1. To Record Estimated Uncollectible Accounts Using The Allowance Method, The Adjusting Entry Would. 1. To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a
debit to Loss on Credit Sales Revenue and a credit to Accounts Receivable.
debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.
debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.
debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts
2. A company that receives an interest bearing note receivable will
debit Notes Receivable for the maturity value of the note.
credit Notes Receivable for the maturity value of the note.
debit Notes Receivable for the face value of the note.
credit Notes Receivable for the face value of the note.
3. Writing off an uncollectible account under the allowance method requires a debit to
Bad Debt Expense.
Uncollectible Accounts Expense.
Allowance for Doubtful Accounts.
Accounts Receivable.
4. Which of the following would be considered as an unlikely occurrence?
Manufacturer offers a cash discount to a wholesaler.
Wholesaler offers a cash discount to a retailer.
Retailer offers a cash discount to a customer.
All of these are standard practices.
5. When a note is accepted to settle an open account, Notes Receivable is debited for the note’s
face value plus interest.
net realizable value.
face value.
maturity value.
6. T’Pol Furniture factors $900,000 of receivables to Trip Factors, Inc. Trip Factors assesses a 2% service charge on the amount of receivables sold. T’Pol Furniture factors its receivables regularly with Trip Factors. What journal entry does T’Pol make when factoring these receivables?
Cash 882,000
Accounts Receivable 882,000
Cash 882,000
Service Charge Expense 18,000
Accounts Receivable 900,000
Cash 882,000
Loss on Sale of Receivables 18,000
Accounts Receivable 900,000
Cash 900,000
Accounts Receivable 882,000
Gain on Sale of Receivables 18,000
7. On November 1, Gentle Company received a $3,000, 6%, three-month note receivable. The cash to be received by Gentle Company when the note becomes due is:
$3,000.
$3,030.
$3,045.
$3,180.
8. The average collection period for accounts receivable is computed by dividing 365 days by
average accounts receivable.
accounts receivable turnover.
ending accounts receivable.
net credit sales.
9. A 90-day note dated May 14 has a maturity date of
August 14.
August 13.
August 12.
August 15
10. Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $2,000 credit before adjustment, what is the amount of bad debt expense for that period?
$13,000
$15,000
$2,000
$17,000
1. To Record Estimated Uncollectible Accounts Using The Allowance Method, The Adjusting Entry Would
