Question 1

Using the following information:  During 2018, sales on account were $145,000 and collections on account were $100,000. Also during 2018, the company wrote off $4,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectible accounts should be estimated at $40,000.
Bad debt expense for 2018 is

Accepted Answer

A)   $4,000.
B)   $5,000.
C)   $9,000
D)   $40,000.E) A) and C)
F) B) and C)

Question 2

On March 9, Phillips gave Jackson Company a 60-day, 12% promissory note for $5,200. Phillips honors the note on May 8. Record the collection of the note and interest by Jackson assuming that no interest has been accrued.

Accepted Answer

The answer of On March 9, Phillips gave Jackson Company...

Question 3

Under the allowance method, writing off an uncollectible account

Accepted Answer

A)   affects only balance sheet accounts.
B)   affects both balance sheet and income statement accounts.
C)   affects only income statement accounts.
D)   is not acceptable practice.E) B) and D)
F) All of the above

Question 4

The financial statements of Gervais Manufacturing Company report net sales of $500,000 and accounts receivable of $80,000 and $40,000 at the beginning and end of the year, respectively. What is the accounts receivable turnover for Gervais?

Accepted Answer

A)   6.3 times
B)   8.3 times
C)   10 times
D)   12.5 timesE) A) and D)
F) A) and C)

Question 5

Your roommate is uncertain about the advantages of a promissory note. Compare the advantages of a note receivable with those of an account receivable.

Accepted Answer

Yes, it is ethical to reinstate the debt...

Question 6

If a company sells its accounts receivables to a factor,

Accepted Answer

A)   the seller pays a commission to the factor.
B)   the factor pays a commission to the seller.
C)   there is a gain on the sale of the receivables.
D)   the seller defers recognition of sales revenue until the account is collected.E) A) and C)
F) A) and D)

Question 7

The two methods of accounting for uncollectible accounts are the ____________ method and the ______________ method.

Accepted Answer

allowance,...

Question 8

An aging of a company's accounts receivable indicates that $5,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 credit balance, the adjustment to record bad debts for the period will require a

Accepted Answer

A)   debit to Bad Debt Expense for $5,000.
B)   debit to Allowance for Doubtful Accounts for $4,100.
C)   debit to Bad Debt Expense for $4,100.
D)   credit to Allowance for Doubtful Accounts for $5,000.E) B) and C)
F) A) and B)

Question 9

Notes receivable represent claims for which formal instruments of credit are issued as evidence of debt.

Accepted Answer

A) True 
 B)False

Question 10

Receivables may be sold because they may be the only reasonable source of cash.

Accepted Answer

A) True 
 B)False

Question 11

Newton Company has the following accounts in its general ledger at July 31: Accounts Receivable $40,000 and Allowance for Doubtful Accounts $2,500. During August, the following transactions occurred.  
Instructions
Journalize the transactions.

Accepted Answer

The answer of Newton Company has the following accounts in...

Question 12

The allowance method of accounting for uncollectible accounts is required if

Accepted Answer

A)   the company makes any credit sales.
B)   bad debts are significant in amount.
C)   the company is a retailer.
D)   the company charges interest on accounts receivable.E) A) and D)
F) B) and C)

Question 13

The interest rate specified on any note is for a

Accepted Answer

A)   day.
B)   month.
C)   week.
D)   year.E) B) and C)
F) A) and D)

Question 14

The maturity value of a $70,000, 8%, 3-month note receivable is

Accepted Answer

A)   $70,467.
B)   $70,560.
C)   $71,400.
D)   $75,600.E) B) and C)
F) A) and D)

Question 15

The two key parties to a promissory note are the

Accepted Answer

A)   maker and a bank.
B)   debtor and the payee.
C)   maker and the payee.
D)   sender and the receiver.E) A) and B)
F) C) and D)

Question 16

The basic issues in accounting for notes receivable include each of the following except

Accepted Answer

A)   analyzing notes receivable.
B)   disposing of notes receivable.
C)   recognizing notes receivable.
D)   valuing notes receivable.E) A) and D)
F) C) and D)

Question 17

Under the direct write-off method of accounting for uncollectible accounts

Accepted Answer

A)   the allowance account is increased for the actual amount of bad debt at the time of write-off.
B)   a specific account receivable is decreased for the actual amount of bad debt at the time of write-off.
C)   balance sheet relationships are emphasized.
D)   bad debt expense is always recorded in the period in which the revenue was recorded.E) A) and B)
F) A) and C)

Question 18

A debit balance in the Allowance for Doubtful Accounts

Accepted Answer

A)   is the normal balance for that account.
B)   indicates that actual bad debt write-offs have exceeded previous provisions for bad debts.
C)   indicates that actual bad debt write-offs have been less than what was estimated.
D)   cannot occur if the percentage of sales method of estimating bad debts is used.E) A) and B)
F) None of the above

Question 19

The retailer considers Visa and MasterCard sales as

Accepted Answer

A)   cash sales.
B)   promissory sales.
C)   credit sales.
D)   contingent sales.E) A) and C)
F) All of the above

Question 20

The following information is available for Edmiston Company.  
Instructions
Compute the accounts receivable turnover and the average collection period.

Accepted Answer

Accounts receivable turnover =...

Exam 8: Accounting for Receivables

Your roommate is uncertain about the advantages of a promissory note. Compare the advantages of a note receivable with those of an account receivable.

Correct Answer
verified
Yes, it is ethical to reinstate the debt...
View Answer

The interest rate specified on any note is for a

Correct Answer
verified

Receivables may be sold because they may be the only reasonable source of cash.

Correct Answer
verified

The two key parties to a promissory note are the

Correct Answer
verified

Under the direct write-off method of accounting for uncollectible accounts

Correct Answer
verified

The financial statements of Gervais Manufacturing Company report net sales of $500,000 and accounts receivable of $80,000 and $40,000 at the beginning and end of the year, respectively. What is the accounts receivable turnover for Gervais?

Correct Answer
verified

An aging of a company's accounts receivable indicates that $5,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 credit balance, the adjustment to record bad debts for the period will require a

Correct Answer
verified

If a company sells its accounts receivables to a factor,

Correct Answer
verified

Under the allowance method, writing off an uncollectible account

Correct Answer
verified

Newton Company has the following accounts in its general ledger at July 31: Accounts Receivable $40,000 and Allowance for Doubtful Accounts $2,500. During August, the following transactions occurred. Instructions Journalize the transactions.

Correct Answer
verified

Correct Answer
verified

The maturity value of a $70,000, 8%, 3-month note receivable is

Correct Answer
verified

Notes receivable represent claims for which formal instruments of credit are issued as evidence of debt.

Correct Answer
verified

The two methods of accounting for uncollectible accounts are the method and the __ method.

Correct Answer
verified
allowance,...
View Answer

A debit balance in the Allowance for Doubtful Accounts

Correct Answer
verified

The basic issues in accounting for notes receivable include each of the following except

Correct Answer
verified

The allowance method of accounting for uncollectible accounts is required if

Correct Answer
verified

The following information is available for Edmiston Company. Instructions Compute the accounts receivable turnover and the average collection period.

Correct Answer
verified
Accounts receivable turnover =...
View Answer

On March 9, Phillips gave Jackson Company a 60-day, 12% promissory note for $5,200. Phillips honors the note on May 8. Record the collection of the note and interest by Jackson assuming that no interest has been accrued.

Correct Answer
verified

The retailer considers Visa and MasterCard sales as

Correct Answer
verified

Exam 8: Accounting for Receivables

Your roommate is uncertain about the advantages of a promissory note. Compare the advantages of a note receivable with those of an account receivable.

Correct AnswerverifiedYes, it is ethical to reinstate the debt...View AnswerShow Answer

The interest rate specified on any note is for a

Correct AnswerverifiedShow Answer

Receivables may be sold because they may be the only reasonable source of cash.

Correct AnswerverifiedShow Answer

The two key parties to a promissory note are the

Correct AnswerverifiedShow Answer

Under the direct write-off method of accounting for uncollectible accounts

Correct AnswerverifiedShow Answer

The financial statements of Gervais Manufacturing Company report net sales of $500,000 and accounts receivable of $80,000 and $40,000 at the beginning and end of the year, respectively. What is the accounts receivable turnover for Gervais?

Correct AnswerverifiedShow Answer

An aging of a company's accounts receivable indicates that $5,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 credit balance, the adjustment to record bad debts for the period will require a

Correct AnswerverifiedShow Answer

If a company sells its accounts receivables to a factor,

Correct AnswerverifiedShow Answer

Under the allowance method, writing off an uncollectible account

Correct AnswerverifiedShow Answer

Newton Company has the following accounts in its general ledger at July 31: Accounts Receivable $40,000 and Allowance for Doubtful Accounts $2,500. During August, the following transactions occurred. Instructions Journalize the transactions.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The maturity value of a $70,000, 8%, 3-month note receivable is

Correct AnswerverifiedShow Answer

Notes receivable represent claims for which formal instruments of credit are issued as evidence of debt.

Correct AnswerverifiedShow Answer

The two methods of accounting for uncollectible accounts are the ____________ method and the ______________ method.

Correct Answerverifiedallowance,...View AnswerShow Answer

A debit balance in the Allowance for Doubtful Accounts

Correct AnswerverifiedShow Answer

The basic issues in accounting for notes receivable include each of the following except

Correct AnswerverifiedShow Answer

The allowance method of accounting for uncollectible accounts is required if

Correct AnswerverifiedShow Answer

The following information is available for Edmiston Company. Instructions Compute the accounts receivable turnover and the average collection period.

Correct AnswerverifiedAccounts receivable turnover =...View AnswerShow Answer

On March 9, Phillips gave Jackson Company a 60-day, 12% promissory note for $5,200. Phillips honors the note on May 8. Record the collection of the note and interest by Jackson assuming that no interest has been accrued.

Correct AnswerverifiedShow Answer

The retailer considers Visa and MasterCard sales as

Correct AnswerverifiedShow Answer

Correct Answer
verified
Yes, it is ethical to reinstate the debt...
View Answer

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The two methods of accounting for uncollectible accounts are the method and the __ method.

Correct Answer
verified
allowance,...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Accounts receivable turnover =...
View Answer

Correct Answer
verified

Correct Answer
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