Question 1

When an account receivable that has been written off is subsequently collected, the account receivable must first be reinstated before recording the receipt of payment.

Accepted Answer

A) True 
 B)False  True

Question 2

Match each description to the appropriate term (a-i).
-Measures how frequently during the year accounts receivable are being turned into cash

Accepted Answer

A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging the receivables 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Notes receivable 
A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging the receivables 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Notes receivable A

Question 3

Journalize the following transactions using the allowance method of accounting for uncollectible receivables.?Apr. 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400.?June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.?Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment.

Accepted Answer

$\begin{array}{|c|l|c|c|}
\hline \text { Apr. } 1 & \text { Accounts Receivable } & 7,200 & \
\hline & \text { Sales } & & 7,200 \\hline\
\hline 1 & \text { Cost of Merchandise Sold } & 5,400 & \
\hline & \text { Merchandise Inventory } & & 5,400 \\hline\
\hline \text { June } 10 & \text { Cash } & 2,400 & \
\hline & \text { Allowance for Doubtful Accounts } & 4,800 & \
\hline & \text { Accounts Receivable-Jim Dobbs } & & 7,200 \\hline\
\hline \text { Oct. } 11 & \text { Accounts Receivable-Jim Dobbs } & 4,800 & \
\hline & \text { Allowance for Doubtful Accounts } & & 4,800 \\hline\
\hline 11 & \text { Cash } & 4,800 & \
\hline & \text { Accounts Receivable-Jim Dobbs } & & {4,800} \
\hline
\end{array}$

Question 4

At the end of the current year, Accounts Receivable has a balance of $90,000; Allowance for Doubtful Accounts has a credit balance of $850; and sales for the year total $300,000. Bad debt expense is estimated at 2.5% of sales.​Determine 
(a) the amount of the adjusting entry for uncollectible accounts; 
(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 5

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

Accepted Answer

A)  Uncollectible accounts are estimated to be $55,500. 
B)  Uncollectible accounts are estimated to be $111,000. 
C)  Bad debt expense is estimated to be $5,550. 
D)  Bad debt expense is estimated to be $11,100. 
A)  Uncollectible accounts are estimated to be $55,500. 
B)  Uncollectible accounts are estimated to be $111,000. 
C)  Bad debt expense is estimated to be $5,550. 
D)  Bad debt expense is estimated to be $11,100.

Question 6

The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for bad debt expense when using the

Accepted Answer

A)  allowance method based on aging the receivables 
B)  direct write-off method 
C)  accrual method 
D)  declining value method 
A)  allowance method based on aging the receivables 
B)  direct write-off method 
C)  accrual method 
D)  declining value method

Question 7

When the allowance method for accounting for uncollectible receivables is used, net income is reduced when a specific receivable is written off.

Accepted Answer

A) True 
 B)False

Question 8

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Accepted Answer

A)  $40,000 
B)  $40,400 
C)  $43,600 
D)  $44,000 
A)  $40,000 
B)  $40,400 
C)  $43,600 
D)  $44,000

Question 9

Match each description to the appropriate term (a-i).
-The difference between accounts receivable and allowance for doubtful accounts

Accepted Answer

A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging the receivables 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Notes receivable 
A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging the receivables 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Notes receivable

Question 10

When using the percent of sales method of estimating uncollectibles, the entry to record bad debt expense includes a credit to Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 11

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct regarding the entry to record estimated uncollectible receivables?

Accepted Answer

A)  Cash will be debited. 
B)  Bad Debt Expense will be credited. 
C)  Allowance for Doubtful Accounts will be credited. 
D)  Accounts Receivable will be debited. 
A)  Cash will be debited. 
B)  Bad Debt Expense will be credited. 
C)  Allowance for Doubtful Accounts will be credited. 
D)  Accounts Receivable will be debited.

Question 12

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables, a major difference is that the direct write-off method

Accepted Answer

A)  uses a percentage of sales to estimate uncollectible accounts 
B)  is used primarily by large companies with many receivables 
C)  is used primarily by small companies with few receivables 
D)  uses an allowance account 
A)  uses a percentage of sales to estimate uncollectible accounts 
B)  is used primarily by large companies with many receivables 
C)  is used primarily by small companies with few receivables 
D)  uses an allowance account

Question 13

The amount of the promissory note plus the interest earned on the due date is called the

Accepted Answer

A)  interest value 
B)  maturity value 
C)  face value 
D)  issuance value 
A)  interest value 
B)  maturity value 
C)  face value 
D)  issuance value

Question 14

Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write off this account, Dalton should debit

Accepted Answer

A)  Bad Debt Expense and credit Accounts Receivable 
B)  Bad Debt Expense and credit Allowance for Doubtful Accounts 
C)  Allowance for Doubtful Accounts and credit Accounts Receivable 
D)  Accounts Receivable and credit Allowance for Doubtful Accounts 
A)  Bad Debt Expense and credit Accounts Receivable 
B)  Bad Debt Expense and credit Allowance for Doubtful Accounts 
C)  Allowance for Doubtful Accounts and credit Accounts Receivable 
D)  Accounts Receivable and credit Allowance for Doubtful Accounts

Question 15

Match each description to the appropriate term (a-h).
-A note that is not paid when it is due

Accepted Answer

A) Face amount 
B) Term 
C) Interest 
D) Maturity value 
E) Dishonored note
F)Maker
G)Notes receivable
H)Interest rate 
A) Face amount 
B) Term 
C) Interest 
D) Maturity value 
E) Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Question 16

Journalize the following transactions 
(assume a 360-day year when calculating interest):Mar. 1Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.May 30The note of March 1 was dishonored.

Accepted Answer

None

Question 17

Match each description to the appropriate term (a-i).
-The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age

Accepted Answer

A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging the receivables 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Notes receivable 
A) Accounts receivable turnover 
B) Net realizable value 
C) Accounts receivable 
D) Aging the receivables 
E) Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Notes receivable

Question 18

The party promising to pay a note at maturity is the maker.

Accepted Answer

A) True 
 B)False

Question 19

When a note is written to settle an open account, no entry is necessary.

Accepted Answer

A) True 
 B)False

Question 20

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 the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance for Doubtful Accounts, respectively.​

Accepted Answer

A)  $19,500 and $25,000 
B)  $30,500 and $525,000 
C)  $19,500 and $525,000 
D)  $30,500 and $25,000 
A)  $19,500 and $25,000 
B)  $30,500 and $525,000 
C)  $19,500 and $525,000 
D)  $30,500 and $25,000

Exam 9: Receivables

When an account receivable that has been written off is subsequently collected, the account receivable must first be reinstated before recording the receipt of payment.

Match each description to the appropriate term (a-i). -Measures how frequently during the year accounts receivable are being turned into cash

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for bad debt expense when using the

When the allowance method for accounting for uncollectible receivables is used, net income is reduced when a specific receivable is written off.

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Match each description to the appropriate term (a-i). -The difference between accounts receivable and allowance for doubtful accounts

When using the percent of sales method of estimating uncollectibles, the entry to record bad debt expense includes a credit to Accounts Receivable.

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables, a major difference is that the direct write-off method

The amount of the promissory note plus the interest earned on the due date is called the

Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write off this account, Dalton should debit

Match each description to the appropriate term (a-h). -A note that is not paid when it is due

Journalize the following transactions (assume a 360-day year when calculating interest):Mar. 1Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.May 30The note of March 1 was dishonored.

Match each description to the appropriate term (a-i). -The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age

The party promising to pay a note at maturity is the maker.

When a note is written to settle an open account, no entry is necessary.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Long-Term Assets: Fixed and Intangible

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

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

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