Question 1

The number of days' sales in receivables

Accepted Answer

A)   is an estimate of the length of time the receivables have been outstanding
B)   measures the number of times the receivables turn over each year
C)   is Net Credit Sales divided by Average Receivables
D)   is not meaningful and therefore is not usedE) A) and D)
F) A) and C)

Question 2

Other receivables include non trade receivables such as loans to company officers.

Accepted Answer

A) True 
 B)False

Question 3

When the allowance method for accounting for uncollectible receivables is used, net income is reduced when a specific receivable is written off.

Accepted Answer

A) True 
 B)False

Question 4

When referring to a note receivable or promissory note

Accepted Answer

A)   the maker is the party to whom the money is due.
B)   the note is not considered a formal credit instrument.
C)   the note cannot be factored to another party.
D)   the note may be used to settle an accounts receivable.E) A) and B)
F) A) and C)

Question 5

When using the allowance method to estimate uncollectible accounts receivable based on an analysis of receivables shows that $640 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $110. The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of:

Accepted Answer

A)   $110
B)   $640
C)   $530
D)   $750E) B) and D)
F) A) and C)

Question 6

Current assets are usually listed in order

Accepted Answer

A)   of the due date
B)   of the size
C)   alphabetically
D)   of liquidityE) A) and D)
F) B) and C)

Question 7

Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment) . The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $31,900. Which of the following adjusting entries is needed to record the Bad Debt Expense for the year?

Accepted Answer

A)   debit Bad Debt Expense, $34,200; credit Allowance for Doubtful Accounts, $34,200
B)   debit Allowance for Doubtful Accounts, $34,200; credit Bad Debt Expense, $34,200
C)   debit Allowance for Doubtful Accounts, $29,600; credit Bad Debt Expense, $29,600
D)   debit Bad Debt Expense, $29,600; credit Allowance for Doubtful Accounts, $29,600E) A) and D)
F) A) and C)

Question 8

Allowance for Doubtful Accounts is classified as a(n)  ______ and has a normal ______ balance.

Accepted Answer

A)   owners' equity, credit
B)   contra-asset, debit
C)   owners' equity, debit
D)   contra-asset, creditE) B) and C)
F) All of the above

Question 9

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

Accepted Answer

A)   Uncollectible Accounts Expense
B)   Accounts Receivable
C)   Allowance for Doubtful Accounts
D)   Interest ExpenseE) A) and B)
F) None of the above

Question 10

Given the following information, compute Accounts Receivable Turnover:

Accepted Answer

A)   6.75
B)   7.5
C)   6.13
D)   6.82E) None of the above
F) A) and D)

Question 11

Sunshine Service Center received a 120-day, 6% note for $40,000, dated April 12 from a customer on account.

Accepted Answer

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Question 12

When does an account become uncollectible?

Accepted Answer

A)   when accounts receivable is converted into notes receivable
B)   when discount is availed on notes receivable
C)   there is no general rule for when an account becomes uncollectible
D)   at the end of the fiscal yearE) B) and C)
F) B) and D)

Question 13

The following are the current assets from Hanes Co. as of December 31, 2014:
  Prepare the current asset section of the balance sheet.

Accepted Answer

Hanes Co.
Balance Sh...

Question 14

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

Accepted Answer

A)   a customer's account becomes past due.
B)   an account becomes bad and is written off.
C)   a sale is made.
D)   management estimates the amount of uncollectibles.E) All of the above
F) A) and D)

Question 15

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

Accepted Answer

A)   A credit to Bad Debt Expense
B)   A debit to Bad Debt Expense
C)   A debit to Allowance for Doubtful Accounts
D)   A credit to Allowance for Doubtful AccountsE) A) and C)
F) A) and B)

Question 16

The amount of the promissory note plus the interest earned on the due date is called the

Accepted Answer

A)   interest value
B)   maturity value
C)   face value
D)   issuance valueE) B) and D)
F) A) and D)

Question 17

Generally accepted accounting principles do normally allow the use of the direct write-off method of accounting for uncollectible accounts.

Accepted Answer

A) True 
 B)False

Question 18

List at least three things that indicate a receivable may be uncollectible.

Accepted Answer

1. The receivable is past due.
2. The cu...

Question 19

Trade receivables occur when two companies trade or exchange notes receivables.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 9: Receivables

Trade receivables occur when two companies trade or exchange notes receivables.

Correct Answer
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Correct Answer
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The following are the current assets from Hanes Co. as of December 31, 2014: Prepare the current asset section of the balance sheet.

Correct Answer
verified
Hanes Co.
Balance Sh...
View Answer

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

Correct Answer
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Current assets are usually listed in order

Correct Answer
verified

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

Correct Answer
verified

Other receivables include non trade receivables such as loans to company officers.

Correct Answer
verified

Sunshine Service Center received a 120-day, 6% note for $40,000, dated April 12 from a customer on account.

Correct Answer
verified
_TB2013_00 _TB2013_0...
View Answer

The amount of the promissory note plus the interest earned on the due date is called the

Correct Answer
verified

Allowance for Doubtful Accounts is classified as a(n) and has a normal balance.

Correct Answer
verified

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

Correct Answer
verified

When does an account become uncollectible?

Correct Answer
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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:

Correct Answer
verified

When referring to a note receivable or promissory note

Correct Answer
verified

List at least three things that indicate a receivable may be uncollectible.

Correct Answer
verified
1. The receivable is past due.
2. The cu...
View Answer

Correct Answer
verified

Given the following information, compute Accounts Receivable Turnover:

Correct Answer
verified

The number of days' sales in receivables

Correct Answer
verified

Generally accepted accounting principles do normally allow the use of the direct write-off method of accounting for uncollectible accounts.

Correct Answer
verified

When the allowance method for accounting for uncollectible receivables is used, net income is reduced when a specific receivable is written off.

Correct Answer
verified

Exam 9: Receivables

Trade receivables occur when two companies trade or exchange notes receivables.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The following are the current assets from Hanes Co. as of December 31, 2014: Prepare the current asset section of the balance sheet.

Correct AnswerverifiedHanes Co.Balance Sh...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Current assets are usually listed in order

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Other receivables include non trade receivables such as loans to company officers.

Correct AnswerverifiedShow Answer

Sunshine Service Center received a 120-day, 6% note for $40,000, dated April 12 from a customer on account.

Correct Answerverified_TB2013_00 _TB2013_0...View AnswerShow Answer

The amount of the promissory note plus the interest earned on the due date is called the

Correct AnswerverifiedShow Answer

Allowance for Doubtful Accounts is classified as a(n) ______ and has a normal ______ balance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When does an account become uncollectible?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When referring to a note receivable or promissory note

Correct AnswerverifiedShow Answer

List at least three things that indicate a receivable may be uncollectible.

Correct Answerverified1. The receivable is past due.2. The cu...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Given the following information, compute Accounts Receivable Turnover:

Correct AnswerverifiedShow Answer

The number of days' sales in receivables

Correct AnswerverifiedShow Answer

Generally accepted accounting principles do normally allow the use of the direct write-off method of accounting for uncollectible accounts.

Correct AnswerverifiedShow Answer

When the allowance method for accounting for uncollectible receivables is used, net income is reduced when a specific receivable is written off.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Hanes Co.
Balance Sh...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
_TB2013_00 _TB2013_0...
View Answer

Correct Answer
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Allowance for Doubtful Accounts is classified as a(n) and has a normal balance.

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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Correct Answer
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1. The receivable is past due.
2. The cu...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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