Exam 9: Receivables

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs for and received cash in full payment.

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

Receivables currently collectible are reported in the investments section of the balance sheet.

Which of the following receivables would not be classified as an "other receivable"?

Using the allowance method of accounting for uncollectible receivables, the entry to reinstate a specific receivable previously written off would include a

Accounts Receivable Turnover measures

Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment), and bad debt expense is estimated at 4% of net credit sales. If net credit sales are $800,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is

When does an account become uncollectible?

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

The number of days' sales in receivables is an estimate of the length of time the accounts receivables have been outstanding.

The direct write-off method records Bad Debt Expense in the year the specific account receivable is determined to be uncollectible.

Trade receivables occur when two companies trade or exchange notes receivables.

To record estimated uncollectible receivables using the allowance method, the adjusting entry would be a

Generally accepted accounting principles do normally allow the use of the direct write-off method of accounting for uncollectible accounts.

Other receivables include non trade receivables such as loans to company officers.

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.

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