Question 1

At the end of the current year, Accounts Receivable has a balance of $675,000; Allowance for Doubtful Accounts has a debit balance of $5,400; and net sales for the year total $3,000,000. An analysis of receivables indicates the uncollectible receivables are estimated to be $45,000.
Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,...

Question 2

Mr. Potts issued a 90-day, 7% note for $200,000, dated February 3rd to Valley Co. on account. (Assume a 360-day year when calculating interest.)
a. Determine the due date of the note.
b. Determine the interest.
c. Determine the maturity value of the note.
d. Journalize the entry to record the issuance of the note by Potts on Feb. 3.
e. Journalize the entry to record the receipt of payment of the note at maturity by Valley Co.

Accepted Answer

a. May 4

_TB2013_00...

Question 3

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables:
Feb 20 Received $1,000 from Andrew Warren and wrote off the remainder owed of $4,000 as uncollectible.
May 10 Reinstated the account of Andrew Warren and received $4,000 cash in full payment.

Accepted Answer

The answer of Journalize the following transactions using the direct...

Question 4

Fill in the blanks related to the characteristics of a promissory note:

Accepted Answer

1. maker
2...

Question 5

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

Accepted Answer

A)   affects only income statement accounts.
B)   is not an acceptable practice.
C)   affects only balance sheet accounts.
D)   affects both balance sheet and income statement accounts.E) None of the above
F) A) and B)

Question 6

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?

Accepted Answer

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, $13,600E) C) and D)
F) A) and C)

Question 7

A debit balance in the Allowance for Doubtful Accounts

Accepted Answer

A)   is the normal balance for that account.
B)   indicates that actual bad debt write-offs have been less than what was estimated.
C)   cannot occur if the percentage of receivables method of estimating bad debts is used.
D)   indicates that actual bad debt write-offs have exceeded previous provisions for bad debts.E) A) and B)
F) B) and C)

Question 8

Determine the due date and amount of interest due at maturity on the following notes:

Accepted Answer

The answer of Determine the due date and amount of...

Question 9

Discuss the two methods for recording bad-debt expense. What type of company uses each method?

Accepted Answer

The first method is the direct write-off...

Question 10

At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000.
Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,...

Question 11

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.

Accepted Answer

The answer of Discount Mart utilizes the allowance method of...

Question 12

The due date of a 60-day note dated July 10 is September 10.

Accepted Answer

A) True 
 B)False  False

Question 13

The balance of the Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

At the end of a period (before adjustment), Allowance for Doubtful Accounts has a debit balance of $500. Net credit sales for the period totaled $800,000. If bad debt expense is estimated at 1% of net credit sales, the amount of bad debt expense to be recorded in the adjusting entry is $8,500.

Accepted Answer

A) True 
 B)False

Question 15

At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $760. During the year, $120 of previously written-off accounts were reinstated and accounts totaling $740 are written-off as uncollectible. The end of the year balance (before adjustment)  in the Allowance for Doubtful Accounts should be

Accepted Answer

A)   $760
B)   $120
C)   $140
D)   $740E) A) and B)
F) A) and C) C

Question 16

If a promissory note is dishonored, the payee should still record interest revenue.

Accepted Answer

A) True 
 B)False

Question 17

A company uses the allowance method to account for uncollectible accounts receivables. When the firm writes off a specific customer's account receivable

Accepted Answer

A)   total current assets are reduced
B)   total expenses for the period are increased
C)   net realizable value of accounts receivable increases
D)   there is no effect on total current assets or total expensesE) B) and C)
F) B) and D)

Question 18

An aging of a company's accounts receivable indicates that estimate of the uncollectible accounts totals $4,000. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record the bad debt expense for the period will require a

Accepted Answer

A)   debit to Allowance for Doubtful Accounts for $3,200.
B)   debit to Bad Debt Expense for $3,200.
C)   debit to Allowance for Doubtful Accounts for $4,000.
D)   credit to Allowance for Doubtful Accounts for $4,000.E) A) and C)
F) B) and C)

Question 19

Two methods of accounting for uncollectible accounts are the

Accepted Answer

A)   direct write-off method and the allowance method.
B)   allowance method and the accrual method.
C)   allowance method and the net realizable method.
D)   direct write-off method and the accrual method.E) B) and C)
F) A) and B)

Question 20

Receivables currently collectible are reported in the investments section of the balance sheet.

Accepted Answer

A) True 
 B)False  True

Exam 9: Receivables

Correct Answer
verified

Correct Answer
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a. May 4
_TB2013_00...
View Answer

Correct Answer
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Fill in the blanks related to the characteristics of a promissory note:

Correct Answer
verified
1. maker
2...
View Answer

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

Correct Answer
verified

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?

Correct Answer
verified

A debit balance in the Allowance for Doubtful Accounts

Correct Answer
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Determine the due date and amount of interest due at maturity on the following notes:

Correct Answer
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Discuss the two methods for recording bad-debt expense. What type of company uses each method?

Correct Answer
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The first method is the direct write-off...
View Answer

Correct Answer
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Correct Answer
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The due date of a 60-day note dated July 10 is September 10.

Correct Answer
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False

The balance of the Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

Correct Answer
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At the end of a period (before adjustment), Allowance for Doubtful Accounts has a debit balance of $500. Net credit sales for the period totaled $800,000. If bad debt expense is estimated at 1% of net credit sales, the amount of bad debt expense to be recorded in the adjusting entry is $8,500.

Correct Answer
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Correct Answer
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C

If a promissory note is dishonored, the payee should still record interest revenue.

Correct Answer
verified

A company uses the allowance method to account for uncollectible accounts receivables. When the firm writes off a specific customer's account receivable

Correct Answer
verified

An aging of a company's accounts receivable indicates that estimate of the uncollectible accounts totals $4,000. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record the bad debt expense for the period will require a

Correct Answer
verified

Two methods of accounting for uncollectible accounts are the

Correct Answer
verified

Receivables currently collectible are reported in the investments section of the balance sheet.

Correct Answer
verified
True

Exam 9: Receivables

Correct AnswerverifiedShow Answer

Correct Answerverifieda. May 4 _TB2013_00...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Fill in the blanks related to the characteristics of a promissory note:

Correct Answerverified1. maker2...View AnswerShow Answer

Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

A debit balance in the Allowance for Doubtful Accounts

Correct AnswerverifiedShow Answer

Determine the due date and amount of interest due at maturity on the following notes:

Correct AnswerverifiedShow Answer

Discuss the two methods for recording bad-debt expense. What type of company uses each method?

Correct AnswerverifiedThe first method is the direct write-off...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The due date of a 60-day note dated July 10 is September 10.

Correct AnswerverifiedFalse

The balance of the Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

Correct AnswerverifiedShow Answer

At the end of a period (before adjustment), Allowance for Doubtful Accounts has a debit balance of $500. Net credit sales for the period totaled $800,000. If bad debt expense is estimated at 1% of net credit sales, the amount of bad debt expense to be recorded in the adjusting entry is $8,500.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

If a promissory note is dishonored, the payee should still record interest revenue.

Correct AnswerverifiedShow Answer

A company uses the allowance method to account for uncollectible accounts receivables. When the firm writes off a specific customer's account receivable

Correct AnswerverifiedShow Answer

An aging of a company's accounts receivable indicates that estimate of the uncollectible accounts totals $4,000. If Allowance for Doubtful Accounts has a $800 credit balance, the adjustment to record the bad debt expense for the period will require a

Correct AnswerverifiedShow Answer

Two methods of accounting for uncollectible accounts are the

Correct AnswerverifiedShow Answer

Receivables currently collectible are reported in the investments section of the balance sheet.

Correct AnswerverifiedTrue

Correct Answer
verified

Correct Answer
verified
a. May 4
_TB2013_00...
View Answer

Correct Answer
verified

Correct Answer
verified
1. maker
2...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The first method is the direct write-off...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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False

Correct Answer
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Correct Answer
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Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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True