Question 1

Two methods of accounting for uncollectible accounts are the

Accepted Answer

A)  allowance method and the accrual method. 
B)  allowance method and the net realizable method. 
C)  direct write-off method and the accrual method. 
D)  direct write-off method and the allowance method. 
A)  allowance method and the accrual method. 
B)  allowance method and the net realizable method. 
C)  direct write-off method and the accrual method. 
D)  direct write-off method and the allowance method.

Question 2

The direct write-off method of recognizing uncollectible accounts is not in accordance with good accounting practice.

Accepted Answer

A) True 
 B)False

Question 3

The interest on a $9,000, 10%, 1-year note receivable is

Accepted Answer

A)  $9,000. 
B)  $75. 
C)  $900. 
D)  $9,900. 
A)  $9,000. 
B)  $75. 
C)  $900. 
D)  $9,900.

Question 4

When an account is written off using the allowance method, the

Accepted Answer

A)  cash 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)  cash 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

Under the direct write-off method, no attempt is made to match bad debt expense to sales revenues in the same accounting period.

Accepted Answer

A) True 
 B)False

Question 6

The allowance method of accounting for bad debts violates the matching principle.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

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

Question 8

The Allowance for Doubtful Accounts is a liability account.

Accepted Answer

A) True 
 B)False

Question 9

Net credit sales for the month are $750,000. The accounts receivable balance is $160,000. The allowance is calculated as 5% of the receivables balance using the percentage-of-receivables basis. If the Allowance for Doubtful Accounts has a credit balance of $5,000 before adjustment, what is the balance after adjustment?

Accepted Answer

A)  $ 8,000 
B)  $ 3,000 
C)  $13,000 
D)  $ 8,250 
A)  $ 8,000 
B)  $ 3,000 
C)  $13,000 
D)  $ 8,250

Question 10

All of the following statements regarding the financial statement presentation of receivables are true except:

Accepted Answer

A)  Short-term receivables are reported in the current assets section of the balance sheet. 
B)  The gross amount of receivables less the allowance for doubtful accounts is equal to the net receivables. 
C)  Short-term receivables are reported above the short-term investments in the balance sheet. 
D)  Companies report bad debts expense under "Selling Expenses" in the operating expenses section of the income statement. 
A)  Short-term receivables are reported in the current assets section of the balance sheet. 
B)  The gross amount of receivables less the allowance for doubtful accounts is equal to the net receivables. 
C)  Short-term receivables are reported above the short-term investments in the balance sheet. 
D)  Companies report bad debts expense under "Selling Expenses" in the operating expenses section of the income statement.

Question 11

At the beginning of the current period, Emler Corp. had balances in Accounts Receivable of $200,000 and in Allowance for Doubtful Accounts of $9,000 (credit). During the period, it had net credit sales of $650,000 and collections of $590,000. It wrote off as uncollectible accounts receivable of $5,000. However, a $3,000 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $20,000 at the end of the period.
Instructions
(a) Prepare the entries to record sales and collections during the period.
(b) Prepare the entry to record the write-off of uncollectible accounts during the period.
(c) Prepare the entries to record the recovery of the uncollectible account during the period.
(d) Prepare the entry to record bad debts expense for the period.
(e) Determine the ending balances in Accounts Receivable and Allowance for Doubtful Accounts.
(f) Calculate the net realizable value of the receivables at the end of the period.

Accepted Answer

@#IMG-DLM& (e) @#IMG-DLM& (f) Net realiz

Question 12

Which permits partial derecognition of receivables?

Accepted Answer

The answer of Which permits partial derecognition of receivables? ...

Question 13

If an account is collected after having been previously written off

Accepted Answer

A)  the allowance account should be debited. 
B)  only the control account needs to be credited. 
C)  both income statement and balance sheet accounts will be affected. 
D)  there will be both a debit and a credit to accounts receivable. 
A)  the allowance account should be debited. 
B)  only the control account needs to be credited. 
C)  both income statement and balance sheet accounts will be affected. 
D)  there will be both a debit and a credit to accounts receivable.

Question 14

The term "receivables" refers to

Accepted Answer

A)  amounts due from individuals or companies. 
B)  merchandise to be collected from individuals or companies. 
C)  cash to be paid to creditors. 
D)  cash to be paid to debtors. 
A)  amounts due from individuals or companies. 
B)  merchandise to be collected from individuals or companies. 
C)  cash to be paid to creditors. 
D)  cash to be paid to debtors.

Question 15

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $34,000. If the balance of the Allowance for Doubtful Accounts is $9,000 debit before adjustment what is the amount of bad debt expense for that period?

Accepted Answer

A)  $34,000 
B)  $ 9,000 
C)  $43,000 
D)  $25,000 
A)  $34,000 
B)  $ 9,000 
C)  $43,000 
D)  $25,000

Question 16

The interest on a $5,000, 10%, 1-year note receivable is

Accepted Answer

A)  $5,000. 
B)  $500. 
C)  $5,500. 
D)  $5,450. 
A)  $5,000. 
B)  $500. 
C)  $5,500. 
D)  $5,450.

Question 17

Record the following transactions in general journal form for the Newell Company.
July 1 Received a $9,000, 8%, 3-month note, dated July 1, from Lois Patton in payment of her open account.
Oct. 1 Received notification from Lois Patton that she was unable to honor her note at this time. It is expected that Patton will pay at a later date.
Nov. 15 Received full payment from Lois Patton for note receivable previously dishonored.

Accepted Answer

The answer of Record the following transactions in general journal...

Question 18

Both the gross amount of receivables and the allowance for doubtful accounts should be reported in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

The two key parties to a promissory note are the

Accepted Answer

A)  maker and a bank. 
B)  debtor and the payee. 
C)  maker and the payee. 
D)  sender and the receiver. 
A)  maker and a bank. 
B)  debtor and the payee. 
C)  maker and the payee. 
D)  sender and the receiver.

Question 20

Bad Debt Expense is reported on the income statement as

Accepted Answer

A)  part of cost of goods sold. 
B)  an expense subtracted from net sales to determine gross profit. 
C)  an operating expense. 
D)  a contra revenue account. 
A)  part of cost of goods sold. 
B)  an expense subtracted from net sales to determine gross profit. 
C)  an operating expense. 
D)  a contra revenue account.

Two methods of accounting for uncollectible accounts are the

The direct write-off method of recognizing uncollectible accounts is not in accordance with good accounting practice.

The interest on a $9,000, 10%, 1-year note receivable is

When an account is written off using the allowance method, the

Under the direct write-off method, no attempt is made to match bad debt expense to sales revenues in the same accounting period.

The allowance method of accounting for bad debts violates the matching principle.

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

The Allowance for Doubtful Accounts is a liability account.

All of the following statements regarding the financial statement presentation of receivables are true except:

Which permits partial derecognition of receivables?

If an account is collected after having been previously written off

The term "receivables" refers to

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $34,000. If the balance of the Allowance for Doubtful Accounts is $9,000 debit before adjustment what is the amount of bad debt expense for that period?

The interest on a $5,000, 10%, 1-year note receivable is

Both the gross amount of receivables and the allowance for doubtful accounts should be reported in the balance sheet.

The two key parties to a promissory note are the

Bad Debt Expense is reported on the income statement as

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 Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

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Exam 8: Reporting and Analyzing Receivables

Two methods of accounting for uncollectible accounts are the

The direct write-off method of recognizing uncollectible accounts is not in accordance with good accounting practice.

The interest on a $9,000, 10%, 1-year note receivable is

When an account is written off using the allowance method, the

Under the direct write-off method, no attempt is made to match bad debt expense to sales revenues in the same accounting period.

The allowance method of accounting for bad debts violates the matching principle.

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

The Allowance for Doubtful Accounts is a liability account.

All of the following statements regarding the financial statement presentation of receivables are true except:

Which permits partial derecognition of receivables?

If an account is collected after having been previously written off

The term "receivables" refers to

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $34,000. If the balance of the Allowance for Doubtful Accounts is $9,000 debit before adjustment what is the amount of bad debt expense for that period?

The interest on a $5,000, 10%, 1-year note receivable is

Both the gross amount of receivables and the allowance for doubtful accounts should be reported in the balance sheet.

The two key parties to a promissory note are the

Bad Debt Expense is reported on the income statement as

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 Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters