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Exam 9: Receivables

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Question 41

True/False

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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.

A) True
B) False

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Question 42

Multiple Choice

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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?

A) Uncollectible Accounts Expense
B) Accounts Receivable
C) Allowance for Doubtful Accounts
D) Interest Expense

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

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Question 43

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At the end of the current year, Accounts Receivable has a balance of $675,000; Allowance for Doubtful Accounts has a debit balance of $5,400; and net sales for the year total $3,000,000. An analysis of receivables indicates the uncollectible receivables are estimated to be $45,000. Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

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

An alternative name for Bad Debt Expense is

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

Allowance for Doubtful Accounts is classified as a(n) ______ and has a normal ______ balance.

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

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?

When a company uses the allowance method of accounting for uncollectible receivables, the entry to reinstate a previously written off account would include:

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

The maturity value of a 12%, 60-day note for $5,000 is $5,600.

When using the analysis of receivables method for estimating uncollectible receivables, the amount computed in the analysis is usually the amount that would be recorded in the end-of-period adjusting entry.

On October 1, Black Company receives a 9% interest bearing note from Reese Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Black should record interest revenue of

The term "receivables" includes all

At the end of a period (before adjustment), Allowance for Doubtful Accounts has a debit balance of $500. Net credit sales for the period totaled $800,000. If bad debt expense is estimated at 1% of net credit sales, the amount of bad debt expense to be recorded in the adjusting entry is $8,500.

When using the allowance method to estimate uncollectible accounts receivable based on an analysis of receivables shows that $640 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $110. The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of:

Current assets are usually listed in order

At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $3,500,000. Bad debt expense is estimated at 1/2 of 1% of net sales. Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

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.