Question 1

Accounts receivable are valued and reported on the statement of financial position

Accepted Answer

A)  in the non-current asset section. 
B)  at the gross amount less sales returns and allowances. 
C)  at carrying amount. 
D)  only if they are not past due. 
A)  in the non-current asset section. 
B)  at the gross amount less sales returns and allowances. 
C)  at carrying amount. 
D)  only if they are not past due.

Question 2

Prepare journal entries to record the following transactions entered into by Bluenote Corporation:

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 3

Both accounts receivable and notes receivable represent claims that are expected to be collected in cash.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

For their fiscal year ended December 31, 2017, the Texas Tech Store had credit sales of $750,000. At year end, the unadjusted trial balance shows a debit balance of $1,800 in the Allowance for Doubtful Accounts, and $140,000 in Accounts Receivable. The credit manager prepared an aging schedule of accounts receivable and estimates that $5,200 will prove to be uncollectible.On March 4, 2018 the credit manager authorizes a write off of the $2,000 balance owed by Crystal Rivers.Instructions
a. Prepare the adjusting entry to record the estimated bad debts expense for 2017.
b. Show the statement of financial position presentation of accounts receivable at December 31, 2017.
c. On March 4, 2018, before the write off, assume the balance of Accounts Receivable account is $175,000 and the balance of Allowance for Doubtful Accounts is a credit of $5,500. Record the entry to write off the Rivers account. Also, show the statement of financial position presentation of accounts receivable before and after the write off.

Accepted Answer

The answer of For their fiscal year ended December 31,...

Question 7

A receivable is recognized

Accepted Answer

A)  when the sales effort is substantially complete. 
B)  regardless of collection risk. 
C)  only when payment has been received. 
D)  when a service is performed. 
A)  when the sales effort is substantially complete. 
B)  regardless of collection risk. 
C)  only when payment has been received. 
D)  when a service is performed.

Question 8

An aging of a company's accounts receivable indicates that $4,200 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record bad debts for the period will require a

Accepted Answer

A)  debit to Bad Debts Expense for $4,200. 
B)  debit to Allowance for Doubtful Accounts for $3,400. 
C)  debit to Bad Debts Expense for $3,400. 
D)  credit to Allowance for Doubtful Accounts for $5,000. 
A)  debit to Bad Debts Expense for $4,200. 
B)  debit to Allowance for Doubtful Accounts for $3,400. 
C)  debit to Bad Debts Expense for $3,400. 
D)  credit to Allowance for Doubtful Accounts for $5,000.

Question 9

If the amount of bad debts expense is understated at year end, then

Accepted Answer

A)  net income will be understated. 
B)  shareholders' equity will be understated. 
C)  Allowance for Doubtful Accounts will be overstated. 
D)  net Accounts Receivable will be overstated. 
A)  net income will be understated. 
B)  shareholders' equity will be understated. 
C)  Allowance for Doubtful Accounts will be overstated. 
D)  net Accounts Receivable will be overstated.

Question 10

Atlas Inc. borrowed money from a bank and is therefore regarded as the payee.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  carrying amount 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)  carrying amount 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 12

An inexperienced accountant made the following entries. In each case, the explanation to the entry is correct.   InstructionsPrepare the correcting entries.

Accepted Answer

The answer of An inexperienced accountant made the following entries....

Question 13

Brinkley Corporation uses the perpetual inventory system and the allowance method for estimating uncollectible accounts.InstructionsPrepare entries to record the following transactions for a company that uses the perpetual inventory method:Jan 5 Sold merchandise to Amy Ward for $1,500, terms n/15. The merchandise cost $900.Apr 15 Received partial payment of $500 from Amy Ward.Aug 21 Wrote off as uncollectible the balance of the Amy Ward account when she declared bankruptcy.Oct 5 Received a cheque for $350 from Amy Ward. No further collections are expected.

Accepted Answer

The answer of Brinkley Corporation uses the perpetual inventory system...

Question 14

Notes or accounts receivables that result from sales transactions are often called

Accepted Answer

A)  sales receivables. 
B)  nontrade receivables. 
C)  trade receivables. 
D)  merchandise receivables. 
A)  sales receivables. 
B)  nontrade receivables. 
C)  trade receivables. 
D)  merchandise receivables.

Question 15

previously written off accounts of $4,000 were collected (in addition to the "regular" collections).Instructions
a. Record the 2018 transactions.
b. If the company uses the percentage of receivables basis to estimate bad debts expense and determines that uncollectible accounts are expected to be 5% of accounts receivable, prepare the adjusting entry for bad debts expense at December 31, 2018.

Accepted Answer

The answer of previously written off accounts of $4,000 were...

Question 16

Accounts receivable can be the result of either cash or credit sales.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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

Question 18

Alvira Inc. often requires customers to sign notes for major credit purchases. Record the following transactions for Alvira:Feb 12 Accepted a $42,000, 4%, 2-month note from John Doe for a 19-foot motorboat built to his specifications. Interest is due at maturity. The company uses the periodic inventory method.Apr 14 Received notification from John Doe that he was unable to honour his note but that he expects to pay the amount owed next month.May 26 Received a cheque from John Doe for the total amount owed.Jun 1 Received notification by the bank that John Doe's cheque was being returned "NSF" and that Mr. Doe had declared personal bankruptcy.

Accepted Answer

The answer of Alvira Inc. often requires customers to sign...

Question 19

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 not be paid. 
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 not be paid. 
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 20

The account Allowance for Doubtful Accounts is classified as a(n)

Accepted Answer

A)  liability. 
B)  contra account to Bad Debts Expense. 
C)  expense. 
D)  contra account to Accounts Receivable. 
A)  liability. 
B)  contra account to Bad Debts Expense. 
C)  expense. 
D)  contra account to Accounts Receivable.

Accounts receivable are valued and reported on the statement of financial position

Prepare journal entries to record the following transactions entered into by Bluenote Corporation:

Both accounts receivable and notes receivable represent claims that are expected to be collected in cash.

The term "receivables" refers to

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

A receivable is recognized

An aging of a company's accounts receivable indicates that $4,200 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record bad debts for the period will require a

If the amount of bad debts expense is understated at year end, then

Atlas Inc. borrowed money from a bank and is therefore regarded as the payee.

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

An inexperienced accountant made the following entries. In each case, the explanation to the entry is correct. InstructionsPrepare the correcting entries.

Notes or accounts receivables that result from sales transactions are often called

Accounts receivable can be the result of either cash or credit sales.

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

The account Allowance for Doubtful Accounts is necessary because

The account Allowance for Doubtful Accounts is classified as a(n)

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

Accounts receivable are valued and reported on the statement of financial position

Prepare journal entries to record the following transactions entered into by Bluenote Corporation:

Both accounts receivable and notes receivable represent claims that are expected to be collected in cash.

The term "receivables" refers to

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

A receivable is recognized

An aging of a company's accounts receivable indicates that $4,200 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record bad debts for the period will require a

If the amount of bad debts expense is understated at year end, then

Atlas Inc. borrowed money from a bank and is therefore regarded as the payee.

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

An inexperienced accountant made the following entries. In each case, the explanation to the entry is correct. InstructionsPrepare the correcting entries.

Notes or accounts receivables that result from sales transactions are often called

Accounts receivable can be the result of either cash or credit sales.

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

The account Allowance for Doubtful Accounts is necessary because

The account Allowance for Doubtful Accounts is classified as a(n)

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