Exam 9: Receivables

If the amount of uncollectible accounts expense is overstated at year end,

What purpose is served by a factoring arrangement? What does it mean to factor accounts receivable with recourse?

Using the percentage of net sales method,uncollectible accounts expense for the year is estimated to be $44,000.If the balance of the Allowance for Uncollectible Accounts is a $9,000 credit before adjustment,what is the balance after adjustment?

The fee for factoring without recourse is normally higher than it would be with recourse.

Use this information to answer the following question. The general ledger account for Accounts Receivable shows a debit balance of $50,000.Allowance for Uncollectible Accounts has a credit balance of $1,000.Net sales for the year were $494,000.In the past,2 percent of sales have proved uncollectible,and an aging of accounts receivable accounts results in an estimate of $13,500 of uncollectible accounts. Using the percentage of net sales method,the Allowance for Uncollectible Accounts balance (after adjustment)would be

Use this information to answer the following question. The general ledger account for Accounts Receivable shows a debit balance of $50,000.Allowance for Uncollectible Accounts has a credit balance of $1,000.Net sales for the year were $500,000.In the past,2 percent of sales have proved uncollectible,and an aging of accounts receivable accounts results in an estimate of $13,500 of uncollectible accounts. Using the percentage of net sales method,Uncollectible Accounts Expense would be debited for

If net sales total $50,000,beginning accounts receivable was $10,000,and ending accounts receivable is 16,000,what is the days' sales collected?

Under the accounts receivable aging method,the balance in Allowance for Uncollectible Accounts must be considered prior to adjusting for estimated uncollectible accounts.

The existence of uncollectible accounts is evidence of poor credit policies.

When Company A discounts without recourse a note to Company B,Company A has a contingent liability until the note is paid.

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

A company's acceptance of credit cards like Visa is an example of

When an account receivable that was previously written off is collected,it is necessary to reverse the entry for the write-off before recording the collection.

The balance in Allowance for Uncollectible Accounts must be considered prior to end-of-period adjustment when using which of the following methods?

The receivables turnover is expressed as a percentage.

Assume that on November 1,a note which has a face value of $9,000,bears interest at 9 percent for 120 days,received from a customer as an extension of her past-due account is dishonored.The entry that would be made to record the dishonor include all except

What is a contingent liability,and how does it relate to the discounting of a note receivable at the bank?

A discounted note represents a contingent liability to the original holder.

If the amount of uncollectible accounts expense is understated at year end,

Under the allowance method,Uncollectible Accounts Expense is recorded