Accounting 210 midterm #2 chapter 5 – Flashcards

Which of the following is recorded upon receipt of a payment on April 7, 2015, by a customer who pays a $900 invoice dated March 3, 2015, with terms 2/10, n/60?

During 2015, Bears Inc. recorded credit sales of $500,000. Before adjustments at year-end, Bears has accounts receivable of $300,000, of which $50,000 is past due, and the allowance account had a credit balance of $2,500. Using the aging of receivables approach, what would be the adjustment assuming Bears expects it will not to collect 5% of the amount not yet past due and 20% of the amount past due?

Lightning uses the percentage-of-credit-sales method and estimates 1% of sales are uncollectible. What is the ending balance of the allowance account after the year-end adjustment? Allowance for uncollectible Acoounts 400 credit credit sales 60,000

Under the allowance method, which of the following does not change the balance in the Accounts Receivable account?

When customers purchase products on account, Spitz Manufacturing offers them a 2% reduction in the amount owed if they pay within 10 days. This is an example of:

Which accounting principle does the direct write-off method violate?

The percentage-of-credit-sales method for estimating uncollectible accounts is sometimes described as

Sandburg Veterinarian reports the following information for the year: Net Credit sales 120,00 Average accounts receivable 20,000 cash collections on credit sales 100,000 What is Sandurg's receivables turnover ratio?

Richard LLC accounts for possible bad debts using the allowance method. When an actual bad debt occurs, what effect does it have on the accounting equation?

On February 1, 2015, Middleton Corp. lends cash and accepts a $1,000 note receivable that offers 12% interest and is due in six months. How much interest revenue will Middleton Corp. report during 2015?

Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record this reduction by crediting Accounts Receivable and debiting

At the end of 2015, Murray State Lenders had a balance in its Allowance for Uncollectible Accounts of $4,500 (credit) before any adjustment. The company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method. Murray State's adjustment on December 31, 2015, to record its estimated uncollectible accounts included a:

Credit sales are recorded as:

Eric Company has the following information: Total revenues- $860,00 Sales Returns and allowances -$50,000 Sales Discounts- $30,00 Ending Inventory - $100,00 what is the amount of net revenues for Eric Company

Barton Health Services provided care to a patient worth $1,200. Because the patient was over the age of 65, Barton granted the patient a 20% discount and the customer paid the correct amount in cash. How would Barton record the service transaction?

A company provides services on account. Indicate how this transaction would affect the following five financial statement items:

A trade discount results in

On November 10 of the current year, Flores Mills provides services to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on November 17. How would Flores record the collection of cash on November 17?

On November 10 of the current year, Flores Mills provides services to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on December 5. How would Flores record the collection of cash on December 5?

Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. The price reduction is an example of a:

Which of the following is recorded by a credit to Accounts Receivable?

** Timkin creates the following accounts receivable aging report at the end of the year: Prior to adjusting entries, the Allowance for Uncollectible Accounts has a debit balance of $500. The year-end adjustment would include a:

collections of accounts receivable that previously have been written off are credited to

Toppleson Manufacturing reports a receivables turnover ratio of 14.5. The industry average is 10.7. What most likely is causing this difference?

When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write off the accounts using the allowance method?

Suppose that the balance of a company's Allowance for Uncollectible Accounts was $6,200 (credit) at the end of 2015, prior to any adjustments. The company estimated that the total of uncollectible accounts in its accounts receivable was $44,300 at the end of 2015. What amount of bad debt expense would appear in the company's 2015 income statement?

Garber Plumbers offers a 20% trade discount when providing $2,000 or more of plumbing services to its customers. In March 2015, Garber provided $4,000 of plumbing services to Red Oak, Inc. and $1,500 of services to Cyril, Inc. Each of these customers was granted credit terms of 2/10, net 30. If both customers paid for the plumbing services within the discount period, what was the net revenues figure for these two transactions?

Allowance for Uncollectible Accounts is:

At the end of 2015, Murray State Lenders had a balance in its Allowance for Uncollectible Accounts of $4,500 (debit) before any adjustment. The company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method. Murray State's adjustment on December 31, 2015, to record its estimated uncollectible accounts included a:

Lightning uses the aging method and estimates it will not collect 2% of accounts receivable not yet due, 10% of receivables less than 30 days past due, and 40% of receivables greater than 30 days past due. The accounts receivable balance of $7,000 consists of $3,500 not yet due, $2,000 less than 30 days past due, and $1,500 greater than 30 days past due. What is the appropriate amount of Bad Debt Expense?

On December 31, 2015, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $48,400 and $940, respectively. During 2016, Coolwear wrote off $820 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $1,140 at December 31, 2016. Bad debt expense for 2016 would be:

A company collects a customer's account within the discount period. Indicate how this transaction would affect the following five financial statement items:

On September 1, 2015, Middleton Corp. lends cash and accepts a $1,000 note receivable that offers 12% interest and is due in six months. How much interest revenue will Middleton Corp. report during 2016?

At December 31, Gill Co. reported accounts receivable of $238,000 and an allowance for uncollectible accounts of $600 (credit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:

Under the direct write-off method, what adjustment is made at the end of the year to account for possible future bad debts?

The direct write-off method is generally not permitted for financial reporting purposes because:

At the beginning of the year, Vici Ventures had accounts receivable of $220,000. At the end of the year, the company had accounts receivable of $340,000. During the year, Vici had total sales of $1,000,000, 70% of which were credit sales. What was Vici's receivables turnover ratio for the year?

At December 31, Amy Jo's Appliances had account balances in Accounts Receivable of $311,000 and $970 (debit) in Allowance for Uncollectible Accounts. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for the year should be:

When using an aging method for estimating uncollectible accounts

McConnell's Bakeries had the following balances on December 31, 2015, before any adjustment: Accounts Receivable = $100,000; Allowance for Uncollectible Accounts = $4,100 (credit). McConnell's estimates uncollectible accounts based on an aging of accounts receivable as shown below: What amount of bad debt expense did McConnell's record in its December 31, 2015, adjustment to the allowance account?

On July 8, Ray Inc. sold 100 printers to Office Rental Company at $600 each and offered a 2% discount for payment within 10 days. On July 15, Office Rental Company paid the full amount in cash. What should Ray Inc. record on July 15?

Accounts receivable are normally reported at the:

The primary difference between a note receivable and an account receivable is

Using the allowance method, writing off an actual bad debt would include a

Boynton Jewelers reported the following amounts at the end of the year: total sales = $550,000; sales discounts = $12,000; sales returns = $44,000; sales allowances = $17,000. What was the company's net revenues for the year?

A company collects an account receivable previously written off. Indicate how this transaction would affect the following five financial statement items"

Lindsey Corp. uses the percentage-of-credit-sales method and estimates that 2% of the credit sales are uncollectible. After the year-end adjustment, what amount of bad debt expense would Lindsey report for the year?

Oswego Clay Pipe Company provides services of $46,000 to Southeast Water District #45 on April 12 of the current year with terms 1/15, n/60. What would Oswego record on April 12?

On December 31, 2015, Mark Inc. estimates future bad debts to be $6,500. The Allowance for Uncollectible Accounts has a credit balance of $2,500 before any year-end adjustment. What adjustment should Mark Inc. record for the estimated bad debts on December 31, 2015?

Which method is not allowed under Generally Accepted Accounting Principles for the purpose of accounting for uncollectible accounts?