Exam 8: Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

North Co.uses the aging of accounts receivable method.The following information comes from its accounting records: What is the estimate of bad debt expense?

Adams Co.uses the allowance method of determining bad debt expense.It collects $250 from a customer that Adams had previously written-off.As a result of collecting this $250,its:

Countryside Corporation provides $6,000 worth of lawn care on account during the month.Experience suggests that about 2% of net credit sales will not be collected.To record the potential bad debts,Countryside Corporation would debit:

Assume the Hart Company uses the allowance method.When the company writes off a customer's account balance that has no chance of collection:

If the Allowance for Doubtful Accounts on January 1 equals $10,000 and during the year $9,000 of specific customers' accounts were written off,then its Allowance for Doubtful Accounts will have an unadjusted balance of:

A company uses the direct write-off method.The company writes off a $3,000 customer account balance when it becomes clear that the particular customer will never pay.What is the journal entry that would be prepared to record this write-off?

When a company lends cash to a customer who signs a promissory note:

XYZ Corp.uses the percentage of credit sales method in determining its bad debt expense.The following information comes from the accounting records of XYZ Corp.: What is the estimate of bad debt expense?

Katy Company uses the allowance method.Katy writes off a customer account balance when it becomes clear that the particular customer will never pay.How will this write-off affect the company's net income and accounts receivable turnover ratio?

IBM signs an agreement to lend one of its customers $200,000 to be repaid in one year at 5% interest.IBM would record this loan as:

The unadjusted trial balance at the end of the year includes the following: Both accounts have normal balances.The company uses the aging of accounts receivable method.Its estimate of uncollectible receivables resulting from the aging analysis equals $5,800.What is the amount of Bad Debt Expense to be recorded for the year?

What effect does the collection of a note receivable,excluding interest,have on the accounting equation?

The decision to sell to extend credit to customers will decrease wage costs.

If the Allowance for Doubtful Accounts has a $1,000 debit balance prior to making the end-of-period adjusting entry for bad debts,then it must mean that:

Notes Receivable differ from Accounts Receivable in that Notes Receivable:

Which method requires first estimating the desired amount for the Allowance for Doubtful Accounts and then determining the amount of the expense required to get to this desired balance given the amount of the unadjusted balance?

The selected financial information set forth below was summarized from the most recent income statements and balance sheets of the Pixel Company. Required: Part a.Determine the company's receivables turnover during Years 2 and 3. Part b.Determine the company's days to collect during Years 2 and 3. Part c.Interpret the results of this analysis.

When the direct write-off method is used,the entry to write-off a specific account would:

On December 31,2015,Infinity Inc.records an adjusting entry to accrue interest on a note.On January 31,2016,Infinity receives a check for $4,680,which represents two months of accumulated interest on the note.Upon receipt of this interest payment,Infinity should debit:

The Allowance for Doubtful Accounts account is a temporary account which is closed to Retained Earnings at the end of the accounting period.