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Exam 9: Receivables

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Question 21

Multiple Choice

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If net sales total $50,000,beginning accounts receivable was $10,000,and ending accounts receivable is 16,000,what is the receivables turnover?

A) 1.9 times
B) 3.1 times
C) 3.8 times
D) 5 times

E) None of the above
F) B) and D)

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Question 22

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The direct charge-off method makes no attempt to match bad-debt losses with revenues.

A) True
B) False

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Question 23

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The general ledger account for Accounts Receivable shows a debit balance of $50,000.Allowance for Uncollectible Accounts has a credit balance of $3,000.Net sales for the year were $500,000.In the past,3 percent of sales have proved uncollectible,and an aging of accounts receivable resulted in an estimate of $20,000 of uncollectible accounts receivable. Using the accounts receivable aging method,the Allowance for Uncollectible Accounts balance (after adjustment) would be

One might infer from a debit balance in Allowance for Uncollectible Accounts that

Uncollectible accounts should not be estimated because it is impossible to know which accounts will not be collected.

You have just received notice that Agnes Fisher,a customer of yours with an Accounts Receivable balance of $200,has gone bankrupt and will not be making any future payments.Assuming you use the allowance method,the journal entry you make is to

Using the accounts receivable aging method,estimated uncollectible accounts are $40,000.If the balance of the Allowance for Uncollectible Accounts is an $8,000 debit before adjustment,what is the balance after adjustment?

The holder of a note adjusts for accrued interest by debiting Interest Receivable and crediting Interest Income.

The sale or transfer of accounts receivable to raise funds is called

A company has the following listed asset accounts.Determine the amount that should appear on the balance sheet as the total current assets.

Both the allowance method and the direct charge-off method are acceptable for tax purposes.

The following data exist for Weaver Company: Calculate the receivables turnover and the average days' sales uncollected for 2014.(Round to 1 decimal point and even days,respectively.)

The receivables turnover is expressed in terms of

The holder,or payee,of a dishonored note should transfer the total amount due,including interest income,from Notes Receivable to an individual account receivable for the debtor.

A promissory note is executed in June.When the note is paid the following January,the payee's entry includes (assuming a calendar-year accounting period and no reversing entries) a

The following data exist for Sexton Company: Calculate the receivables turnover and the average days' sales uncollected for 2014.(Round to 1 decimal point and even days,respectively.)

The direct charge-off method of recognizing uncollectible accounts is not in accordance with generally accepted accounting principles.

Because bad debt losses are incurred to generate sales,they should be charged against the sales that they helped generate.

On December 31,Ferndale Enterprises has an $800 debit balance in Allowance for Uncollectible Accounts.If an accounts receivable aging method analysis indicated that an estimated $6,400 of December 31 receivables are uncollectible,for what amount would the adjusting entry for uncollectible accounts be recorded? (Show your work.)

The account Allowance for Uncollectible Accounts is classified as a(n)