question

A note receivable due in 18 months is listed on the balance sheet under the caption

answer

investments

question

The receivable that is usually evidenced by a formal instrument of credit is a

answer

note receivable

question

Which of the following receivables would not be classified as an "other receivable"? Advance to an employee, Interest receivable, Refundable income tax, Notes receivable

answer

notes receivable

question

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

answer

trade receivables

question

The term "receivables" includes all

answer

money claims against other entities

question

When does an account become uncollectible?

answer

there is no general rule for when an account becomes uncollectible

question

The type of account and normal balance of Allowance for Doubtful Accounts is

answer

contra asset, credit

question

The two methods of accounting for uncollectible receivables are the allowance method and the

answer

direct write-off method

question

The direct write-off method of accounting for uncollectible accounts

answer

is not generally accepted as a basis for estimating bad debts.

question

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

answer

when an account is determined to be worthless

question

An alternative name for Bad Debts Expense is

answer

uncollectible accounts expense

question

Two methods of accounting for uncollectible accounts are the

answer

direct write-off method and the allowance method

question

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?

answer

bad debt expense

question

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

answer

accounts receivable

question

One of the weaknesses of the direct write-off method is that it

answer

violates the matching principle

question

The LMN Co. uses the direct write-off method of accounting for uncollectible accounts receivable. The entry to write off an account that has been determined to be uncollectible would be as follows:

answer

debit uncollectible accounts expense; credit accounts receivable

question

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment) and uncollectible accounts expense is estimated at 3% of net sales. If net sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is

answer

$18,000

question

Under the allowance method, writing off an uncollectible account

answer

affects only balance sheet accounts

question

An estimate based on an analysis of receivabels shows that $780 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $110. After preparing the adjusting entry at the end of the year, the balance in the Allowance for Doubtful Accounts is

answer

$780

question

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

answer

Allowance for Doubtful Accounts

question

Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates doubtful accounts of $15,000. Which of the following entries records the proper provision for doubtful accounts?

answer

debit uncollectible accounts expense, $14,200; credit allowance for doubtful accounts, $14,200.

question

Allowance for Doubtful Accounts has a debit balance of $500 at the end of the year (before adjustments), and the uncollectible accounts expense is estimated at 3% of net sales. If net sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is

answer

$18,000

question

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $450,000 and Allowance for Doubtful Accounts has a balance of $25,000. What is the net realizable value of the accounts receivable?

answer

$425,000

question

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?

answer

Accounts receivable

question

Allowance for Doubtful Accounts is listed on the balance sheet under the caption

answer

current assets

question

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

answer

total estimated uncollectible accounts as of the end of the year.

question

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

answer

debit uncollectible accounts expense $11,800; credit allowance for doubtful accounts $11,800

question

Allowance for Doubtful Accounts has a credit balance of $1,500 at the end of the year (before adjustment), and an analysis of customers' accounts indicates doubtful accounts of $17,900. Which f the following entries records the proper provision for doubtful accounts?

answer

debit uncollectible accounts expense, $16,400; credit allowance for doubtful accounts $16,400

question

What is the type of account and normal balance of Allowance for Doubtful Accounts

answer

contra asset, credit

question

A company uses the estimate of sales method to account for uncollectible accounts. When the firm writes off a specific cusomer's account receivable

answer

there is no effect on total current assets or total expenses

question

An estimate based on analysis of receivables shows that $780 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $110. After preparing the adjusting entry at the end of the year, the balance in the Uncollectible Accounts Expense is

answer

$890

question

ABC company uses the estimate of sales method of accounting for uncollectible accounts. ABC estimates that 3% of all credit sales will be uncollectible. On January 1, 2005, the Allowance for Doubtful Accounts had a credit balance of $2400. During 2005, ABC wrote-off accounts receivable totaling $1,800 and made credit sales of $100,000. After the adjusting entry, the December 31, 2005, balance in the Uncollectible Accounts Expense would be

answer

$3,000

question

The balance in Allowance for Doubtful Accounts must be carefully considered prior to the end of the year adjustment when applying which method

answer

estimate based on an analysis of receivables

question

Donovan Company uses the estimate based on analysis of receivables to account for uncollectible accounts. The company has determined that the Irish Company account is uncollectible. To write-off this account, Donovan should debit

answer

Allowance for Doubtful Accounts and credit Accounts Receivable

question

Using the estimate based on sales method of accounting for uncollectible accounts, the entry to reinstate a specific receivable previously written off would include a

answer

debit to accounts receivable

question

At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $540. During the year, $350 of previously written-off acounts were reinstated and accounts totaling $410 are written-off as uncollectible. The end of year balance in the Allowance for Doubtful Accounts should be

answer

$480

question

Allowance for Doubtful accounts has a debit balance of $800 at the end of year (before adjustment), and an analysis of accounts in the customer's ledger indicates doubtful accounts of $15,000. Which of the following entries records the proper provision for doubtful accounts?

answer

debit uncollectible accounts expense, $15,800; credit allowance for doubtful accounts, $15,800

question

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

answer

debit uncollectible accounts expense, $14000; credit allowance for doubtful accounts, $14000

question

Allowance for doubtful accounts has a credit balance of $1,500 at the end of the year (before adjustment), and an analysis of customers' accounts indicates doubtful accounts of $17900. Which of the following entries records the proper provision for doubtful accounts?

answer

debit uncollectible accounts expense $16,400; credit allowance for doubtful accounts $16,400

question

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

answer

management estimates the amount of uncollectibles

question

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

answer

does not affect income in the period it is collected

question

An aging of a company's accounts receivable indicatesthat $3,000 are estimated to be uncollectible. If allowance for doubtful accounts has a $1,200 debit balance, the adjustment to record bad debts for the period will require a

answer

deit to Bad Debts Expense for $4,200

question

A debit balance int eh allowance for doubtful accounts

answer

indicates that actual bad debt write-offs have exceeded the previous provisions for bad debts.

question

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a

answer

debit to bad debts expense and a credit to allowance for doubtful accounts

question

An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If alowance for doubtful accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a

answer

debit to bad debts expense for $2,800

question

An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If allowance for doubtful accounts has a $1,200 credit balance, the adjustment to record the bad debts for the period will require a

answer

debit to bad debts expense for $1,800

question

The balance in Allowance for Doubtful Accounts must be considered prior to end of period adjustment when using which method?

answer

Allowance method

question

You have just received notice that a customer of yours with an account receivable balance of $100 has gone bankrupt and wil not make any future payments. Assuming you use the allowance method, the entry you make is to

answer

debit allowance for doubtful accoutns and credit accounts receivable

question

Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Manning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustments?

answer

Bad Debts Expense 8,000 Allowance for Doubtful Accounts 8,000

question

Under the allowance method, when a year-end adjustment for estimated uncollectible accounts

answer

total assets decrease

question

The amount of a promissory note is called

answer

face value

question

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

answer

maturity value

question

A 60-day, 10% note for $8,000, dated April 15, is received from a customer on account. The face value of the note is

answer

$8,000

question

A 90-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

answer

$10,300

question

Interest on a note can be calculated without knowledge of the

answer

note's maturity date

question

On November 1, Blazer Company receives a 6% interest bearing note from Ram Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Blazer should record interest revenue of

answer

$200

question

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

answer

dishonored

question

The journal entry to record a note received from a customer to apply on account is

answer

debit notes receivable; credit accounts receivable

question

A $6,000, 30-day, 12% note recorded on November 12 is not paid by the maker at maturity. The journal entry to recognize this event is

answer

debit Accounts receivable, $6,060, credit Notes Receivable $6,000, Credit Interest Revenue, $60

question

On November 1, Kim Company accepted a 3-month note receivable as payment for services provided to Chu Company. The terms of the note were $8,000 face value and 6% interest. Kim Company closes its books at December 31 and does not use reversing entries. On February 1, the journal entry to record the collection of the note should include a credit to

answer

Interest Revenue for $40.

question

A note receivable or promissory note

answer

may be used to settle an accounts receivable

question

When a company receives an interest-bearing note receivable, it will

answer

debit Notes Receivable for the face value of the note

question

Pane Company receives a $3000, 3-month, 6% promissory note from Dag Company in settlement of an open accounts receivable. What entry will Pane Company make upon receiveing the note?

answer

Notes Receivable 3,000 Accounts Receivable-Dag Company 3,000

question

The maturity value of a $20000, 9%, 40-day note receivable dated July 3 is

answer

$20,200

question

Harper Company lends Hewell Company $20,000 on March 1, accepting a four-month

answer

...

Chapter 9: Acct Multiple Choice: Notes or Accounts Receivables, the Allowance Method – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards