1) Shareholders and short-term creditors are interested in a companys long-run solvency (True / False)

2) Cash discounts reduce the amount received on accounts receivable (True / False)

3) Unearned revenues, and accrued liabilities are long-term liabilities (True / False)

4) Nontrade receivables are notes receivables (True / False)

5) A company has net credit sales of $800,000 for the year and it estimates that uncollectible accounts will be 2% of sales. If Allowance for Doubtful Accounts has a credit balance of $1,000 prior to adjustment, its balance after adjustment will be a credit of

a. $15,980

b. $15,000

c. $16,000

d. $17,000

6) An aging of a company's accounts receivable indicates that $7,500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a

a. debit to Bad Debt Expense for $6,400.

b. debit to Allowance for Doubtful Accounts for $6,400.

c. credit to Allowance for Doubtful Accounts for $7,500.

d. debit to Bad Debt Expense for $7,500