is

Explain the two methods used to estimate uncollectible accounts.

A company that factors its receivables will have a less favorable receivable turnover than a company that does not factor.

The sale or transfer of accounts receivable to raise funds is called

A discounted note represents a contingent liability to the original holder.

Use the following T account to answer the questions below (assume a calendar-year accounting period). What apparently occurred on: a.January 10? b.January 15? c.May 12? d.December 31?

The allowance for uncollectible accounts is similar to accumulated depreciation in that it represents the total of all accounts written off over the years.

Using the percentage of net sales method,uncollectible accounts expense for the year is estimated to be $44,000.If the balance of the Allowance for Uncollectible Accounts is a $9,000 credit before adjustment,what is the balance after adjustment?

Under securitization,a company sells individual receivables with recourse at a large discount.

Assume that on December 1,a $6,000,90-day,10 percent note receivable was received from a customer as an extension of his past-due account.The entry that would be made to record the note is:

A 60-day note dated December 10 is due on February 10.

Assume that on November 1,a note which has a face value of $9,000,bears interest at 9 percent for 120 days,received from a customer as an extension of her past-due account is dishonored.The entry that would be made to record the dishonor include all except

Determine the interest on the following notes payable: a.$6,000 at 10 percent for 60 days b.$600 at 16 percent for 4 months c.$10,000 at 12 percent for 45 days d.$900 at 14 percent for 30 days

Under the direct charge-off method of dealing with uncollectible accounts,

The receivables turnover is expressed as a percentage.

Bad debts are considered as an expense of selling on credit.

Use this information to answer the following question. The general ledger account for Accounts Receivable shows a debit balance of $50,000.Allowance for Uncollectible Accounts has a credit balance of $1,000.Net sales for the year were $500,000.In the past,2 percent of sales have proved uncollectible,and an aging of accounts receivable accounts results in an estimate of $11,700 of uncollectible accounts. Using the accounts receivable aging method,the Allowance for Uncollectible Accounts balance would be credited for

The balance in Allowance for Uncollectible Accounts must be considered prior to end-of-period adjustment when using which of the following methods?