Exam 8: Receivables

The two methods of accounting for uncollectible receivables are the allowance method and the

When using the analysis of receivables method for estimating uncollectible receivables, the amount computed in the analysis is usually the amount that would be recorded in the end-of-period adjusting entry.

Allowance for Doubtful Accounts has a debit balance of $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 $600,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is

Allowance for Doubtful Accounts has a debit balance of $1,200 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $13,900. Which of the following adjusting entries is needed to record the Bad Debt Expense for the year?

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.

At the end of a period, (before adjustment), Allowance for Doubtful Accounts has a credit balance of $250. The net credit sales for the period total $500,000. If the company estimates uncollectible accounts expense at 1% of net credit sales, the amount of bad debt expense to be recorded in an adjusting entry is $4,750.

Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before adjusting entries are recorded at the end of the accounting period.

For the fiscal years 2009 and 2010, Apple Co. reported the following: $\text { Year Ended December 31,}$ 2010 2009 \ 34,124,961 \ 44,123,486 Net Sales 719,365 749,321 Accounts Receivable a. Compute the accounts receivable turnover for 2010. b. Compute the number of days' sales in receivable at the end of 2010.

Fill in the blanks related to the characteristics of a promissory note:

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.

The balance in Allowance for Doubtful Accounts will directly impact the end of period adjustment for the bad debt expense when using which of the following methods?

Determine the due date and amount of interest due at maturity on the following notes:

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

The following journal entries would be used in one of the two methods of accounting for uncollectible receivables. Identify each.

Fellows Corporation has determined that the $1,500 accounts receivable due from Andrew Stevens is uncollectible. Compare the journal entry that is required under the direct write-off method to the journal entry that is required using the allowance method.

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

At the end of a period (before adjustment), Allowance for Doubtful Accounts has a credit balance of $5,000. The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000. The amount to be recorded in the adjusting entry for the Bad Debt Expense is $45,000.

Other than accounts receivable and notes receivable, name other receivables that might be included in the general ledger.

Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. 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 $2,000 before adjustment?

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