Question 1

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

Accepted Answer

A)   Uncollectible accounts are estimated to be $55,500.
B)   Uncollectible accounts are estimated to be $111,000.
C)   Bad debt expense is estimated to be $5,550.
D)   Bad debt expense is estimated to be $11,100.E) C) and D)
F) B) and C)

Question 2

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 3

At the end of the current year, Accounts Receivable has a balance of $90,000; Allowance for Doubtful Accounts has a credit balance of $850; and sales for the year total $300,000. Bad debt expense is estimated at 2.5% of sales.​Determine 
(a) the amount of the adjusting entry for uncollectible accounts; 
(b) the adjusted balances of Accounts Receivable, Allowance for 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 4

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables, a major difference is that the direct write-off method

Accepted Answer

A)   uses a percentage of sales to estimate uncollectible accounts
B)   is used primarily by large companies with many receivables
C)   is used primarily by small companies with few receivables
D)   uses an allowance accountE) None of the above
F) C) and D)

Question 5

Match each description to the appropriate term (a-i) .
-The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age

Accepted Answer

A)  Accounts receivable turnover
B)  Net realizable value
C)  Accounts receivable
D)  Aging the receivables
E)  ReceivablesF) Direct write-off methodG) Allowance for doubtful accountsH) Bad debt expenseI) Notes receivableJ) A) and D)
K) D) and F)

Question 6

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) None of the above
F) All of the above

Question 7

Journalize the following transactions 
(assume a 360-day year when calculating interest):Mar. 1Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.May 30The note of March 1 was dishonored.

Accepted Answer

None...

Question 8

Match each description to the appropriate term (a-h) .
-A note that is not paid when it is due

Accepted Answer

A)  Face amount
B)  Term
C)  Interest
D)  Maturity value
E)  Dishonored noteF) MakerG) Notes receivableH) Interest rateI) F) and G)
J) B) and E)

Question 9

When an account receivable that has been written off is subsequently collected, the account receivable must first be reinstated before recording the receipt of payment.

Accepted Answer

A) True 
 B)False  True

Question 10

When using the percent of sales method of estimating uncollectibles, the entry to record bad debt expense includes a credit to Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 11

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 sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000.​Determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance for Doubtful Accounts, respectively.​

Accepted Answer

A)   $19,500 and $25,000
B)   $30,500 and $525,000
C)   $19,500 and $525,000
D)   $30,500 and $25,000E) A) and B)
F) All of the above

Question 12

The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for bad debt expense when using the

Accepted Answer

A)   allowance method based on aging the receivables
B)   direct write-off method
C)   accrual method
D)   declining value methodE) A) and C)
F) None of the above

Question 13

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct regarding the entry to record estimated uncollectible receivables?

Accepted Answer

A)   Cash will be debited.
B)   Bad Debt Expense will be credited.
C)   Allowance for Doubtful Accounts will be credited.
D)   Accounts Receivable will be debited.E) All of the above
F) A) and B)

Question 14

When a note is written to settle an open account, no entry is necessary.

Accepted Answer

A) True 
 B)False

Question 15

Match each description to the appropriate term (a-i) .
-The difference between accounts receivable and allowance for doubtful accounts

Accepted Answer

A)  Accounts receivable turnover
B)  Net realizable value
C)  Accounts receivable
D)  Aging the receivables
E)  ReceivablesF) Direct write-off methodG) Allowance for doubtful accountsH) Bad debt expenseI) Notes receivableJ) H) and I)
K) B) and C)

Question 16

Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write off this account, Dalton should debit

Accepted Answer

A)   Bad Debt Expense and credit Accounts Receivable
B)   Bad Debt Expense and credit Allowance for Doubtful Accounts
C)   Allowance for Doubtful Accounts and credit Accounts Receivable
D)   Accounts Receivable and credit Allowance for Doubtful AccountsE) A) and B)
F) All of the above

Question 17

Match each description to the appropriate term (a-i) .
-Measures how frequently during the year accounts receivable are being turned into cash

Accepted Answer

A)  Accounts receivable turnover
B)  Net realizable value
C)  Accounts receivable
D)  Aging the receivables
E)  ReceivablesF) Direct write-off methodG) Allowance for doubtful accountsH) Bad debt expenseI) Notes receivableJ) A) and F)
K) D) and H) A

Question 18

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Accepted Answer

A)   $40,000
B)   $40,400
C)   $43,600
D)   $44,000E) B) and D)
F) B) and C)

Question 19

The party promising to pay a note at maturity is the maker.

Accepted Answer

A) True 
 B)False

Question 20

Journalize the following transactions using the allowance method of accounting for uncollectible receivables.?Apr. 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400.?June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.?Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment.

Accepted Answer

$\begin{array}{|c|l|c|c|}
\hline \text { Apr. } 1 & \text { Accounts Receivable } & 7,200 & \
\hline & \text { Sales } & & 7,200 \\hline\
\hline 1 & \text { Cost of Merchandise Sold } & 5,400 & \
\hline & \text { Merchandise Inventory } & & 5,400 \\hline\
\hline \text { June } 10 & \text { Cash } & 2,400 & \
\hline & \text { Allowance for Doubtful Accounts } & 4,800 & \
\hline & \text { Accounts Receivable-Jim Dobbs } & & 7,200 \\hline\
\hline \text { Oct. } 11 & \text { Accounts Receivable-Jim Dobbs } & 4,800 & \
\hline & \text { Allowance for Doubtful Accounts } & & 4,800 \\hline\
\hline 11 & \text { Cash } & 4,800 & \
\hline & \text { Accounts Receivable-Jim Dobbs } & & {4,800} \
\hline
\end{array}$

Exam 9: Receivables

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

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

Correct Answer
verified

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables, a major difference is that the direct write-off method

Correct Answer
verified

Match each description to the appropriate term (a-i) . -The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age

Correct Answer
verified

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

Correct Answer
verified

Journalize the following transactions (assume a 360-day year when calculating interest):Mar. 1Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.May 30The note of March 1 was dishonored.

Correct Answer
verified
None...
View Answer

Match each description to the appropriate term (a-h) . -A note that is not paid when it is due

Correct Answer
verified

When an account receivable that has been written off is subsequently collected, the account receivable must first be reinstated before recording the receipt of payment.

Correct Answer
verified
True

When using the percent of sales method of estimating uncollectibles, the entry to record bad debt expense includes a credit to Accounts Receivable.

Correct Answer
verified

Correct Answer
verified

The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for bad debt expense when using the

Correct Answer
verified

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct regarding the entry to record estimated uncollectible receivables?

Correct Answer
verified

When a note is written to settle an open account, no entry is necessary.

Correct Answer
verified

Match each description to the appropriate term (a-i) . -The difference between accounts receivable and allowance for doubtful accounts

Correct Answer
verified

Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write off this account, Dalton should debit

Correct Answer
verified

Match each description to the appropriate term (a-i) . -Measures how frequently during the year accounts receivable are being turned into cash

Correct Answer
verified
A

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Correct Answer
verified

The party promising to pay a note at maturity is the maker.

Correct Answer
verified

Exam 9: Receivables

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

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 AnswerverifiedShow Answer

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables, a major difference is that the direct write-off method

Correct AnswerverifiedShow Answer

Match each description to the appropriate term (a-i) . -The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Journalize the following transactions (assume a 360-day year when calculating interest):Mar. 1Received a 90-day, 10% note for $24,000, dated March 1, from Batson Co. on account.May 30The note of March 1 was dishonored.

Correct AnswerverifiedNone...View AnswerShow Answer

Match each description to the appropriate term (a-h) . -A note that is not paid when it is due

Correct AnswerverifiedShow Answer

When an account receivable that has been written off is subsequently collected, the account receivable must first be reinstated before recording the receipt of payment.

Correct AnswerverifiedTrue

When using the percent of sales method of estimating uncollectibles, the entry to record bad debt expense includes a credit to Accounts Receivable.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for bad debt expense when using the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a note is written to settle an open account, no entry is necessary.

Correct AnswerverifiedShow Answer

Match each description to the appropriate term (a-i) . -The difference between accounts receivable and allowance for doubtful accounts

Correct AnswerverifiedShow Answer

Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write off this account, Dalton should debit

Correct AnswerverifiedShow Answer

Match each description to the appropriate term (a-i) . -Measures how frequently during the year accounts receivable are being turned into cash

Correct AnswerverifiedA

The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is

Correct AnswerverifiedShow Answer

The party promising to pay a note at maturity is the maker.

Correct AnswerverifiedShow Answer

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
None...
View Answer

Correct Answer
verified

Correct Answer
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True

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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A

Correct Answer
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Correct Answer
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