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Exam 9: Receivables

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Question 61

Multiple Choice

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Miles uses the allowance method and wrote off the account of James.Miles then received $559 as partial payment on the account of James.The journal entry to record the initial write-off includes a

A) debit to Allowance for Doubtful Accounts
B) credit to Cash
C) debit to Accounts Receivable-James
D) credit to Bad Debt Expense

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

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Question 62

Multiple Choice

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Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 3% of credit sales.If credit sales are $300,000,the amount of the adjusting entry to record the estimated uncollectible accounts receivable

A) is $8,500
B) is $9,500
C) is $9,000
D) cannot be determined

E) C) and D)
F) A) and B)

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Question 63

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GAAP requires companies with a large amount of receivables to use the allowance method.

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

Given the following information,compute accounts receivable turnover.

When accounting for uncollectible receivables and using the percentage of sales method,the matching principle is violated.

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.

Match each description to the appropriate term (a-h) . -The party promising to pay a note

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

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?

Match each description to the appropriate term (a-d) . Each term may be used more than once. -This method focuses on the income statement.

Which of the following receivables would not be classified as an "other receivable"?

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

When referring to a note receivable or promissory note,

Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment) .The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $31,900.Which of the following adjusting entries is needed to record the bad debt expense for the year?

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

Match each description to the appropriate term (a-h) . -The dollar amount stated on a promissory note

(a)The aging of Torme Designs' accounts receivable is shown below.Calculate the amount of each periodicity range that is deemed to be uncollectible.​​ (b) If Allowance for Doubtful Accounts has a credit balance of $1,135.00,record the adjusting entry forthe bad debt expense for the year.

Other receivables include nontrade receivables such as loans to company officers.

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