Exam 8: Reporting and Analyzing Receivables

Finney had the following transactions during March 2012. 1. Finney sold and delivered $14,000 of merchandise to LJ Enterprises, terms 2/10, n30. 2. LJ Enterprises also ordered an additional $5,000 worth of goods on the last day of the month. 3. Finney lent $1,000 to its company president who promised to repay the loan on the 15^th day of the next month. 4. Finney sold old storage sheds to Alt Traders on 3/31. Alt Traders gave a $2,500 promissory note to Finney agreeing to pay for the sheds in 3 months. 5. Other current assets totaled $50,000. Finney received no cash arising from the above transactions during March. Based only on the above transactions, and ingnoring beginning balances, compute the percentage Accounts Receivable is of the total current assets as of month end.

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

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when

Your roommate is uncertain about the advantages of a promissory note. Compare the advantages of a note receivable with those of an account receivable.

In computing the maturity date of a note, the date the note is issued is included but the due date is omitted.

The following information is related to December 31, 2013 balances. - Accounts receivable \ 700,000 - Allowance for doubtful accounts (credit) (60,000) - Cash realizable value 640,000 During 2014 sales on account were $195,000 and collections on account were $115,000. Also, during 2014 the company wrote off $11,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $72,000. Bad debt expense for 2014 is:

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

Accounts receivable are the result of cash and credit sales.

Jenkins Company dishonors a note at maturity. What are the options available to the lender?

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 debit before adjustment, what is the amount of bad debt expense for the period?

Doane Company receives a $7,000, 3-month, 6% promissory note from Ray Company in settlement of an open accounts receivable. What entry will Doane Company make upon receiving the note?

A note receivable is a negotiable instrument which

The Garvey Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 6% of accounts receivable will eventually be uncollectible. Selected account balances at December 31, 2013, and December 31, 2014, appear below: 12/31/2013 12/31/2014 Net Credit Sales \ 400,000 \ 500,000 Accounts Receivable 80,000 100,000 Allowance for Doubtful Accounts 4,000 ? Instructions (a) Record the following events in 2014. Aug. 10 Determined that the account of Kurt West for $900 is uncollectible. Sept. 12 Determined that the account of Jill Lynch for $3,000 is uncollectible. Oct. 10 Received a check for $300 as payment on account from Kurt West, whose account had previously been written off as uncollectible. (b) Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2014. (c) What is the balance of Allowance for Doubtful Accounts at December 31, 2014?

When a note is dishonored, the payee's entry includes a

Bad Debt Expense is considered

IFRS sometimes refers to allowances as

IFRS requires loans and receivables to be recorded at

Which one of the following is not a principle of sound accounts receivable management?

In reviewing the accounts receivable, the cash receivable value is $21,000 before the write-off of a $1,500 account. What is the cash receivable value after the write-off?

A high accounts receivable turnover ratio indicates