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Exam 9: Receivables

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Question 31

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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.

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Question 32

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List at least three things that indicate a receivable may be uncollectible.

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1. The receivable is past due.
2. The cu...

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Question 33

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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 $90,000; Allowance for Doubtful Accounts has a credit balance of $850; and net sales for the year total $300,000. Bad debt expense is estimated at 2.5% of net sales. Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

When a note is received from a customer on account, it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

When using the estimate based on sales method, the entry to record uncollectible accounts expense includes a credit to the Accounts Receivable account.

In accounting for uncollectible receivables, the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

The difference between the balance in Accounts Receivable and the balance in the Allowance for Doubtful Accounts is called the net realizable value.

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?

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

The amount of the promissory note plus the interest earned on the due date is called the

If a promissory note is dishonored, the payee should still record interest revenue.

The number of days' sales in receivables

The accounts receivable turnover measures the length of time in days it takes to collect a receivable.

A note receivable due in 18 months is listed on the balance sheet under the caption

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?

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?

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

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.

Interest on a note can be calculated without knowledge of the