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Exam 9: Receivables

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Question 61

Multiple Choice

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Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be

A) debit Allowance for Doubtful Accounts; credit Accounts Receivable
B) debit Accounts Receivable; credit Notes Receivable
C) debit Bad Debt Expense; credit Allowance for Doubtful Accounts
D) debit Bad Debt Expense; credit Accounts Receivable

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Question 62

Multiple Choice

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Match each description to the appropriate term (a-i) . -All money claims against other entities

A) Accounts receivable turnover
B) Net realizable value
C) Accounts receivable
D) Aging the receivables
E) Receivables
F) Direct write-off method
G) Allowance for doubtful accounts
H) Bad debt expense
I) Notes receivable

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Question 63

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Journalize the following transactions in the accounts of Simmons Company:? Mar. 1 Received a $60,000, 60-day, 6% note dated March 1 from Bynum Co. on account.18 Received a $25,000, 60-day, 9% note dated March 18 from Solo Co. on account. Apr. 30 The note dated March 1 from Bynum Co. is dishonored, and the customer's account is charged for the note, including interest. May 17 The note dated March 18 from Solo Co. is dishonored, and the customer's account is charged for the note, including interest. July 29 Cash is received for the amount due on the dishonored note dated March 1 plus interest for 90 days at 8% on the total amount debited to Bynum Co. on April 30. Aug. 23 Wrote off against the allowance account the amount charged to Solo Co. on May 17 for the dishonored note dated March 18.

​Small companies can use either the direct write-off method or the allowance method.

If collection of another receivable is expected beyond one year, it is classified as a (n)

The amount for which a promissory note is written is called the

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

To record estimated uncollectible receivables using the allowance method, the adjusting entry would be a

In computing the maturity date of a note, the date the note is issued is included but the due date is omitted.

The operating expense recorded from uncollectible receivables can be called all of the following except​

Notes Receivable and Accounts Receivable can also be called trade receivables.

Indications that an account may be uncollectible include all of the following except the customer

Selling receivables

Which of the following receivables would not be classified as an "other receivable"?

Miles uses the allowance method and wrote off the account of James. Miles then received $559 as partial payment on the account of James. The journal entry to record the initial write-off includes a

A debit balance in Allowance for Doubtful Accounts

Other than Accounts Receivable and Notes Receivable, name other receivables that might be included in the general ledger.

Abbott Company uses the allowance method of accounting for uncollectible accounts. Abbott estimates that 3% of credit sales will be uncollectible. On January 1, Allowance for Doubtful Accounts had a credit balance of $2,400. During the year, Abbott wrote off accounts receivable totaling $1,800 and made credit sales of $100,000. There were no sales returns during the year. After the adjusting entry, the December 31 balance in Bad Debt Expense will be

When using the direct write-off method of accounting for uncollectible receivables, the account Allowance for Doubtful Accounts is debited when a specific account is determined to be uncollectible.

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?