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Exam 8: Receivables

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Question 21

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

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Question 22

Multiple Choice

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Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment) ,and an analysis of customers' accounts indicates uncollectible receivables of $19,700.Which of the following entries records the proper adjustment for bad debt expense? ​

A) debit Allowance for Doubtful Accounts,$17,600; credit Bad Debt Expense,$17,600
B) debit Allowance for Doubtful Accounts,$21,800; credit Bad Debt Expense,$21,800
C) debit Bad Debt Expense,$21,800; credit Allowance for Doubtful Accounts,$21,800
D) debit Bad Debt Expense,$17,600; credit Allowance for Doubtful Accounts,$17,600

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Question 23

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Blackwell Industries received a 120-day,9% note for $180,000,dated August 10 from a customer on account. Required:

What is the type of account and normal balance of Allowance for Doubtful Accounts?

An aging of a company's accounts receivable indicates that the estimate of the uncollectible accounts totals $4,000.If Allowance for Doubtful Accounts has a $800 credit balance,the adjustment to record the bad debt expense for the period will require a ​

If the allowance method of accounting for uncollectible receivables is used,what general ledger account is debited to write off a customer's account as uncollectible?

A $6,000,60-day,12% note recorded on November 21 is not paid by the maker at maturity.The journal entry to recognize this event is

At the end of the current year,Accounts Receivable has a balance of $750,000; Allowance for Doubtful Accounts has a debit balance of $6,200; and sales for the year total $3,500,000.Bad debt expense is estimated at 1 / 2 of 1% of sales. ​ Determine (a)the amount of the adjusting entry for bad debt expense; (b)the adjusted balances of Accounts Receivable,Allowance for Doubtful Accounts,and Bad Debt Expense; and (c)the net realizable value of accounts receivable.

The due date of a 60-day note dated July 10 is September 10.

​Small companies can use either the direct write-off method or the allowance method.

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

The balance of Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

The direct write-off method records bad debt expense in the year the specific account receivable is determined to be uncollectible.

Of the two methods of accounting for uncollectible receivables,the allowance method provides in advance for uncollectible receivables.

Financial statement data for the years ended December 31 for Parker Corporation are as follows: ​ Current Year Prior Year Sales $2,595,600 $2,409,500 Accounts receivable: Beginning of the year $390,000 $400,000 End of the year 434,000 390,000 ​ ​​(a)Determine the accounts receivable turnover for each year.Round to one decimal place. (b)Determine the number of days' sales in receivables for each year.Round to whole days. (c)Does the change in accounts receivable turnover and number of days' sales in receivables from the first year to the second year indicate a favorable or unfavorable trend?

When referring to a note receivable or promissory note

After the accounts are adjusted and closed at the end of the fiscal year,Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000.What is the net realizable value of the accounts receivable?

Journalize the following transactions (assume a 360-day year when calculating interest):

The Lowery Co.uses the direct write-off method of accounting for uncollectible accounts receivable.Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible.The entry to write off this account would be which of the following? ​

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