Exam 9: Receivables

The matching rule

Assume that part of accounts and other receivables on Trejada's Toys' balance sheet is $8 million and that Thompson estimates its uncollectible accounts as 1 percent of accounts receivable not yet due,2 percent of accounts receivable between 1 and 60 days past due,and 10 percent of accounts receivable over 60 days past due.Determine the amount of Trejada's adjusting entry to recognize uncollectible accounts using the accounts receivable aging method,based on the following information: Accounts receivable not yet due $\quad$ $\quad$ $\quad$ $\quad$ $300,000 Accounts receivable 1 - 60 days past due $\quad$ $\quad$ 100,000 Accounts receivable over 60 days past due $\quad$ $\quad$ 50,000

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

On December 31,Jameson Products has a $300 credit balance in Allowance for Uncollectible Accounts.It estimates that 4 percent of the $60,000 in sales are uncollectible.After the appropriate adjusting entry for uncollectible accounts has been made,what will be the balance in Allowance for Uncollectible Accounts using the percentage of net sales method? Indicate if the balance is a debit or credit.(Show your work. )

When a note is dishonored,the payee's journal entry includes a

If average accounts receivable is $35,000 and net sales total $100,000,what is the receivables turnover?

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

The general ledger account for Accounts Receivable shows a debit balance of $40,000.The Allowance for Uncollectible Accounts has a credit balance of $2,000.Net sales for the year were $250,000.In the past,3 percent of net sales have proved uncollectible.An aging of accounts receivable accounts results in an estimate of $9,000 of uncollectible accounts receivable.Calculate (1)Uncollectible Accounts Expense and (2)the ending balance of the Allowance for Uncollectible Accounts using (a)the percentage of net sales method and (b)the accounts receivable aging method for both (1)and (2).

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

If the receivables turnover is 3.1 times,what is the days' sales uncollected?

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

What is a contingent liability,and how does it relate to the discounting of a note receivable at the bank?

Because bad debt losses are incurred to generate sales,they should be charged against the sales that they helped generate.

Which of the following situations results in a contingent liability?

The allowance for uncollectible accounts is necessary because

Under the allowance method,uncollectible accounts must be estimated if the matching rule is to be followed.

Assume that the $2,000,90-day,8 percent note was received on August 31 and that the fiscal year ended on September 30.The adjusting entry that would be made to record the interest receivable is (amounts rounded to nearest dollar):

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

Using the following transactions for 2014,show how the T account below would appear after all appropriate postings have been made.Assume an opening balance of $900.