Exam 15: Accounts Receivable and Uncollectible Accounts

At the end of the current year, the trial balance of Kerry Hardware included the accounts and balances shown below. Credit sales were $7,000,000. Returns and allowances on these sales were $55,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. Accounts Receivable \ 650,000 Allowance for Doubtful Accounts 4,500 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

On December 31, prior to adjustment, Allowance for Doubtful Accounts has a debit balance of $400. An aging of the accounts receivable produces an estimate of $2,600 of probable losses from uncollectible accounts. The adjusting entry needed to record the estimated losses from uncollectible accounts is made for

A firm reported net credit sales of $450,000 during the year and has a balance of $40,000 in its Accounts Receivable account at year-end. Prior to adjustments, Allowance for Doubtful Accounts has a debit balance of $200. The firm estimates its losses from uncollectible accounts to be one-half of 1 percent of net credit sales. The entry to record the estimated losses from uncollectible accounts will include a credit to Allowance for Doubtful Accounts for

At the end of the current year, the trial balance of Diane's Dress Shop included the accounts and balances shown below. Credit sales were $9,200,000. Returns and allowances on these sales were $55,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. Accounts Receivable \ 1,300,000 Allowance for Doubtful Accounts 9,000 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

Allowance for Doubtful Accounts is a liability account.

When there is a partial collection of a balance previously written off, the reinstatement entry will be for the entire amount of the write-off.

The estimated loss from uncollectible accounts for the year will be __________________ if the firm has net sales of $400,000 for the year and bases its estimate of loss on 0.6 percent of net sales.

Allowance for Doubtful Accounts has a credit balance of $1,100 at the end of the year, before adjustments. Sales for the year amounted to $760,000, sales discounts amounted to $12,000 and sales returns and allowances amounted to $36,000. If the uncollectible accounts expense is estimated at 2% of net sales, the amount of the adjusting entry to record the estimated losses from uncollectible accounts will be

Allowance for Doubtful Accounts is called a(n) ____________________ account because it literally reappraises the accounts receivable to reflect reasonable expectations.

At the end of the current year, the trial balance of Tracey's Consulting Services included the accounts and balances shown below. Credit sales were $90,000. Returns and allowances on these sales were $1,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. Accounts Receivable \ 18,000 Allowance for Doubtful Accounts 500 . Sales 145,000 . Sales Returns and Allowances 2,000 . 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

The balance of the Accounts Receivable account is usually ____________________ when the direct charge-off method of recording losses from uncollectible accounts is used.

On December 31, prior to adjustment, Allowance for Doubtful Accounts has a debit balance of $800. An aging of the accounts receivable produces an estimate of $5,200 of probable losses from uncollectible accounts. The adjusting entry needed to record the estimated losses from uncollectible accounts is made for

When an account that was written off is later collected, it takes _____________________ entries to record the transaction.

The method of accounting for losses from uncollectible accounts that produces a proper valuation of the accounts receivable on the balance sheet is

A firm using the allowance method to provide for losses from uncollectible accounts collected the cash due from a customer whose account was previously written off. The entry to reinstate the customer's account included a credit to

At the end of the current year, the trial balance of Cary's Craft Shop included the accounts and balances shown below. Credit sales were $290,000. Returns and allowances on these sales were $4,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.3 percent of net credit sales. Accounts Receivable \ 36,000 Allowance for Doubtful Accounts 1,000 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

Match the accounting terms with the description by entering the proper number.

Which of the following statements is not correct?

When a firm uses the allowance method to provide for losses for uncollectible accounts, the collection of an account previously written off as uncollectible requires an entry to

At the end of the current year, the trial balance of Aaron's Kitchen Supply Corporation included the accounts and balances shown below. Credit sales were $4,600,000. Returns and allowances on these sales were $27,500. Assume that the firm bases its estimate of the loss from uncollectible accounts on 4 percent of accounts receivable. Accounts Receivable \ 650,000. Allowance for Doubtful Accounts 4,500. Sales 7,000,000. Sales Returns and Allowances 55,000. 1. What is the balance in the Allowance for Doubtful Accounts account after the adjusting entry for the estimated loss from uncollectible accounts is posted? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?