Question 1

Tanning Company analyzes its receivables to estimate bad debt expense.The accounts receivable balance is $390,000 and credit sales are $1,300,000.An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible.What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

Accepted Answer

A)  Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000
B)  Bad Debt Expense 19,500 Allowance for Doubtful Accounts 19,500
C)  Bad Debt Expense 22,000 Allowance for Doubtful Accounts 22,000
D)  Bad Debt Expense 65,000 Allowance for Doubtful Accounts 65,000E) A) and B)
F) None of the above

Question 2

At the end of the current year,Accounts Receivable has a balance of $750,000;Allowance for Doubtful Accounts has a debit balance of $6,200;and net sales for the year total $3,500,000.Bad debt expense is estimated at 1/2 of 1% of net sales.
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,Accounts...

Question 3

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 D)
F) A) and B)

Question 4

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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) B) and C)

Question 7

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

Accepted Answer

A) True 
 B)False

Question 8

Lone Star Company received a 90-day,6% note for $80,000,dated March 12 from a customer on account.(Assume a 360-day year when calculating interest. )

Accepted Answer

The answer of Lone Star Company received a 90-day,6% note...

Question 9

When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Accepted Answer

A)  Bad Debt Expense 500 Allowance for Doubtful Accounts 500
B)  Bad Debt Expense 500 Accounts Receivable - Bob Smith 500
C)  Cash 300 Allowance for Doubtful Accounts 200Accounts Receivable - Bob Smith 500
D)  Cash 500 Accounts Receivable - Bob Smith 500E) B) and C)
F) C) and D)

Question 10

The interest on a 6%,60-day note for $5,000 is $300.

Accepted Answer

A) True 
 B)False

Question 11

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 4% of net credit sales.If net credit sales are $800,000,the amount of the adjusting entry to record the estimate of the uncollectible accounts is

Accepted Answer

A)  $29,500
B)  $34,500
C)  $32,000
D)  cannot be determinedE) None of the above
F) All of the above

Question 12

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,Accounts...

Question 13

On the balance sheet,the amount shown for the Allowance for Doubtful Accounts is equal to the

Accepted Answer

A)  Uncollectible accounts expense for the year
B)  total of the accounts receivables written-off during the year
C)  total estimated uncollectible accounts as of the end of the year
D)  sum of all accounts that are past due.E) A) and D)
F) All of the above

Question 14

Financial Statement data for the years ended December 31 for Parker Corporation is as follows:
2012 2011
Net Sales $2,595,600 $2,409,500
Accounts Receivable
Beginning of the year $ 390,000 $400,000
End of the year 434,000 390,000
a)Determine the accounts receivable turnover for 2012 and 2011.
b)Determine the number of days' sales in receivables for 2012 and 2011.
c)Does the change in accounts receivable turnover and number of days' sales in receivables from 2011 to 2012 indicate a favorable or unfavorable trend.?

Accepted Answer

a)Accounts receivable turnover:
2012 201...

Question 15

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a debit balance of $2,000.The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $15,000.The amount to be recorded in the adjusting entry for the bad debt expense is $15,000.

Accepted Answer

A) True 
 B)False

Question 16

When an account receivable that has been written off is subsequently collected,the account receivable is said to be reinstated.

Accepted Answer

A) True 
 B)False

Question 17

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

Accepted Answer

A)  will increase net income in the period it is collected.
B)  will decrease net income in the period it is collected.
C)  does not affect net income in the period it is collected.
D)  requires a correcting entry for the period in which the account was written off.E) B) and D)
F) None of the above

Question 18

Notes or accounts receivables that result from sales transactions are often called

Accepted Answer

A)  non-trade receivables.
B)  trade receivables.
C)  merchandise receivables.
D)  sales receivables.E) B) and D)
F) A) and D)

Question 19

The balance in the Allowance for Doubtful Accounts account at the end of the year includes the total of all accounts written-off since the beginning year.

Accepted Answer

A) True 
 B)False

Question 20

When companies sell their receivables to other companies,the transaction is called factoring.

Accepted Answer

A) True 
 B)False

Exam 8: Receivables

When companies sell their receivables to other companies,the transaction is called factoring.

Correct Answer
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Correct Answer
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The interest on a 6%,60-day note for $5,000 is $300.

Correct Answer
verified

Correct Answer
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When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Correct Answer
verified

When an account receivable that has been written off is subsequently collected,the account receivable is said to be reinstated.

Correct Answer
verified

On the balance sheet,the amount shown for the Allowance for Doubtful Accounts is equal to the

Correct Answer
verified

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

Correct Answer
verified

Two methods of accounting for uncollectible accounts are the

Correct Answer
verified

Notes or accounts receivables that result from sales transactions are often called

Correct Answer
verified

Correct Answer
verified
a)Accounts receivable turnover:
2012 201...
View Answer

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

Correct Answer
verified

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 4% of net credit sales.If net credit sales are $800,000,the amount of the adjusting entry to record the estimate of the uncollectible accounts is

Correct Answer
verified

Correct Answer
verified

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

Correct Answer
verified

Correct Answer
verified

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

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

The balance in the Allowance for Doubtful Accounts account at the end of the year includes the total of all accounts written-off since the beginning year.

Correct Answer
verified

Lone Star Company received a 90-day,6% note for $80,000,dated March 12 from a customer on account.(Assume a 360-day year when calculating interest. )

Correct Answer
verified

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

Correct Answer
verified

Exam 8: Receivables

When companies sell their receivables to other companies,the transaction is called factoring.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The interest on a 6%,60-day note for $5,000 is $300.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Correct AnswerverifiedShow Answer

When an account receivable that has been written off is subsequently collected,the account receivable is said to be reinstated.

Correct AnswerverifiedShow Answer

On the balance sheet,the amount shown for the Allowance for Doubtful Accounts is equal to the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Two methods of accounting for uncollectible accounts are the

Correct AnswerverifiedShow Answer

Notes or accounts receivables that result from sales transactions are often called

Correct AnswerverifiedShow Answer

Correct Answerverifieda)Accounts receivable turnover:2012 201...View AnswerShow Answer

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

Correct AnswerverifiedShow Answer

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 4% of net credit sales.If net credit sales are $800,000,the amount of the adjusting entry to record the estimate of the uncollectible accounts is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

Correct AnswerverifiedShow Answer

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

The balance in the Allowance for Doubtful Accounts account at the end of the year includes the total of all accounts written-off since the beginning year.

Correct AnswerverifiedShow Answer

Lone Star Company received a 90-day,6% note for $80,000,dated March 12 from a customer on account.(Assume a 360-day year when calculating interest. )

Correct AnswerverifiedShow Answer

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

Correct AnswerverifiedShow 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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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
verified
a)Accounts receivable turnover:
2012 201...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
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