Question 1

At December 31, Warren Company reports the following results for its calendar year from the adjusted trial balance.
Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 7.0% of year-end accounts receivable.

Accepted Answer

$295,000 <font face="symbol">F1...

Question 2

Hasbro had net sales of $7,875 and its average accounts receivables is $1,350. Calculate Hasbro's accounts receivable turnover:

Accepted Answer

$7,875/$1,...

Question 3

Sellers generally prefer to receive notes receivable rather than accounts receivable when the credit period is long and the receivable is for a large amount.

Accepted Answer

A) True 
 B)False

Question 4

The Allowance for Doubtful Accounts:

Accepted Answer

A)   Is a contra asset account.
B)   Is used instead of reducing accounts receivable directly.
C)   Is debited when uncollectible accounts are written off.
D)   All of these.
E)   Is credited when bad debts expense is estimated and recorded.F) A) and E)
G) All of the above

Question 5

What is the maturity date of a 6-month note receivable dated February 5?

Accepted Answer

The answer of What is the maturity date of a...

Question 6

On August 9, Pierce Company receives a $8,500, 90-day, 8% note from customer Eric Simms as payment on his account. What entry should be made on August 9 to record receipt of the note?

Accepted Answer

A)   Debit Accounts Receivable $8,500; credit Sales $8,500.
B)   Debit Notes Receivable $8,670; credit Sales $8,670.
C)   Debit Notes Receivable $8,500; credit Accounts Receivable $8,500.
D)   Debit Notes Receivable $8,500; credit Sales $8,500.
E)   Debit Notes Receivable $8,725; credit Interest Revenue $225; credit Accounts Receivable $8,500.F) A) and D)
G) C) and D)

Question 7

The person that borrows money and signs a promissory note is called the payee.

Accepted Answer

A) True 
 B)False

Question 8

The ____________________ of a note is the day the principle plus interest of a note must be repaid.

Accepted Answer

The answer of The ____________________ of a note is the...

Question 9

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in:

Accepted Answer

A)   An increase in the expenses of the current period.
B)   A reduction in current assets.
C)   A reduction in equity.
D)   No effect on the expenses of the current period.
E)   A reduction in current liabilities.F) B) and E)
G) A) and E)

Question 10

A company factored $35,000 of its accounts receivable and was charged a 2% factoring fee. The journal entry to record this transaction would include a debit to Cash of $35,000, a debit to Factoring Fee Expense of $700, and credit to Accounts Receivable of $35,700.

Accepted Answer

A) True 
 B)False

Question 11

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1) computing the percent uncollectible from the total accounts receivable or (2) aging accounts receivable.

Accepted Answer

A) True 
 B)False

Question 12

_______________ refers to the expected proceeds from converting an asset into cash.

Accepted Answer

The answer of _______________ refers to the expected proceeds from...

Question 13

Explain the difference between honoring and dishonoring a note receivable.

Accepted Answer

When a note is honored, the ma...

Question 14

When using the allowance method of accounting for uncollectible accounts, the entry to record the bad debts expense is a debit to Bad Debts Expense and a credit to Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 15

A company has net sales of $900,000 and average accounts receivable of $300,000. What is its accounts receivable turnover for the period?

Accepted Answer

A)   0.20.
B)   5.00
C)   20.0
D)   73.0
E)   3.0F) A) and B)
G) None of the above

Question 16

Accounts receivable information for specific customers is important because it reveals:

Accepted Answer

A)   How much each customer has purchased on credit.
B)   How much each customer has paid.
C)   How much each customer still owes.
D)   The basis for sending bills to customers.
E)   All of these.F) A) and C)
G) A) and B)

Question 17

On September 30, Emerson Co. has $540,250 of accounts receivable. Emerson uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $13,750. 1. Prepare journal entries to record the following selected October transactions. The company uses the perpetual inventory system. 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its October 31 balance sheet.
a. Sold $325,000 of merchandise (that cost $178,500) to customers on credit.
b. Received $425,100 cash in payment of accounts receivable.
c. Wrote off $16,700 of uncollectible accounts receivable.
d. In adjusting the accounts on October 31, its fiscal year-end, the company estimated that 3.0% of accounts receivable will be uncollectible.

Accepted Answer

The answer of On September 30, Emerson Co. has $540,250...

Question 18

The practice of placing dishonored notes receivable into accounts receivable keeps only notes that have not matured in the Notes Receivable account.

Accepted Answer

A) True 
 B)False

Question 19

When a company holds a large number of notes receivable it sometimes sets up a controlling account and a subsidiary ledger for notes.

Accepted Answer

A) True 
 B)False

Question 20

After adjustment, the balance in the Allowance for Doubtful Accounts has the effect of reducing accounts receivable to its estimated realizable value.

Accepted Answer

A) True 
 B)False

Exam 9: Accounting for Receivables

On August 9, Pierce Company receives a $8,500, 90-day, 8% note from customer Eric Simms as payment on his account. What entry should be made on August 9 to record receipt of the note?

Correct Answer
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Correct Answer
verified

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1) computing the percent uncollectible from the total accounts receivable or (2) aging accounts receivable.

Correct Answer
verified

When a company holds a large number of notes receivable it sometimes sets up a controlling account and a subsidiary ledger for notes.

Correct Answer
verified

A company has net sales of $900,000 and average accounts receivable of $300,000. What is its accounts receivable turnover for the period?

Correct Answer
verified

A company factored $35,000 of its accounts receivable and was charged a 2% factoring fee. The journal entry to record this transaction would include a debit to Cash of $35,000, a debit to Factoring Fee Expense of $700, and credit to Accounts Receivable of $35,700.

Correct Answer
verified

_______________ refers to the expected proceeds from converting an asset into cash.

Correct Answer
verified

After adjustment, the balance in the Allowance for Doubtful Accounts has the effect of reducing accounts receivable to its estimated realizable value.

Correct Answer
verified

At December 31, Warren Company reports the following results for its calendar year from the adjusted trial balance. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 7.0% of year-end accounts receivable.

Correct Answer
verified
$295,000 F1...
View Answer

When using the allowance method of accounting for uncollectible accounts, the entry to record the bad debts expense is a debit to Bad Debts Expense and a credit to Accounts Receivable.

Correct Answer
verified

The practice of placing dishonored notes receivable into accounts receivable keeps only notes that have not matured in the Notes Receivable account.

Correct Answer
verified

The person that borrows money and signs a promissory note is called the payee.

Correct Answer
verified

Hasbro had net sales of $7,875 and its average accounts receivables is $1,350. Calculate Hasbro's accounts receivable turnover:

Correct Answer
verified
$7,875/$1,...
View Answer

Accounts receivable information for specific customers is important because it reveals:

Correct Answer
verified

What is the maturity date of a 6-month note receivable dated February 5?

Correct Answer
verified

Explain the difference between honoring and dishonoring a note receivable.

Correct Answer
verified
When a note is honored, the ma...
View Answer

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in:

Correct Answer
verified

The ____________________ of a note is the day the principle plus interest of a note must be repaid.

Correct Answer
verified

Sellers generally prefer to receive notes receivable rather than accounts receivable when the credit period is long and the receivable is for a large amount.

Correct Answer
verified

The Allowance for Doubtful Accounts:

Correct Answer
verified

Exam 9: Accounting for Receivables

On August 9, Pierce Company receives a $8,500, 90-day, 8% note from customer Eric Simms as payment on his account. What entry should be made on August 9 to record receipt of the note?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1) computing the percent uncollectible from the total accounts receivable or (2) aging accounts receivable.

Correct AnswerverifiedShow Answer

When a company holds a large number of notes receivable it sometimes sets up a controlling account and a subsidiary ledger for notes.

Correct AnswerverifiedShow Answer

A company has net sales of $900,000 and average accounts receivable of $300,000. What is its accounts receivable turnover for the period?

Correct AnswerverifiedShow Answer

A company factored $35,000 of its accounts receivable and was charged a 2% factoring fee. The journal entry to record this transaction would include a debit to Cash of $35,000, a debit to Factoring Fee Expense of $700, and credit to Accounts Receivable of $35,700.

Correct AnswerverifiedShow Answer

_______________ refers to the expected proceeds from converting an asset into cash.

Correct AnswerverifiedShow Answer

After adjustment, the balance in the Allowance for Doubtful Accounts has the effect of reducing accounts receivable to its estimated realizable value.

Correct AnswerverifiedShow Answer

At December 31, Warren Company reports the following results for its calendar year from the adjusted trial balance. Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 7.0% of year-end accounts receivable.

Correct Answerverified$295,000 F1...View AnswerShow Answer

When using the allowance method of accounting for uncollectible accounts, the entry to record the bad debts expense is a debit to Bad Debts Expense and a credit to Accounts Receivable.

Correct AnswerverifiedShow Answer

The practice of placing dishonored notes receivable into accounts receivable keeps only notes that have not matured in the Notes Receivable account.

Correct AnswerverifiedShow Answer

The person that borrows money and signs a promissory note is called the payee.

Correct AnswerverifiedShow Answer

Hasbro had net sales of $7,875 and its average accounts receivables is $1,350. Calculate Hasbro's accounts receivable turnover:

Correct Answerverified$7,875/$1,...View AnswerShow Answer

Accounts receivable information for specific customers is important because it reveals:

Correct AnswerverifiedShow Answer

What is the maturity date of a 6-month note receivable dated February 5?

Correct AnswerverifiedShow Answer

Explain the difference between honoring and dishonoring a note receivable.

Correct AnswerverifiedWhen a note is honored, the ma...View AnswerShow Answer

If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in:

Correct AnswerverifiedShow Answer

The ____________________ of a note is the day the principle plus interest of a note must be repaid.

Correct AnswerverifiedShow Answer

Sellers generally prefer to receive notes receivable rather than accounts receivable when the credit period is long and the receivable is for a large amount.

Correct AnswerverifiedShow Answer

The Allowance for Doubtful Accounts:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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$295,000 F1...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
$7,875/$1,...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When a note is honored, the ma...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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