Question 1

The two methods of accounting for uncollectible receivables are the allowance method and the:

Accepted Answer

A)  cost method.
B)  direct write-off method.
C)  interest method.
D)  equity method.E) C) and D)
F) B) and D)

Question 2

The Allowance for Doubtful Accounts is listed on the balance sheet under the caption:

Accepted Answer

A)  owner's equity.
B)  current liabilities.
C)  current assets.
D)  fixed assets.E) None of the above
F) C) and D)

Question 3

A company uses the allowance method and expects not to collect $21,000 of sales.The journal entry to record the estimated bad debt is:

Accepted Answer

A)    Allowance for Doubtful Accounts $21,000 Bad Debt Expense $21,000\begin{array} { | r | l | } \hline	ext { Allowance for Doubtful Accounts } & \$ 21,000 \\hline 	ext { Bad Debt Expense } & \$ 21,000 \\hline\end{array} Allowance for Doubtful Accounts  Bad Debt Expense ​$21,000$21,000​​ 
B)    Allowance for Doubtful Accounts $21,000 Accounts Receivable $21,000\begin{array} { | r | l l | } \hline	ext { Allowance for Doubtful Accounts } & \$ 21,000 & \\hline 	ext { Accounts Receivable } & \$ 21,000 \\hline\end{array} Allowance for Doubtful Accounts  Accounts Receivable ​$21,000$21,000​​ 
C)    Bad Debt Expense $21,000 Allowance for Doubtful Accounts $21,000\begin{array} { | c | l l | } \hline	ext { Bad Debt Expense } & \$ 21,000 \\hline 	ext { Allowance for Doubtful Accounts } & \$ 21,000 \\hline\end{array} Bad Debt Expense  Allowance for Doubtful Accounts ​$21,000$21,000​​ 
D)    Accounts Receivable $21,000 Allowance for Doubtful Accounts $21,000\begin{array} { | c | l l | } \hline	ext { Accounts Receivable } & \$ 21,000 \\hline 	ext { Allowance for Doubtful Accounts } & \$ 21,000 \\hline\end{array} Accounts Receivable  Allowance for Doubtful Accounts ​$21,000$21,000​​E) All of the above
F) A) and C)

Question 4

Sylvia's,Inc. ,decreases Allowance for Doubtful Accounts $700 at year-end.As a result:

Accepted Answer

A)  net assets decrease.
B)  net income is unchanged.
C)  net assets increase.
D)  net realizable value of assets decreases.E) A) and C)
F) C) and D)

Question 5

Sonny's Service Bureau is able to collect an amount previously written off last year under the direct write-off method.The journal entry will:

Accepted Answer

A)  decrease Bad Debts Expense.
B)  increase Bad Debts Recovered.
C)  decrease Accounts Receivable.
D)  decrease Cash.E) All of the above
F) B) and C)

Question 6

Before the accounts are adjusted and closed at the end of the year,Accounts Receivable has a normal balance of $210,000 and Allowance for Doubtful Accounts has a credit balance $3,000.What is the net realizable value of the accounts receivable?

Accepted Answer

A)  $213,000
B)  $207,000
C)  $210,000
D)  $200,000E) None of the above
F) A) and B)

Question 7

Fit City estimates it will collect $3,300 of the $3,525 owed by customers.The difference of $225 represents the:

Accepted Answer

A)  Gross Accounts Receivable.
B)  the Net Realizable Value.
C)  Allowance for Doubtful Accounts.
D)  Value of the Current Unpaid Receivables.E) B) and D)
F) B) and C)

Question 8

Under the accrual method of accounting,the allowance method is generally required for financial reporting purposes.

Accepted Answer

A) True 
 B)False

Question 9

A debit balance in Allowance for Doubtful Accounts indicates the estimate for Bad Debts was too low.

Accepted Answer

A) True 
 B)False

Question 10

Town and Country Saddle learns the account receivable for a customer is uncollectible.The journal entry under the allowance method to write-off an account is to:

Accepted Answer

A)  debit Allowance for Doubtful Accounts;credit Bad Debts Expense
B)  debit Sales;credit Allowance for Doubtful Accounts.
C)  debit Bad Debts Expense;credit Accounts Receivable.
D)  debit Allowance for Doubtful Accounts;credit Accounts Receivable.E) A) and B)
F) A) and D)

Question 11

Harry's Hardware estimates that approximately $1.75 out of every $100 of credit sales proves to be uncollectible.Harry calculates Bad Debts Expense using the:

Accepted Answer

A)  aging the Accounts Receivable approach.
B)  direct write-off method.
C)  balance sheet approach.
D)  income statement approach.E) A) and C)
F) B) and C)

Question 12

The Allowance for Doubtful Accounts is shown on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

On December 31,2015,Landscape Pros had a balance in Accounts Receivable of $25,000.Net credit sales for the year were $400,000.The Allowance for Doubtful Accounts has a credit balance of $500.Journalize the recording of the bad debt expense under the income statement approach if 3% of net credit sales is deemed uncollectible.

Accepted Answer

The answer of On December 31,2015,Landscape Pros had a balance...

Question 14

Colleen's account was written off for $800.She received an inheritance from her uncle and wants to clear her account.The entry to record this is to:

Accepted Answer

A)  debit Cash and credit Accounts Receivable/Colleen.
B)  debit Allowances for Doubtful Accounts,credit Accounts Receivable/Maggie,debit Cash,and credit Accounts Receivable/Colleen.
C)  debit Accounts Receivable/Colleen,credit Allowance for Doubtful Accounts,debit Cash,and credit Accounts Receivable/Colleen.
D)  debit Accounts Receivable/Colleen,credit Allowance for Doubtful Accounts,debit Accounts Receivable/Colleen,and credit Cash.E) A) and B)
F) B) and D)

Question 15

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature.
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column 4 } \
\hline \text { Cash } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 16

What type of account is a Bad Debts Expense?

Accepted Answer

A)  Asset
B)  Expense
C)  Contra Asset
D)  LiabilityE) All of the above
F) A) and B)

Question 17

What would be the basis for the following entry on a firm's records?
  Bad Debt Expense 150 Allowance for Doubtful  Accounts 150\begin{array} { | r | l | } \hline 	ext { Bad Debt Expense } & 150 \\hline 	ext { Allowance for Doubtful } \	ext { Accounts } & 150\\hline\end{array} Bad Debt Expense  Allowance for Doubtful  Accounts ​150150​​

Accepted Answer

A)  The firm is using the direct write-off method.
B)  The firm is writing off an uncollectible account.
C)  The firm is using the allowance method for estimating bad debt.
D)  All of these answers are correct. E) B) and C)
F) A) and B)

Question 18

To record receipt of money after an account has been written off using the direct method in the previous year,you would need to:

Accepted Answer

A)  credit cash.
B)  debit the allowance account.
C)  credit Bad Debts Recovered.
D)  All of the above.E) A) and B)
F) A) and C)

Question 19

Empire has a credit balance of $450 in its Allowance for Doubtful Accounts.The balance in the Accounts Receivable account is $92,500,with $2,015 estimated to be uncollectible after aging the accounts.Under the balance sheet approach,the debit to Bad Debt Expense will be:

Accepted Answer

A)  $450.
B)  $2,465.
C)  $2,015.
D)  $1,565.E) A) and C)
F) All of the above

Question 20

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?

Accepted Answer

A)  Bad Debts Expense
B)  Accounts Receivable
C)  Accounts Payable
D)  Bad Debts RecoveredE) C) and D)
F) All of the above

Exam 13: Accounting for Bad Debts

The Allowance for Doubtful Accounts is shown on the balance sheet.

Correct Answer
verified

Harry's Hardware estimates that approximately $1.75 out of every $100 of credit sales proves to be uncollectible.Harry calculates Bad Debts Expense using the:

Correct Answer
verified

To record receipt of money after an account has been written off using the direct method in the previous year,you would need to:

Correct Answer
verified

Fit City estimates it will collect $3,300 of the $3,525 owed by customers.The difference of $225 represents the:

Correct Answer
verified

A company uses the allowance method and expects not to collect $21,000 of sales.The journal entry to record the estimated bad debt is:

Correct Answer
verified

Colleen's account was written off for $800.She received an inheritance from her uncle and wants to clear her account.The entry to record this is to:

Correct Answer
verified

Before the accounts are adjusted and closed at the end of the year,Accounts Receivable has a normal balance of $210,000 and Allowance for Doubtful Accounts has a credit balance $3,000.What is the net realizable value of the accounts receivable?

Correct Answer
verified

The two methods of accounting for uncollectible receivables are the allowance method and the:

Correct Answer
verified

Correct Answer
verified

Under the accrual method of accounting,the allowance method is generally required for financial reporting purposes.

Correct Answer
verified

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?

Correct Answer
verified

A debit balance in Allowance for Doubtful Accounts indicates the estimate for Bad Debts was too low.

Correct Answer
verified

Sylvia's,Inc. ,decreases Allowance for Doubtful Accounts $700 at year-end.As a result:

Correct Answer
verified

Sonny's Service Bureau is able to collect an amount previously written off last year under the direct write-off method.The journal entry will:

Correct Answer
verified

What would be the basis for the following entry on a firm's records? $\begin{array} { | r | l | } \hline \text { Bad Debt Expense } & 150 \\\hline \text { Allowance for Doubtful } \\\text { Accounts } & 150\\\hline\end{array}$

Correct Answer
verified

Empire has a credit balance of $450 in its Allowance for Doubtful Accounts.The balance in the Accounts Receivable account is $92,500,with $2,015 estimated to be uncollectible after aging the accounts.Under the balance sheet approach,the debit to Bad Debt Expense will be:

Correct Answer
verified

What type of account is a Bad Debts Expense?

Correct Answer
verified

The Allowance for Doubtful Accounts is listed on the balance sheet under the caption:

Correct Answer
verified

Town and Country Saddle learns the account receivable for a customer is uncollectible.The journal entry under the allowance method to write-off an account is to:

Correct Answer
verified

Correct Answer
verified

Exam 13: Accounting for Bad Debts

The Allowance for Doubtful Accounts is shown on the balance sheet.

Correct AnswerverifiedShow Answer

Harry's Hardware estimates that approximately $1.75 out of every $100 of credit sales proves to be uncollectible.Harry calculates Bad Debts Expense using the:

Correct AnswerverifiedShow Answer

To record receipt of money after an account has been written off using the direct method in the previous year,you would need to:

Correct AnswerverifiedShow Answer

Fit City estimates it will collect $3,300 of the $3,525 owed by customers.The difference of $225 represents the:

Correct AnswerverifiedShow Answer

A company uses the allowance method and expects not to collect $21,000 of sales.The journal entry to record the estimated bad debt is:

Correct AnswerverifiedShow Answer

Colleen's account was written off for $800.She received an inheritance from her uncle and wants to clear her account.The entry to record this is to:

Correct AnswerverifiedShow Answer

Before the accounts are adjusted and closed at the end of the year,Accounts Receivable has a normal balance of $210,000 and Allowance for Doubtful Accounts has a credit balance $3,000.What is the net realizable value of the accounts receivable?

Correct AnswerverifiedShow Answer

The two methods of accounting for uncollectible receivables are the allowance method and the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under the accrual method of accounting,the allowance method is generally required for financial reporting purposes.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

A debit balance in Allowance for Doubtful Accounts indicates the estimate for Bad Debts was too low.

Correct AnswerverifiedShow Answer

Sylvia's,Inc. ,decreases Allowance for Doubtful Accounts $700 at year-end.As a result:

Correct AnswerverifiedShow Answer

Sonny's Service Bureau is able to collect an amount previously written off last year under the direct write-off method.The journal entry will:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Empire has a credit balance of $450 in its Allowance for Doubtful Accounts.The balance in the Accounts Receivable account is $92,500,with $2,015 estimated to be uncollectible after aging the accounts.Under the balance sheet approach,the debit to Bad Debt Expense will be:

Correct AnswerverifiedShow Answer

What type of account is a Bad Debts Expense?

Correct AnswerverifiedShow Answer

The Allowance for Doubtful Accounts is listed on the balance sheet under the caption:

Correct AnswerverifiedShow Answer

Town and Country Saddle learns the account receivable for a customer is uncollectible.The journal entry under the allowance method to write-off an account is to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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