Question 1

On the basis of the following data related to assets due within one year for Webb Co., prepare a partial balance sheet in good form at December 31, 2014. Show total current assets.

Accepted Answer

The answer of On the basis of the following data...

Question 2

Receivables not currently collectible are reported in the investments section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

Lone Star Company received a 90-day, 6% note for $80,000, dated March 12 from a customer on account. (Assume a 360-day year when calculating interest.)

Accepted Answer

The answer of Lone Star Company received a 90-day, 6%...

Question 4

When referring to a note receivable or promissory note

Accepted Answer

A)  the maker is the party to whom the money is due. 
B)  the note is not considered a formal credit instrument. 
C)  the note cannot be factored to another party. 
D)  the note may be used to settle an accounts receivable. 
A)  the maker is the party to whom the money is due. 
B)  the note is not considered a formal credit instrument. 
C)  the note cannot be factored to another party. 
D)  the note may be used to settle an accounts receivable.

Question 5

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

Accepted Answer

A)  affects only income statement accounts. 
B)  is not an acceptable practice. 
C)  affects only balance sheet accounts. 
D)  affects both balance sheet and income statement accounts. 
A)  affects only income statement accounts. 
B)  is not an acceptable practice. 
C)  affects only balance sheet accounts. 
D)  affects both balance sheet and income statement accounts.

Question 6

The term "receivables" includes all

Accepted Answer

A)  money claims against other entities. 
B)  merchandise to be collected from individuals or companies. 
C)  cash to be paid to creditors. 
D)  cash to be paid to debtors. 
A)  money claims against other entities. 
B)  merchandise to be collected from individuals or companies. 
C)  cash to be paid to creditors. 
D)  cash to be paid to debtors.

Question 7

A 60-day, 12% note for $7,000, dated April 15, is received from a customer on account. The face value of the note is

Accepted Answer

A)  $6,860 
B)  $7,140 
C)  $7,840 
D)  $7,000 
A)  $6,860 
B)  $7,140 
C)  $7,840 
D)  $7,000

Question 8

Discuss the similarities and differences between accounts receivables, notes receivables and other receivables.

Accepted Answer

Accounts receivables result from the sal

Question 9

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000. Which of the following entries records the proper adjusting entry for bad debt expense?

Accepted Answer

A)  debit Bad Debt Expense, $600; credit Allowance for Doubtful Accounts, $600 
B)  debit Bad Debt Expense, $12,400; credit Allowance for Doubtful Accounts, $12,400 
C)  debit Allowance for Doubtful Accounts, $600; credit Bad Debt Expense, $600 
D)  debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600 
A)  debit Bad Debt Expense, $600; credit Allowance for Doubtful Accounts, $600 
B)  debit Bad Debt Expense, $12,400; credit Allowance for Doubtful Accounts, $12,400 
C)  debit Allowance for Doubtful Accounts, $600; credit Bad Debt Expense, $600 
D)  debit Bad Debt Expense, $13,600; credit Allowance for Doubtful Accounts, $13,600

Question 10

Discuss the (1) focus and (2) financial statement emphasis of (a) the percent of sales and (b) the analysis of receivables methods of estimating bad debts.

Accepted Answer

(a) Bad debt expense is the focus of the

Question 11

In accounting for uncollectible receivables, the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

Accepted Answer

A)  direct write-off method 
B)  percentage of sales method 
C)  Analysis of receivables method 
D)  both (b) and (c) 
A)  direct write-off method 
B)  percentage of sales method 
C)  Analysis of receivables method 
D)  both (b) and (c)

Question 12

The maturity value of a note receivable is always the same as its face value.

Accepted Answer

A) True 
 B)False

Question 13

Accounts Receivable Turnover measures

Accepted Answer

A)  how frequently during the year the accounts receivable are converted to cash 
B)  the number of days of accounts receivable outstanding 
C)  the fair market value of accounts receivable 
D)  the efficiency of the accounts payable function 
A)  how frequently during the year the accounts receivable are converted to cash 
B)  the number of days of accounts receivable outstanding 
C)  the fair market value of accounts receivable 
D)  the efficiency of the accounts payable function

Question 14

Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900. Which of the following adjusting entries would be made to record the Bad Debt Expense for the year?

Accepted Answer

A)  debit Allowance for Doubtful Accounts, $40,600; credit Bad Debt Expense, $40,600 
B)  debit Allowance for Doubtful Accounts $43,200; credit Bad Debt Expense, $43,200 
C)  debit Bad Debt Expense, $43,200; credit Allowance for Doubtful Accounts, $43,200 
D)  debit Bad Debt Expense, $40,600; credit Allowance for Doubtful Accounts, $40,600 
A)  debit Allowance for Doubtful Accounts, $40,600; credit Bad Debt Expense, $40,600 
B)  debit Allowance for Doubtful Accounts $43,200; credit Bad Debt Expense, $43,200 
C)  debit Bad Debt Expense, $43,200; credit Allowance for Doubtful Accounts, $43,200 
D)  debit Bad Debt Expense, $40,600; credit Allowance for Doubtful Accounts, $40,600

Question 15

Discuss the two methods for recording bad-debt expense. What type of company uses each method?

Accepted Answer

The first method is the direct write-off

Question 16

Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables.

Accepted Answer

A) True 
 B)False

Question 17

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

Accepted Answer

A) True 
 B)False

Question 18

An aging of a company's accounts receivable indicates that estimate of the uncollectible accounts totals $4,000. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record the bad debt expense for the period will require a

Accepted Answer

A)  debit to Allowance for Doubtful Accounts for $3,200. 
B)  debit to Bad Debt Expense for $3,200. 
C)  debit to Allowance for Doubtful Accounts for $4,000. 
D)  credit to Allowance for Doubtful Accounts for $4,000. 
A)  debit to Allowance for Doubtful Accounts for $3,200. 
B)  debit to Bad Debt Expense for $3,200. 
C)  debit to Allowance for Doubtful Accounts for $4,000. 
D)  credit to Allowance for Doubtful Accounts for $4,000.

Question 19

An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a

Accepted Answer

A)  debit to Bad Debt Expense for $8,600. 
B)  debit to Bad Debt Expense for $7,900. 
C)  debit to Bad Debt Expense for $7,200. 
D)  credit to Allowance for Doubtful Accounts for $700. 
A)  debit to Bad Debt Expense for $8,600. 
B)  debit to Bad Debt Expense for $7,900. 
C)  debit to Bad Debt Expense for $7,200. 
D)  credit to Allowance for Doubtful Accounts for $700.

Question 20

The difference between the balance in Accounts Receivable and the balance in the Allowance for Doubtful Accounts is called the net realizable value.

Accepted Answer

A) True 
 B)False

Exam 8: Receivables

On the basis of the following data related to assets due within one year for Webb Co., prepare a partial balance sheet in good form at December 31, 2014. Show total current assets.

Receivables not currently collectible are reported in the investments section of the balance sheet.

Lone Star Company received a 90-day, 6% note for $80,000, dated March 12 from a customer on account. (Assume a 360-day year when calculating interest.)

When referring to a note receivable or promissory note

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

The term "receivables" includes all

A 60-day, 12% note for $7,000, dated April 15, is received from a customer on account. The face value of the note is

Discuss the similarities and differences between accounts receivables, notes receivables and other receivables.

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000. Which of the following entries records the proper adjusting entry for bad debt expense?

Discuss the (1) focus and (2) financial statement emphasis of (a) the percent of sales and (b) the analysis of receivables methods of estimating bad debts.

In accounting for uncollectible receivables, the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

The maturity value of a note receivable is always the same as its face value.

Accounts Receivable Turnover measures

Discuss the two methods for recording bad-debt expense. What type of company uses each method?

Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables.

Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash.

An aging of a company's accounts receivable indicates that estimate of the uncollectible accounts totals $4,000. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record the bad debt expense for the period will require a

An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a

The difference between the balance in Accounts Receivable and the balance in the Allowance for Doubtful Accounts is called the net realizable value.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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