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Exam 9: Receivables

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Question 31

True/False

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The maturity value of a note receivable is always the same as its face value.

A) True
B) False

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Question 32

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At the end of a period (before adjustment), Allowance for Doubtful Accounts has a credit balance of $5,000. The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000. The amount to be recorded in the adjusting entry for the Bad Debt Expense is $45,000.

A) True
B) False

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Question 33

Multiple Choice

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Accounts Receivable Turnover measures

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

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

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.

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

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

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

Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

Notes or accounts receivables that result from sales transactions are often called

Discuss the similarities and differences between accounts receivables, notes receivables and other receivables.

On the basis of the following data related to assets due within one year for Webb Co., prepare a partial balance sheet in good form at December 31, 2014. Show total current assets.

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs for and received cash in full payment.

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?

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.

The term "receivables" includes all

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.

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?:

Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before adjusting entries are recorded at the end of the accounting period.