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Exam 8: Accounting for Receivables

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Question 91

Multiple Choice

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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?

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Question 92

Multiple Choice

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When an account becomes uncollectible and must be written off,

A) Allowance for Doubtful Accounts should be credited.
B) Accounts Receivable should be credited.
C) Bad Debt Expense should be credited.
D) Sales Revenue should be debited.

E) A) and D)
F) B) and C)

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Question 93

Multiple Choice

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The net amount expected to be received in cash from receivables is called the

Under the allowance method, writing off an uncollectible account

The net amount expected to be received in cash from receivables is termed the

Using the percentage-of-receivables basis, the uncollectible accounts for the year are estimated to be $38,000.If the balance for the Allowance for Doubtful Accounts is a $7,000 debit before adjustment, what is the amount of bad debt expense for the period?

On March 9, Phillips gave Jackson Company a 60-day, 12% promissory note for $5,200.Phillips honors the note on May 8.Record the collection of the note and interest by Jackson assuming that no interest has been accrued.

The average collection period is computed by dividing

Magneto Company had net credit sales during the year of $1,350,000 and cost of goods sold of $810,000.The balance in accounts receivable at the beginning of the year was $180,000, and the end of the year balance was $120,000.What was the accounts receivable turnover?

The interest on a $6,000, 6%, 60-day note receivable is

Compute the maturity value for each of the following notes receivable.

The face value of a note refers to the amount

Which of the following would require a compound journal entry?

An aging of accounts receivable schedule is based on the premise that the longer the period an account remains unpaid, the greater the probability that it will eventually be collected.

When the allowance method of accounting for uncollectible accounts is used, Bad Debt Expense is recorded

Eaton Company's ledger at the end of the current year shows Accounts Receivable of $150,000. Instructions a.If Allowance for Doubtful Accounts has a credit balance of $4,400 in the trial balance and bad debts are expected to be 10% of accounts receivable, journalize the adjusting entry for the end of the period. b.If Allowance for Doubtful Accounts has a debit balance of $4,400 in the trial balance and bad debts are expected to be 10% of accounts receivable, journalize the adjusting entry for the end of the period.

Generally accepted accounting principles require that the direct write-off method be used for financial reporting purposes if it is also used for tax purposes.

The maturity date of a 1-month note receivable dated June 30 is July 30.

When the allowance method is used to account for uncollectible accounts, Bad Debt Expense is debited when

Allowance for Doubtful Accounts is a contra asset account.