Question 1

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case.

Accepted Answer

The answer of Determine the amount to be added to...

Question 2

Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,000. Based on the estimate above, which of the following adjusting entries should be made?

Accepted Answer

A)  debit Bad Debt Expense, $800; credit Allowance for Doubtful Accounts, $800 
B)  debit Bad Debt Expense, $15,200; credit Allowance for Doubtful Accounts, $15,200 
C)  debit Allowance for Doubtful Accounts, $800; credit Bad Debt Expense, $800 
D)  debit Bad Debt Expense, $16,800; credit Allowance for Doubtful Accounts, $16,800 
A)  debit Bad Debt Expense, $800; credit Allowance for Doubtful Accounts, $800 
B)  debit Bad Debt Expense, $15,200; credit Allowance for Doubtful Accounts, $15,200 
C)  debit Allowance for Doubtful Accounts, $800; credit Bad Debt Expense, $800 
D)  debit Bad Debt Expense, $16,800; credit Allowance for Doubtful Accounts, $16,800

Question 3

Based on the following data and using a 365-day year, compute (a) the accounts receivable turnover and (b) the number of days' sales in receivables. The industry average is a collection period of once every 20 days, and the number of days' sales in receivables averages 25. (c) Comment on this situation.

Accepted Answer

The answer of Based on the following data and using...

Question 4

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

Question 5

When using the direct write-off method off accounting for uncollectible receivables, the account Allowance for Doubtful Accounts is debited when a specific account is determined to be uncollectible.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

The answer of Determine the due date and the amount...

Question 8

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

Accepted Answer

The answer of The following journal entries would be used...

Question 9

Allowance for Doubtful Accounts has a debit balance of $1,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $12,900. Which of the following entries records the proper adjustment for Bad Debt Expense?

Accepted Answer

A)  debit Bad Debt Expense, $14,000; credit Allowance for Doubtful Accounts, $14,000 
B)  debit Allowance for Doubtful Accounts, $14,000; credit Bad Debt Expense, $14,000 
C)  debit Allowance for Doubtful Accounts, $11,800; credit Bad Debt Expense, $11,800 
D)  debit Bad Debt Expense, $11,800; credit Allowance for Doubtful Accounts, $11,800 
A)  debit Bad Debt Expense, $14,000; credit Allowance for Doubtful Accounts, $14,000 
B)  debit Allowance for Doubtful Accounts, $14,000; credit Bad Debt Expense, $14,000 
C)  debit Allowance for Doubtful Accounts, $11,800; credit Bad Debt Expense, $11,800 
D)  debit Bad Debt Expense, $11,800; credit Allowance for Doubtful Accounts, $11,800

Question 10

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

Accepted Answer

A)  Uncollectible Accounts Receivable 
B)  Accounts Receivable 
C)  Allowance for Doubtful Accounts 
D)  Bad Debts Expense 
A)  Uncollectible Accounts Receivable 
B)  Accounts Receivable 
C)  Allowance for Doubtful Accounts 
D)  Bad Debts Expense

Question 11

The equation for computing interest on an interest-bearing note is as follows: interest equals maturity value times interest rate times time.

Accepted Answer

A) True 
 B)False

Question 12

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

Accepted Answer

A)  Uncollectible Accounts Expense 
B)  Allowance for Doubtful Accounts 
C)  Accounts Receivable 
D)  Interest Expense 
A)  Uncollectible Accounts Expense 
B)  Allowance for Doubtful Accounts 
C)  Accounts Receivable 
D)  Interest Expense

Question 13

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

Accepted Answer

A)  Liabilities decrease. 
B)  Net Income is unchanged. 
C)  Total Assets are unchanged. 
D)  Total Assets decrease. 
A)  Liabilities decrease. 
B)  Net Income is unchanged. 
C)  Total Assets are unchanged. 
D)  Total Assets decrease.

Question 14

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and bad debt expense is estimated at 3% of net credit sales. If net credit sales are $300,000, the amount of the adjusting entry to record the estimated uncollectible accounts receivables is

Accepted Answer

A)  $8,500 
B)  $8,500. 
C)  $9,000. 
D)  Cannot be determined 
A)  $8,500 
B)  $8,500. 
C)  $9,000. 
D)  Cannot be determined

Question 15

Abbott Company uses the allowance method of accounting for uncollectible accounts. Abbott estimates that 3% of net credit sales will be uncollectible. On January 1, 2010, the Allowance for Doubtful Accounts had a credit balance of $2,400. During 2010, Abbott wrote-off accounts receivable totaling $1,800 and made credit sales of $100,000. There were no Sales Returns or Sales Discounts during the year. After the adjusting entry, the December 31, 2010, balance in the Bad Debt Expense would be

Accepted Answer

A)  $1,200 
B)  $3,000 
C)  $3,600 
D)  $7,200 
A)  $1,200 
B)  $3,000 
C)  $3,600 
D)  $7,200

Question 16

An alternative name for Bad Debt Expense is

Accepted Answer

A)  Collection Expense. 
B)  Credit Loss Expense. 
C)  Uncollectible Accounts Expense. 
D)  Deadbeat Expense. 
A)  Collection Expense. 
B)  Credit Loss Expense. 
C)  Uncollectible Accounts Expense. 
D)  Deadbeat Expense.

Question 17

a) The aging of Torme Designs shown below. Calculate the amount of each periodicity range that is deemed to be uncollectible.
   b) If the Allowance for Doubtful Accounts has a credit balance of $1,135.00, record the adjusting entry for the bad debt expense for the year.

Accepted Answer

@#IMG-DLM&_TB2013_00 Dec 31 Uncollectibl

Question 18

The maturity value of a 12%, 60-day note for $5,000 is $5,600.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 9: Receivables

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case.

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

When using the direct write-off method off accounting for uncollectible receivables, the account Allowance for Doubtful Accounts is debited when a specific account is determined to be uncollectible.

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

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

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

Allowance for Doubtful Accounts has a debit balance of $1,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $12,900. Which of the following entries records the proper adjustment for Bad Debt Expense?

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

The equation for computing interest on an interest-bearing note is as follows: interest equals maturity value times interest rate times time.

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and bad debt expense is estimated at 3% of net credit sales. If net credit sales are $300,000, the amount of the adjusting entry to record the estimated uncollectible accounts receivables is

An alternative name for Bad Debt Expense is

a) The aging of Torme Designs shown below. Calculate the amount of each periodicity range that is deemed to be uncollectible. b) If the Allowance for Doubtful Accounts has a credit balance of $1,135.00, record the adjusting entry for the bad debt expense for the year.

The maturity value of a 12%, 60-day note for $5,000 is $5,600.

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

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

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

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

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