Question 1

The carrying amount of accounts receivable

Accepted Answer

A) is the amount at which the receivables less the allowance for doubtful accounts are presented on the statement of financial position. 
B) reflects the sum of accounts receivable and the allowance for doubtful accounts. 
C) is the amount at which the receivables are presented on the statement of financial position. 
D) reflects management's estimate of the receivables that will ultimately not be collected after expected credit losses. 
A) is the amount at which the receivables less the allowance for doubtful accounts are presented on the statement of financial position. 
B) reflects the sum of accounts receivable and the allowance for doubtful accounts. 
C) is the amount at which the receivables are presented on the statement of financial position. 
D) reflects management's estimate of the receivables that will ultimately not be collected after expected credit losses. A

Question 2

Advances to employees are a type of accounts receivable.

Accepted Answer

A) True 
 B)False  False

Question 3

Under the allowance method for uncollectible accounts, when a specific account is written off

Accepted Answer

A) total assets are unchanged. 
B) net income is decreased. 
C) total assets decrease. 
D) total assets increase. 
A) total assets are unchanged. 
B) net income is decreased. 
C) total assets decrease. 
D) total assets increase. A

Question 4

The principal value of a note refers to the amount

Accepted Answer

A) that has been dishonoured. 
B) borrowed plus interest received at maturity from the maker. 
C) at which the note receivable is recorded. 
D) remaining after a service charge has been deducted. 
A) that has been dishonoured. 
B) borrowed plus interest received at maturity from the maker. 
C) at which the note receivable is recorded. 
D) remaining after a service charge has been deducted.

Question 5

If eventual collection is expected after a note has been dishonoured an accounts receivable replaces the note including any unpaid interest.

Accepted Answer

A) True 
 B)False

Question 6

The balance of the Allowance for Doubtful Accounts prior to making the adjusting entry to record Bad Debts Expense

Accepted Answer

A) is relevant when using the percentage of receivables basis. 
B) is relevant when debit card sales are made. 
C) is relevant when notes receivable are used. 
D) never shows a debit balance at this stage in the accounting cycle. 
A) is relevant when using the percentage of receivables basis. 
B) is relevant when debit card sales are made. 
C) is relevant when notes receivable are used. 
D) never shows a debit balance at this stage in the accounting cycle.

Question 7

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

Accepted Answer

A) True 
 B)False

Question 8

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 default. 
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 default. 
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 9

Allowance for Doubtful Accounts is credited when an account is determined to be uncollectible.

Accepted Answer

A) True 
 B)False

Question 10

A note receivable is a written promise by the maker to the payee to pay a specified amount of money at a definite time.

Accepted Answer

A) True 
 B)False

Question 11

You have just received notice that a customer with an Accounts Receivable balance of $500 has gone bankrupt and will not make any future payments.Assuming you use the allowance method for uncollectible accounts, the entry you make is to

Accepted Answer

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

Question 12

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 13

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 14

The total interest owing on a $10,000, 6%, 6-month note receivable is

Accepted Answer

A) $50. 
B) $100. 
C) $300. 
D) $600. 
A) $50. 
B) $100. 
C) $300. 
D) $600.

Question 15

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 16

Uncollectible notes receivable should be estimated at year end and recorded as a debit to Bad Debts Expense and a credit to Notes Receivable.

Accepted Answer

A) True 
 B)False

Question 17

Tabby Inc.lends Siamese Ltd.$50,000 on April 1, accepting a 3-month, 3% interest note.Interest is due the first of each month, commencing May 1.Tabby Inc.prepares financial statements on April 30.What adjusting entry should be made before the financial statements can be prepared?

Accepted Answer

The answer of Tabby Inc.lends Siamese Ltd.$50,000 on April 1,...

Question 18

Under the allowance method for uncollectible accounts, Bad Debts Expense is recorded

Accepted Answer

A) when an individual account is written off. 
B) when the amount of loss is known. 
C) for an amount that the company estimates as uncollectible. 
D) several times during the accounting period. 
A) when an individual account is written off. 
B) when the amount of loss is known. 
C) for an amount that the company estimates as uncollectible. 
D) several times during the accounting period.

Question 19

A note receivable is honoured when

Accepted Answer

A) it is written to settle an account. 
B) it is recorded at face value. 
C) the interest is accrued. 
D) it is paid in full on time. 
A) it is written to settle an account. 
B) it is recorded at face value. 
C) the interest is accrued. 
D) it is paid in full on time.

Question 20

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

Accepted Answer

A) True 
 B)False

The carrying amount of accounts receivable

Advances to employees are a type of accounts receivable.

Under the allowance method for uncollectible accounts, when a specific account is written off

The principal value of a note refers to the amount

If eventual collection is expected after a note has been dishonoured an accounts receivable replaces the note including any unpaid interest.

The balance of the Allowance for Doubtful Accounts prior to making the adjusting entry to record Bad Debts Expense

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

The account Allowance for Doubtful Accounts is necessary because

Allowance for Doubtful Accounts is credited when an account is determined to be uncollectible.

A note receivable is a written promise by the maker to the payee to pay a specified amount of money at a definite time.

You have just received notice that a customer with an Accounts Receivable balance of $500 has gone bankrupt and will not make any future payments.Assuming you use the allowance method for uncollectible accounts, the entry you make is to

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.

Interest is usually associated with

The total interest owing on a $10,000, 6%, 6-month note receivable is

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

Uncollectible notes receivable should be estimated at year end and recorded as a debit to Bad Debts Expense and a credit to Notes Receivable.

Tabby Inc.lends Siamese Ltd.$50,000 on April 1, accepting a 3-month, 3% interest note.Interest is due the first of each month, commencing May 1.Tabby Inc.prepares financial statements on April 30.What adjusting entry should be made before the financial statements can be prepared?

Under the allowance method for uncollectible accounts, Bad Debts Expense is recorded

A note receivable is honoured when

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

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 8: Reporting and Analyzing Receivables

The carrying amount of accounts receivable

Advances to employees are a type of accounts receivable.

Under the allowance method for uncollectible accounts, when a specific account is written off

The principal value of a note refers to the amount

If eventual collection is expected after a note has been dishonoured an accounts receivable replaces the note including any unpaid interest.

The balance of the Allowance for Doubtful Accounts prior to making the adjusting entry to record Bad Debts Expense

Uncollectible accounts must be estimated because it is not possible to know which accounts will not be collected.

The account Allowance for Doubtful Accounts is necessary because

Allowance for Doubtful Accounts is credited when an account is determined to be uncollectible.

A note receivable is a written promise by the maker to the payee to pay a specified amount of money at a definite time.

You have just received notice that a customer with an Accounts Receivable balance of $500 has gone bankrupt and will not make any future payments.Assuming you use the allowance method for uncollectible accounts, the entry you make is to

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.

Interest is usually associated with

The total interest owing on a $10,000, 6%, 6-month note receivable is

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

Uncollectible notes receivable should be estimated at year end and recorded as a debit to Bad Debts Expense and a credit to Notes Receivable.

Tabby Inc.lends Siamese Ltd.$50,000 on April 1, accepting a 3-month, 3% interest note.Interest is due the first of each month, commencing May 1.Tabby Inc.prepares financial statements on April 30.What adjusting entry should be made before the financial statements can be prepared?

Under the allowance method for uncollectible accounts, Bad Debts Expense is recorded

A note receivable is honoured when

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

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters