Question 1

The interest on a $7,000, 6%, 60-day note receivable is

Accepted Answer

A)  $35. 
B)  $420 
C)  $210. 
D)  $70. 
A)  $35. 
B)  $420 
C)  $210. 
D)  $70.

Question 2

Gipson Furniture factors $500,000 of receivables to Kwik Factors, Inc. Kwik Factors assesses a 3% service charge on the amount of receivables sold. Gipson Furniture factors its receivables regularly with Kwik Factors. What journal entry does Gipson make when factoring these receivables?

Accepted Answer

The answer of Gipson Furniture factors $500,000 of receivables to...

Question 3

An analysis and aging of the accounts receivable of Watts Company at December 31 reveal these data: $\begin{array}{lr}
\text { Accounts receivable } & \$ 2,400,000 \
\text { Allowance for doubtful accounts per books before adjustment (credit) } & 150,000 \
\text { Amounts expected to become uncollectible } & 195,000
\end{array}$ What is the cash realizable value of the accounts receivable at December 31 after adjustment?

Accepted Answer

A)  $2,055,000 
B)  $2,250,000 
C)  $2,400,000 
D)  $2,205,000 
A)  $2,055,000 
B)  $2,250,000 
C)  $2,400,000 
D)  $2,205,000

Question 4

A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services.

Accepted Answer

A) True 
 B)False

Question 5

Under the allowance method, Bad Debt Expense is recorded

Accepted Answer

A)  when an individual account is written off. 
B)  when the loss amount is known. 
C)  for an amount that the company estimates it will not collect. 
D)  several times during the accounting period. 
A)  when an individual account is written off. 
B)  when the loss amount is known. 
C)  for an amount that the company estimates it will not collect. 
D)  several times during the accounting period.

Question 6

Smithson Corporation's unadjusted trial balance includes the following balances (assume normal balances): $\begin{array}{ll}
\text { Accounts Receivable } & \$ 3,357,000 \
\text { Alowances for Doubtful Accounts } & \$ 63,900
\end{array}$ Bad debts are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record?

Accepted Answer

A)  $201,420 
B)  $137,520 
C)  $133,686 
D)  $205,254 
A)  $201,420 
B)  $137,520 
C)  $133,686 
D)  $205,254

Question 7

Hachey Company has accounts receivable of $95,100 at March 31, 2014. An analysis of the accounts shows these amounts.   Credit terms are 2/10, n/30. At March 31, 2014, there is a $2,500 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage of receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below  
 Instructions
(a) Determine the total estimated uncollectibles.
(b) Prepare the adjusting entry at March 31, 2014, to record bad debts expense.

Accepted Answer

The answer of Hachey Company has accounts receivable of $95,100...

Question 8

In a promissory note, the party to whom payment is to be made is called the maker.

Accepted Answer

A) True 
 B)False

Question 9

On January 15, Nifty Company sells merchandise on account to Martinez Associates for $3,000 with terms 3/10, n/30. On January 20, Martinez returns merchandise worth $600 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received?

Accepted Answer

A)  $2,400 
B)  $2,328 
C)  $2,310 
D)  $1,680 
A)  $2,400 
B)  $2,328 
C)  $2,310 
D)  $1,680

Question 10

Cash realizable value is determined by subtracting Allowance for Doubtful Accounts from Net Sales.

Accepted Answer

A) True 
 B)False

Question 11

Under the accounts receivable aging method, the balance in Allowance for Doubtful Accounts must be considered carefully prior to adjusting for estimated uncollectible accounts.

Accepted Answer

A) True 
 B)False

Question 12

Two methods can be used in accounting for uncollectible accounts. Identify and contrast the two methods. How do the methods differ regarding the time periods in which Bad Debt Expense is recognized?

Accepted Answer

The two methods used in accounting for u

Question 13

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 14

When using the allowance method year-end adjustments for bad debt expense must be made.

Accepted Answer

A) True 
 B)False

Question 15

When using the balance sheet approach, the balance in Allowance for Doubtful Accounts must be considered prior to the end of period adjustment when using which of the following methods?

Accepted Answer

A)  Net realizable method 
B)  Direct write-off method 
C)  Accrual method 
D)  Allowance method 
A)  Net realizable method 
B)  Direct write-off method 
C)  Accrual method 
D)  Allowance method

Question 16

Shafer Company has the following accounts in its general ledger at July 31: Accounts Receivable $49,000 and Allowance for Doubtful Accounts $3,400. During August, the following transactions occurred.
Aug. 15 Sold $30,000 of accounts receivable to More Factors, Inc. who assesses a 2% finance charge.
25 Made sales of $2,500 on Visa credit cards. The credit card service charge is 3%.
28 Made sales of $4,000 on Shafer credit cards.
Instructions
(a) Journalize the transactions.
(b) Indicate the statement presentation of service charges.

Accepted Answer

@#IMG-DLM& (b) Service Charge

Question 17

Using the allowance method, the uncollectible accounts for the year is estimated to be $40,000. If the balance for the Allowance for Doubtful Accounts is a $9,000 credit before adjustment, what is the amount of bad debt expense for the period?

Accepted Answer

A)  $9,000 
B)  $31,000 
C)  $40,000 
D)  $49,000 
A)  $9,000 
B)  $31,000 
C)  $40,000 
D)  $49,000

Question 18

Carson Company on July 15 sells merchandise on account to Tayler Co. for $2,000, terms 2/10, n/30. On July 20 Tayler Co. returns merchandise worth $800 to Carson Company. On July 24 payment is received from Tayler Co. for the balance due. What is the amount of cash received?

Accepted Answer

A)  $1,200 
B)  $1,176 
C)  $1,160 
D)  $2,000 
A)  $1,200 
B)  $1,176 
C)  $1,160 
D)  $2,000

Question 19

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

Accepted Answer

A)  total assets will be unchanged. 
B)  net income will decrease. 
C)  total assets will decrease. 
D)  total assets will increase. 
A)  total assets will be unchanged. 
B)  net income will decrease. 
C)  total assets will decrease. 
D)  total assets will increase.

Question 20

An aging schedule is prepared only for old accounts receivables that have been past due for more than one year.

Accepted Answer

A) True 
 B)False

The interest on a $7,000, 6%, 60-day note receivable is

Gipson Furniture factors $500,000 of receivables to Kwik Factors, Inc. Kwik Factors assesses a 3% service charge on the amount of receivables sold. Gipson Furniture factors its receivables regularly with Kwik Factors. What journal entry does Gipson make when factoring these receivables?

A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services.

Under the allowance method, Bad Debt Expense is recorded

Smithson Corporation's unadjusted trial balance includes the following balances (assume normal balances): Accounts Receivable \ 3,357,000 Alowances for Doubtful Accounts \ 63,900 Bad debts are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record?

In a promissory note, the party to whom payment is to be made is called the maker.

On January 15, Nifty Company sells merchandise on account to Martinez Associates for $3,000 with terms 3/10, n/30. On January 20, Martinez returns merchandise worth $600 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received?

Cash realizable value is determined by subtracting Allowance for Doubtful Accounts from Net Sales.

Under the accounts receivable aging method, the balance in Allowance for Doubtful Accounts must be considered carefully prior to adjusting for estimated uncollectible accounts.

Two methods can be used in accounting for uncollectible accounts. Identify and contrast the two methods. How do the methods differ regarding the time periods in which Bad Debt Expense is recognized?

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

When using the allowance method year-end adjustments for bad debt expense must be made.

When using the balance sheet approach, the balance in Allowance for Doubtful Accounts must be considered prior to the end of period adjustment when using which of the following methods?

Using the allowance method, the uncollectible accounts for the year is estimated to be $40,000. If the balance for the Allowance for Doubtful Accounts is a $9,000 credit before adjustment, what is the amount of bad debt expense for the period?

Carson Company on July 15 sells merchandise on account to Tayler Co. for $2,000, terms 2/10, n/30. On July 20 Tayler Co. returns merchandise worth $800 to Carson Company. On July 24 payment is received from Tayler Co. for the balance due. What is the amount of cash received?

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

An aging schedule is prepared only for old accounts receivables that have been past due for more than one 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 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

The interest on a $7,000, 6%, 60-day note receivable is

Gipson Furniture factors $500,000 of receivables to Kwik Factors, Inc. Kwik Factors assesses a 3% service charge on the amount of receivables sold. Gipson Furniture factors its receivables regularly with Kwik Factors. What journal entry does Gipson make when factoring these receivables?

A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services.

Under the allowance method, Bad Debt Expense is recorded

Smithson Corporation's unadjusted trial balance includes the following balances (assume normal balances): Accounts Receivable \ 3,357,000 Alowances for Doubtful Accounts \ 63,900 Bad debts are estimated to be 6% of outstanding receivables. What amount of bad debt expense will the company record?

In a promissory note, the party to whom payment is to be made is called the maker.

On January 15, Nifty Company sells merchandise on account to Martinez Associates for $3,000 with terms 3/10, n/30. On January 20, Martinez returns merchandise worth $600 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received?

Cash realizable value is determined by subtracting Allowance for Doubtful Accounts from Net Sales.

Under the accounts receivable aging method, the balance in Allowance for Doubtful Accounts must be considered carefully prior to adjusting for estimated uncollectible accounts.

Two methods can be used in accounting for uncollectible accounts. Identify and contrast the two methods. How do the methods differ regarding the time periods in which Bad Debt Expense is recognized?

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

When using the allowance method year-end adjustments for bad debt expense must be made.

When using the balance sheet approach, the balance in Allowance for Doubtful Accounts must be considered prior to the end of period adjustment when using which of the following methods?

Using the allowance method, the uncollectible accounts for the year is estimated to be $40,000. If the balance for the Allowance for Doubtful Accounts is a $9,000 credit before adjustment, what is the amount of bad debt expense for the period?

Carson Company on July 15 sells merchandise on account to Tayler Co. for $2,000, terms 2/10, n/30. On July 20 Tayler Co. returns merchandise worth $800 to Carson Company. On July 24 payment is received from Tayler Co. for the balance due. What is the amount of cash received?

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

An aging schedule is prepared only for old accounts receivables that have been past due for more than one 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 Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters