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Exam 8: Receivables

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Question 51

Multiple Choice

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Current assets are usually listed in order

A) of the due date
B) of the size
C) alphabetically
D) of liquidity

E) None of the above
F) B) and D)

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Question 52

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Journalize the following transactions for Solley Company that occurred during 2011 and 2012. November 14, 2011 Received a $4,800.00, 90-day, 9% note from Alan Hibbetts in payment of his account. December 31, 2011 Accrued interest on the Hibbetts note. February 12, 2012 Received the amount due from Hibbetts on his note.

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Question 53

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

Using the allowance method of accounting for uncollectible receivables, the entry to reinstate a specific receivable previously written off would include a

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables: Feb 20 Received $1,000 from Andrew Warren and wrote off the remainder owed of $4,000 as uncollectible. May 10 Reinstated the account of Andrew Warren and received $4,000 cash in full payment.

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

Receivables that are expected to be collected in cash in eighteen months or less are reported in the Current Asset section of the balance sheet.

The number of days' sales in receivables is an estimate of the length of time the accounts receivables have been outstanding.

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?

At the end of a period (before adjustment), Allowance for Doubtful Accounts has a credit balance of $5,000. The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000. The amount to be recorded in the adjusting entry for the Bad Debt Expense is $45,000.

For the fiscal years 2009 and 2010, Apple Co. reported the following: a. Compute the accounts receivable turnover for 2010. b. Compute the number of days' sales in receivable at the end of 2010.

When does an account become uncollectible?

For each of the following notes receivables held by Rogers Company determine the interest revenue to be reported on the income statements for 2011 and 2012. Round answers to nearest whole dollar.

At the end of a period, (before adjustment), Allowance for Doubtful Accounts has a credit balance of $250. The net credit sales for the period total $500,000. If the company estimates uncollectible accounts expense at 1% of net credit sales, the amount of bad debt expense to be recorded in an adjusting entry is $4,750.

Fellows Corporation has determined that the $2,700 accounts receivable due from Andrew Stevens is uncollectible. Compare the journal entry that is required under the direct write-off method to the journal entry that is required using the allowance method.

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

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

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

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

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