Question 1

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 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 for 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,...

Question 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

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

Accepted Answer

The answer of When a company uses the allowance method...

Question 7

Match each description to the appropriate term (a-h).
-A formal, written instrument of credit that represents amounts due from customers
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

The answer of Match each description to the appropriate term...

Question 8

No allowance account is used with the direct write-off method.

Accepted Answer

A) True 
 B)False

Question 9

Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. Harper Company prepares financial statements on March 31. What adjusting entry should be made before the financial statements can be prepared?

Accepted Answer

The answer of Harper Company lends Hewell Company $40,000 on...

Question 10

Match each description to the appropriate term (a-h).
-A note that is not paid when it is due
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

The answer of Match each description to the appropriate term...

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $19,700. Which of the following entries records the proper adjustment for bad debt expense?

Accepted Answer

A) debit Allowance for Doubtful Accounts, $17,600; credit Bad Debt Expense, $17,600 
B) debit Allowance for Doubtful Accounts, $21,800; credit Bad Debt Expense, $21,800 
C) debit Bad Debt Expense, $21,800; credit Allowance for Doubtful Accounts, $21,800 
D) debit Bad Debt Expense, $17,600; credit Allowance for Doubtful Accounts, $17,600

Question 13

Match each description to the appropriate term (a-i).
-A receivable created from selling merchandise or services on account
A)Accounts receivable turnover
B)Net realizable value
C)Accounts receivable
D)Aging report
E)Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Factoring

Accepted Answer

The answer of Match each description to the appropriate term...

Question 14

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

Accepted Answer

A) $10,000 
B) $10,150 
C) $10,900 
D) $9,100

Question 15

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.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) at the end of each accounting period 
B) when a credit sale is past due 
C) whenever a predetermined amount of credit sales have been made 
D) when an account is determined to be worthless

Question 18

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. Show total current assets.

Accepted Answer

The answer of On the basis of the following data...

Question 19

When a note is received from a customer on account, it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 20

Receivables that are expected to be collected in cash in eighteen months or less are reported in the current asset section of the balance sheet.

Accepted Answer

A) True 
 B)False

Exam 8: Receivables

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

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

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.

Two methods of accounting for uncollectible accounts are the

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

Match each description to the appropriate term (a-h). -A formal, written instrument of credit that represents amounts due from customers A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

No allowance account is used with the direct write-off method.

Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. Harper Company prepares financial statements on March 31. What adjusting entry should be made before the financial statements can be prepared?

Match each description to the appropriate term (a-h). -A note that is not paid when it is due A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

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

Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment) , and an analysis of customers' accounts indicates uncollectible receivables of $19,700. Which of the following entries records the proper adjustment for bad debt expense?

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

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

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

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. Show total current assets.

When a note is received from a customer on account, it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

Receivables that are expected to be collected in cash in eighteen months or less are reported in the current asset section of the balance sheet.