Multiple Choices 1-20
Please hi light the correct answers.
1. To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a
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debit to Loss on Credit Sales Revenue and a credit to Accounts Receivable. |
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debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable. |
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debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts. |
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debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts |
2. A company that receives an interest bearing note receivable will
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debit Notes Receivable for the maturity value of the note. |
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credit Notes Receivable for the maturity value of the note. |
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debit Notes Receivable for the face value of the note. |
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credit Notes Receivable for the face value of the note. |
3. Writing off an uncollectible account under the allowance method requires a debit to
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Bad Debt Expense. |
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Uncollectible Accounts Expense. |
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Allowance for Doubtful Accounts. |
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Accounts Receivable. |
4. Which of the following would be considered as an unlikely occurrence?
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Manufacturer offers a cash discount to a wholesaler. |
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Wholesaler offers a cash discount to a retailer. |
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Retailer offers a cash discount to a customer. |
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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
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face value plus interest. |
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net realizable value. |
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face value. |
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maturity value. |
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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:
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$3,000. |
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$3,030. |
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$3,045. |
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$3,180. |
8. The average collection period for accounts receivable is computed by dividing 365 days by
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average accounts receivable. |
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accounts receivable turnover. |
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ending accounts receivable. |
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net credit sales. |
9. A 90-day note dated May 14 has a maturity date of
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August 14. |
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August 13. |
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August 12. |
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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?
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$13,000 |
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$15,000 |
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$2,000 |
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$17,000 |
