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Exam 8: Receivables

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Question 61

Multiple Choice

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Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment) ,and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000.Which of the following entries records the proper adjusting entry for bad debt expense?

A) debit Bad Debt Expense,$600;credit Allowance for Doubtful Accounts,$600
B) debit Bad Debt Expense,$12,400;credit Allowance for Doubtful Accounts,$12,400
C) debit Allowance for Doubtful Accounts,$600;credit Bad Debt Expense,$600
D) debit Bad Debt Expense,$13,600;credit Allowance for Doubtful Accounts,$13,600

E) A) and D)
F) A) and C)

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Question 62

Multiple Choice

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Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 3% of net credit sales.If net credit sales are $300,000,the amount of the adjusting entry to record the estimated uncollectible accounts receivables is

A) $8,500
B) -$8,500
C) $9,000
D) Cannot be determined

E) All of the above
F) A) and B)

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Question 63

Multiple Choice

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When a company uses the allowance method of accounting for uncollectible receivables,the entry to reinstate a previously written off account would include:

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a credit balance of $5,000.The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000.The amount to be recorded in the adjusting entry for the Bad Debt Expense is $45,000.

Allowance for Doubtful Accounts has a debit balance of $1,100 at the end of the year (before adjustment) ,and an analysis of customers' accounts indicates uncollectible receivables of $12,900.Which of the following entries records the proper adjustment for Bad Debt Expense?

The term "receivables" includes all

If the direct write-off method of accounting for uncollectible receivables is used,what general ledger account is debited to write off a customer's account as uncollectible?

When a note is received from a customer on account,it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

In accounting for uncollectible receivables,the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

When using the analysis of receivables method for estimating uncollectible receivables,the amount computed in the analysis is usually the amount that would be recorded in the end-of-period adjusting entry.

If the maker of a note fails to pay the debt on the due date,the note is said to be dishonored.

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

A 60-day,12% note for $7,000,dated April 15,is received from a customer on account.The face value of the note is

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

Discount Mart utilizes the allowance method of accounting for uncollectible receivables.On December 12th the company receives a $550 check from Chad Thomas in settlement of Thomas' $1,100 outstanding accounts receivable.Due to Thomas' failing health he is closing his company and is expecting to make no further payments to Discount Mart.Journalize this declaration.

When using the estimate based on sales method,the entry to record uncollectible accounts expense includes a credit to the Accounts Receivable account.

Under the direct write-off method of accounting for uncollectible accounts,Bad Debts Expense is debited

Other than accounts receivable and notes receivable,name other receivables that might be included in the general ledger.

The Lowery Co.uses the direct write-off method of accounting for uncollectible accounts receivable.Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible.The entry to write off this account would be which of the following?:

When accounting for uncollectible receivables and using the percentage of sales method,the matching principle is violated.