Question 1

The balance in the Allowance for Doubtful Accounts account at the end of the year includes the total of all accounts written-off since the beginning year.

Accepted Answer

A) True 
 B)False

Question 2

At the end of the current year,Accounts Receivable has a balance of $750,000;Allowance for Doubtful Accounts has a debit balance of $6,200;and net sales for the year total $3,500,000.Bad debt expense is estimated at 1/2 of 1% of net sales.
Determine (a)the amount of the adjusting entry for bad debt expense; (b)the adjusted balances of Accounts Receivable,Allowance of Doubtful Accounts;and Bad Debt Expense;and (c)the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,Accounts...

Question 3

When companies sell their receivables to other companies,the transaction is called factoring.

Accepted Answer

A) True 
 B)False

Question 4

The interest on a 6%,60-day note for $5,000 is $300.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) $29,500 
B) $34,500 
C) $32,000 
D) cannot be determined 
A) $29,500 
B) $34,500 
C) $32,000 
D) cannot be determined

Question 6

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a debit balance of $2,000.The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $15,000.The amount to be recorded in the adjusting entry for the bad debt expense is $15,000.

Accepted Answer

A) True 
 B)False

Question 7

When an account receivable that has been written off is subsequently collected,the account receivable is said to be reinstated.

Accepted Answer

A) True 
 B)False

Question 8

On the balance sheet,the amount shown for the Allowance for Doubtful Accounts is equal to the

Accepted Answer

A) Uncollectible accounts expense for the year 
B) total of the accounts receivables written-off during the year 
C) total estimated uncollectible accounts as of the end of the year 
D) sum of all accounts that are past due. 
A) Uncollectible accounts expense for the year 
B) total of the accounts receivables written-off during the year 
C) total estimated uncollectible accounts as of the end of the year 
D) sum of all accounts that are past due.

Question 9

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 10

Financial Statement data for the years ended December 31 for Parker Corporation is as follows:
2012 2011
Net Sales $2,595,600 $2,409,500
Accounts Receivable
Beginning of the year $ 390,000 $400,000
End of the year 434,000 390,000
a)Determine the accounts receivable turnover for 2012 and 2011.
b)Determine the number of days' sales in receivables for 2012 and 2011.
c)Does the change in accounts receivable turnover and number of days' sales in receivables from 2011 to 2012 indicate a favorable or unfavorable trend.?

Accepted Answer

a)Accounts receivable turnover:
2012 201

Question 11

At the end of the current year,Accounts Receivable has a balance of $550,000;Allowance for Doubtful Accounts has a credit balance of $5,500;and net sales for the year total $2,500,000.An analysis of receivables estimates uncollectible receivables as $25,000.
Determine (a)the amount of the adjusting entry for bad debt expense; (b)the adjusted balances of Accounts Receivable,Allowance of Doubtful Accounts;and Bad Debt Expense;and (c)the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,Accounts...

Question 12

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

Accepted Answer

A) True 
 B)False

Question 13

When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Accepted Answer

A) Bad Debt Expense 500 Allowance for Doubtful Accounts 500 
B) Bad Debt Expense 500 Accounts Receivable - Bob Smith 500 
C) Cash 300 Allowance for Doubtful Accounts 200
Accounts Receivable - Bob Smith 500 
D) Cash 500 Accounts Receivable - Bob Smith 500 
A) Bad Debt Expense 500 Allowance for Doubtful Accounts 500 
B) Bad Debt Expense 500 Accounts Receivable - Bob Smith 500 
C) Cash 300 Allowance for Doubtful Accounts 200
Accounts Receivable - Bob Smith 500 
D) Cash 500 Accounts Receivable - Bob Smith 500

Question 14

Two methods of accounting for uncollectible accounts are the

Accepted Answer

A) direct write-off method and the allowance method. 
B) allowance method and the accrual method. 
C) allowance method and the net realizable method. 
D) direct write-off method and the accrual method. 
A) direct write-off method and the allowance method. 
B) allowance method and the accrual method. 
C) allowance method and the net realizable method. 
D) direct write-off method and the accrual method.

Question 15

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

Accepted Answer

A) True 
 B)False

Question 16

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 17

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% note...

Question 18

Tanning Company analyzes its receivables to estimate bad debt expense.The accounts receivable balance is $390,000 and credit sales are $1,300,000.An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible.What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

Accepted Answer

A) Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000 
B) Bad Debt Expense 19,500 Allowance for Doubtful Accounts 19,500 
C) Bad Debt Expense 22,000 Allowance for Doubtful Accounts 22,000 
D) Bad Debt Expense 65,000 Allowance for Doubtful Accounts 65,000 
A) Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000 
B) Bad Debt Expense 19,500 Allowance for Doubtful Accounts 19,500 
C) Bad Debt Expense 22,000 Allowance for Doubtful Accounts 22,000 
D) Bad Debt Expense 65,000 Allowance for Doubtful Accounts 65,000

Question 19

Notes or accounts receivables that result from sales transactions are often called

Accepted Answer

A) non-trade receivables. 
B) trade receivables. 
C) merchandise receivables. 
D) sales receivables. 
A) non-trade receivables. 
B) trade receivables. 
C) merchandise receivables. 
D) sales receivables.

Question 20

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

Accepted Answer

A) will increase net income in the period it is collected. 
B) will decrease net income in the period it is collected. 
C) does not affect net income in the period it is collected. 
D) requires a correcting entry for the period in which the account was written off. 
A) will increase net income in the period it is collected. 
B) will decrease net income in the period it is collected. 
C) does not affect net income in the period it is collected. 
D) requires a correcting entry for the period in which the account was written off.

The balance in the Allowance for Doubtful Accounts account at the end of the year includes the total of all accounts written-off since the beginning year.

When companies sell their receivables to other companies,the transaction is called factoring.

The interest on a 6%,60-day note for $5,000 is $300.

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 an account receivable that has been written off is subsequently collected,the account receivable is said to be reinstated.

On the balance sheet,the amount shown for the Allowance for Doubtful Accounts is equal to the

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

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Two methods of accounting for uncollectible accounts are the

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

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

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. )

Notes or accounts receivables that result from sales transactions are often called

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

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

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Exam 8: Receivables

The balance in the Allowance for Doubtful Accounts account at the end of the year includes the total of all accounts written-off since the beginning year.

When companies sell their receivables to other companies,the transaction is called factoring.

The interest on a 6%,60-day note for $5,000 is $300.

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 an account receivable that has been written off is subsequently collected,the account receivable is said to be reinstated.

On the balance sheet,the amount shown for the Allowance for Doubtful Accounts is equal to the

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

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Two methods of accounting for uncollectible accounts are the

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

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

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. )

Notes or accounts receivables that result from sales transactions are often called

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

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

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