Question 1

The quality of receivables refers to:

Accepted Answer

A)  The creditworthiness of sellers. 
B)  The speed of collection. 
C)  The likelihood of collection without loss. 
D)  Sales turnover. 
E)  The interest rate.

Question 2

The practice of placing dishonored notes receivable into accounts receivable keeps only notes that have not matured in the Notes Receivable account.

Accepted Answer

A) True 
 B)False

Question 3

On September 1, a customer's account balance of $2,300 was deemed to be uncollectible. What entry should be recorded on September 1 to record the write-off assuming the company uses the allowance method?

Accepted Answer

A)  Debit Bad Debts Expense $2,300; credit Accounts Receivable $2,300. 
B)  Debit Allowance for Doubtful Accounts $2,300; credit Bad Debts Expense $2,300. 
C)  Debit Allowance for Doubtful Accounts $2,300; credit Accounts Receivable $2,300. 
D)  Debit Bad Debts Expense $2,300; credit Allowance for Doubtful Accounts $2,300. 
E)  Debit Accounts Receivable $250; credit Allowance for Doubtful Accounts $2,300.

Question 4

Dart reported net sales of $8,739 million and average accounts receivable of $864 million. Its accounts receivable turnover is:

Accepted Answer

A)  0.90. 
B)  10.1. 
C)  36.1. 
D)  50.0. 
E)  3,686.

Question 5

On April 30, Steinbeck Co. has $448,800 of accounts receivable. 1. Prepare journal entries to record the following selected May transactions. The company uses the perpetual inventory system. 2. Also prepare any footnotes to the May 31 financial statements that result from these transactions. 3. Calculate the balance in the Accounts Receivable account as of May 10.

Accepted Answer

The answer of On April 30, Steinbeck Co. has $448,800...

Question 6

At December 31 of the current year, a company reported the following:
Total sales for the current year: $780,000 includes $160,000 in cash sales
Accounts receivable balance at Dec. 31, end of current year: $190,000
Allowance for Doubtful Accounts balance at January 1, beginning of current year: $8,300
Bad debts written off during the current year: $6,800.
Prepare the necessary adjusting entries to record bad debts expense assuming this company's bad debts are estimated to equal:
(a) 1.5% of credit sales.
(b) 5% of accounts receivable.

Accepted Answer

The answer of At December 31 of the current year,...

Question 7

An accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period the sales are recorded, and (2) reports accounts receivable at the estimated amount of cash to be collected is the:

Accepted Answer

A)  Allowance method of accounting for bad debts. 
B)  Aging of notes receivable. 
C)  Adjustment method for uncollectible debts. 
D)  Direct write-off method of accounting for bad debts. 
E)  Cash basis method of accounting for bad debts.

Question 8

A company has the following unadjusted account balances at December 31, of the current year; Accounts Receivable of $185,700 and Allowance for Doubtful Accounts of $1,600 (credit balance). The company uses the aging of accounts receivable to estimate its bad debts. The following aging schedule reflects its accounts receivable at the current year-end:

Accepted Answer

The answer of A company has the following unadjusted account...

Question 9

Explain the options a company has to convert its receivables to cash.

Accepted Answer

The answer of Explain the options a company has to...

Question 10

The aging of accounts receivable involves classifying each account receivable by how long it is past its due date and estimating the percent of each uncollectible class.

Accepted Answer