Question 1

A critical part of managing receivables is determining who should be extended credit and who should not.

Accepted Answer

A) True 
 B)False

Question 2

When posting is up-to-date, the balance in the accounts receivable subsidiary ledger must equal the balance in the general ledger.

Accepted Answer

A) True 
 B)False

Question 3

One might infer from a debit balance in Allowance for Doubtful Accounts that

Accepted Answer

A) a posting error has been made. 
B) more accounts have been written off than had been estimated would be uncollectible. 
C) the percentage of receivables basis is being used. 
D) bad debts expense has been overestimated. 
A) a posting error has been made. 
B) more accounts have been written off than had been estimated would be uncollectible. 
C) the percentage of receivables basis is being used. 
D) bad debts expense has been overestimated.

Question 4

When an account is written off using the allowance method for uncollectible accounts, the

Accepted Answer

A) net realizable value of total accounts receivable will increase. 
B) net accounts receivable will decrease. 
C) allowance account will increase. 
D) net accounts receivable will stay the same. 
A) net realizable value of total accounts receivable will increase. 
B) net accounts receivable will decrease. 
C) allowance account will increase. 
D) net accounts receivable will stay the same.

Question 5

The maturity date of a note is

Accepted Answer

A) the period of time from the note's issue date to its due date. 
B) the day the note must be repaid. 
C) at the company's year-end. 
D) when adjusting journal entries are made. 
A) the period of time from the note's issue date to its due date. 
B) the day the note must be repaid. 
C) at the company's year-end. 
D) when adjusting journal entries are made.

Question 6

Advances to employees are a type of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 7

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a debit to

Accepted Answer

A) Accounts Receivable and a credit to Allowance for Doubtful Accounts. 
B) Bad Debts Expense and a credit to Allowance for Doubtful Accounts. 
C) Allowance for Doubtful Accounts and a credit to Accounts Receivable. 
D) Bad Debts Expense and a credit to Accounts Receivable. 
A) Accounts Receivable and a credit to Allowance for Doubtful Accounts. 
B) Bad Debts Expense and a credit to Allowance for Doubtful Accounts. 
C) Allowance for Doubtful Accounts and a credit to Accounts Receivable. 
D) Bad Debts Expense and a credit to Accounts Receivable.

Question 8

Under the allowance method for uncollectible accounts, bad debts expense is not recorded until a customer defaults.

Accepted Answer

A) True 
 B)False

Question 9

Interest is usually associated with

Accepted Answer

A) accounts receivable. 
B) notes receivable. 
C) doubtful accounts. 
D) bad debts. 
A) accounts receivable. 
B) notes receivable. 
C) doubtful accounts. 
D) bad debts.

Question 10

The account Allowance for Doubtful Accounts is necessary because

Accepted Answer

A) when recording bad debts expense, it is not possible to know which specific accounts will not be paid. 
B) uncollectible accounts that are written off must be accumulated in a separate account. 
C) a liability results when a credit sale is made. 
D) management needs to accumulate all the credit losses over the years. 
A) when recording bad debts expense, it is not possible to know which specific accounts will not be paid. 
B) uncollectible accounts that are written off must be accumulated in a separate account. 
C) a liability results when a credit sale is made. 
D) management needs to accumulate all the credit losses over the years.

Question 11

Under the allowance method for uncollectible accounts, the net realizable value of receivables is the same both before and after an account that had previously been written off is recovered.

Accepted Answer

A) True 
 B)False

Question 12

Interest on a 3-month, 3%, $20,000 note is calculated by multiplying $20,000 * 3% * 3.

Accepted Answer

A) True 
 B)False

Question 13

Use the following information for questions 
Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $12,000.The unadjusted balance for the Allowance for Doubtful Accounts is $2,000 credit.
-What is the balance in the Allowance for Doubtful Accounts account after adjustment?

Accepted Answer

A) $14,000 
B) $12,000 
C) $2,000 
D) $10,000 
A) $14,000 
B) $12,000 
C) $2,000 
D) $10,000

Question 14

The balance in Allowance for Doubtful Accounts would have a debit balance when

Accepted Answer

A) the percentage of receivables basis is used. 
B) an uncollectible account is later recovered. 
C) write offs during the year have been less than previous provisions. 
D) write offs during the year have exceeded previous provisions. 
A) the percentage of receivables basis is used. 
B) an uncollectible account is later recovered. 
C) write offs during the year have been less than previous provisions. 
D) write offs during the year have exceeded previous provisions.

Question 15

Under the aging method of estimating the allowance for doubtful accounts, the balance in the allowance account must be considered prior to adjusting for estimated uncollectible accounts.

Accepted Answer

A) True 
 B)False

Question 16

The normal balance and type of account for the Allowance for Doubtful Accounts is

Accepted Answer

A) debit, contra-asset. 
B) credit, asset. 
C) credit, revenue account. 
D) credit, contra-asset. 
A) debit, contra-asset. 
B) credit, asset. 
C) credit, revenue account. 
D) credit, contra-asset.

Question 17

Identify the types of receivables and record accounts receivable transactions.

Accepted Answer

Receivables can include accounts receiva

Question 18

The percentage of receivables basis of estimating uncollectible accounts ignores the existing balance in the allowance account when the bad debts adjusting entry is recorded.

Accepted Answer

A) True 
 B)False

Question 19

Net realizable value is determined by adding the Allowance for Doubtful Accounts to Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 20

Use the following information for questions 
Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $12,000.The unadjusted balance for the Allowance for Doubtful Accounts is $2,000 credit.
-What is the amount of bad debts expense for the year?

Accepted Answer

A) $14,000 
B) $12,000 
C) $2,000 
D) $10,000 
A) $14,000 
B) $12,000 
C) $2,000 
D) $10,000

A critical part of managing receivables is determining who should be extended credit and who should not.

When posting is up-to-date, the balance in the accounts receivable subsidiary ledger must equal the balance in the general ledger.

One might infer from a debit balance in Allowance for Doubtful Accounts that

When an account is written off using the allowance method for uncollectible accounts, the

The maturity date of a note is

Advances to employees are a type of accounts receivable.

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a debit to

Under the allowance method for uncollectible accounts, bad debts expense is not recorded until a customer defaults.

Interest is usually associated with

The account Allowance for Doubtful Accounts is necessary because

Under the allowance method for uncollectible accounts, the net realizable value of receivables is the same both before and after an account that had previously been written off is recovered.

Interest on a 3-month, 3%, $20,000 note is calculated by multiplying $20,000 * 3% * 3.

The balance in Allowance for Doubtful Accounts would have a debit balance when

Under the aging method of estimating the allowance for doubtful accounts, the balance in the allowance account must be considered prior to adjusting for estimated uncollectible accounts.

The normal balance and type of account for the Allowance for Doubtful Accounts is

Identify the types of receivables and record accounts receivable transactions.

The percentage of receivables basis of estimating uncollectible accounts ignores the existing balance in the allowance account when the bad debts adjusting entry is recorded.

Net realizable value is determined by adding the Allowance for Doubtful Accounts to Accounts Receivable.

Use the following information for questions Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $12,000.The unadjusted balance for the Allowance for Doubtful Accounts is $2,000 credit. -What is the amount of bad debts expense for the year?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters

Exam 8: Reporting and Analyzing Receivables

A critical part of managing receivables is determining who should be extended credit and who should not.

When posting is up-to-date, the balance in the accounts receivable subsidiary ledger must equal the balance in the general ledger.

One might infer from a debit balance in Allowance for Doubtful Accounts that

When an account is written off using the allowance method for uncollectible accounts, the

The maturity date of a note is

Advances to employees are a type of accounts receivable.

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a debit to

Under the allowance method for uncollectible accounts, bad debts expense is not recorded until a customer defaults.

Interest is usually associated with

The account Allowance for Doubtful Accounts is necessary because

Under the allowance method for uncollectible accounts, the net realizable value of receivables is the same both before and after an account that had previously been written off is recovered.

Interest on a 3-month, 3%, $20,000 note is calculated by multiplying $20,000 * 3% * 3.

The balance in Allowance for Doubtful Accounts would have a debit balance when

Under the aging method of estimating the allowance for doubtful accounts, the balance in the allowance account must be considered prior to adjusting for estimated uncollectible accounts.

The normal balance and type of account for the Allowance for Doubtful Accounts is

Identify the types of receivables and record accounts receivable transactions.

The percentage of receivables basis of estimating uncollectible accounts ignores the existing balance in the allowance account when the bad debts adjusting entry is recorded.

Net realizable value is determined by adding the Allowance for Doubtful Accounts to Accounts Receivable.

Use the following information for questions Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $12,000.The unadjusted balance for the Allowance for Doubtful Accounts is $2,000 credit. -What is the amount of bad debts expense for the year?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters