Deck 14: Uncollectible Accounts Receivable

Question 1

The allowance method of accounting for uncollectible accounts does not comply with generally accepted accounting principles.

Answer 1

False

Question 2

When a customer account is written off under the allowance method, the book value of accounts receivable decreases.

Answer 2

False

Question 3

A note provides a business with legal evidence of a debt in the event it becomes necessary to go to court to collect.

Answer 3

True

Question 4

Total assets are reduced when a business accepts a note receivable from a customer needing an extension of time to pay an account receivable.

Question 5

The book value of accounts receivable must be a reasonable and unbiased estimate of the money the business expects to collect in the future.

Question 6

The accounting concept Neutrality is applied when the process of making accounting estimates is free from bias.

Question 7

The expense of an uncollectible account should be recorded in the accounting period that the account becomes uncollectible.

Question 8

The account Allowance for Uncollectible Accounts has a natural credit balance.

Question 9

A business usually knows at the end of the fiscal year which customer accounts will become uncollectible.

Question 10

The account Allowance for Uncollectible Accounts is reported on the income statement.

Question 11

The percent of each age group of an accounts receivable aging that is expected to become uncollectible is determined by generally accepted accounting principles.

Question 12

The adjusting entry for uncollectible accounts reduces the balance of the Accounts Receivable account.

Question 13

A business having a $400.00 debit balance in Allowance for Uncollectible Accounts and estimating its uncollectible accounts using accounts receivable aging to be $5,000.00 would record a $5,400.00 credit to Allowance for Uncollectible Accounts.

Question 14

Interest rates are stated as a percentage of the principal.

Question 15

Interest income is classified as revenue from normal operations.

Question 16

When using the allowance method, writing off an uncollectible account does not change the net realizable value of accounts receivable.

Question 17

The direct write-off method matches the expense of uncollectible accounts to the revenue that is earned in the same period.

Question 18

Select the one term that best fits each definition

-Crediting the estimated value of uncollectible accounts to a contra account.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 19

Select the one term that best fits each definition

-The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 20

Select the one term that best fits each definition

-The difference between an asset's account balance and its related contra account.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 21

Select the one term that best fits each definition

-The amount of accounts receivable a business expects to collect.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 22

Select the one term that best fits each definition

-A method used to estimate uncollectible accounts receivable that assumes a percent of credit sales will become uncollectible.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 23

Select the one term that best fits each definition

-A method that uses an analysis of accounts receivable to estimate the amount that will be uncollectible.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 24

Select the one term that best fits each definition

-Analyzing accounts receivable according to when they are due.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 25

Select the one term that best fits each definition

-Canceling the balance of a customer account because the customer does not pay.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 26

Select the one term that best fits each definition

-A written and signed promise to pay a sum of money at a specified time.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 27

Select the one term that best fits each definition

-A promissory note signed by a business and given to a creditor.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 28

Select the one term that best fits each definition

-A promissory note that a business accepts from a customer.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 29

Select the one term that best fits each definition

-The person or business that signs a note and thus promises to make payment.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 30

Select the one term that best fits each definition

-The person or business to whom the amount of a note is payable.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 31

Select the one term that best fits each definition

-The original amount of a note, sometimes referred to as the face amount.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 32

Select the one term that best fits each definition

-The percentage of the principal that is due for the use of the funds secured by a note.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 33

Select the one term that best fits each definition

-The date on which the principal of a note is due to be repaid.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 34

Select the one term that best fits each definition

-The length of time from the signing date of a note to the maturity date.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 35

Select the one term that best fits each definition

-The amount that is due on the maturity date of a note.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 36

Select the one term that best fits each definition

-The interest earned on money loaned.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account

Question 37

Select the one term that best fits each definition

-A note that is not paid when due.

A) aging of accounts receivable
B) allowance method
C) book value
D) book value of accounts receivable
E) dishonored note
F) interest income
G) interest rate
H) maker of a note
I) maturity date
J) maturity value
K) net realizable value
L) note payable
M) note receivable
N) payee
O) percent of accounts receivable method
P) percent of sales method
Q) principal
R) promissory note
S) time of a note
T) writing off an account