10. Award: 4.00 points The materiality constraint, as applied to bad debts: O Permits the use of the direct write-off method when bad debts expenses are relatively small Requires use of the allowance method for bad debts. Requires use of the direct write-off method. Requires that bad debts not be written off. Requires that expenses be reported in the same period as the sales they helped produce. References Multiple Choice Difficulty: 2 Medium Learning Objective: 07-P1 Apply the direct write-off method to accounts receivable. 11. Award: 4.00 points Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2.000 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is: O O PARA Accounts Receivable-A. Hopkins Allowance for Doubtful Accounts 2.000 2,000 O Allowance for Doubtful Accounts Bad debts expense 2.000 2.000 O 2.000 Accounts Receivable -A. Hopkins Bad debts expense Cash Accounts Receivable-A. Hopkins 2.000 2.000 2,000 O Allowance for Doubtful Accounts Accounts Receivable-A. Hopkins 2.000 2.000 2020 2,000 O Cash Accounts Receivable-A. Hopkins 2,000 References Multiple Choice Difficulty: 2 Medium Learning Objective: 07-P2 Apply the allowance method to accounts receivable. 12. Award: 4.00 polnts Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins. On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is: O Accounts Receivable--A. Hopkins Allowance for Doubtful Accounts 2.000 2.000 2,000 Accounts Receivable-A. Hopkins 2.000 O Cash Bad debts expense 2.000 2.000 O 2.000 Accounts Receivable-A. Hopkins Bad debts expense Cash Accounts Receivable-A. Hopkins 2.000 2.000 2.000 O 2.000) Allowance for Doubtful Accounts Accounts Receivable-A. Hopkinse Accounts Receivable-A Hopkins Cash 2,000 2.000 O Cash Accounts Receivable-A Hopkins 2.000 2,000 References Multiple Choice Difficulty: 2 Medium Learning Objective: 07-P2 Apply the allowance method to accounts receivable. 3/2020 13. Award: 4.00 points A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable Allowance for uncollectible accounts Net Sales $375,000 debit 500 debit 800,000 credit All soles are made on credit. Based on past experience, the company estimates 0.6% of net credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? Debit Bad Debts Expense $2,130, credit Allowance for Doubtful Accounts $2,130. O Debit Bad Debts Expense $2,630, credit Allowance for Doubtful Accounts $2,630, O Debit Bad Debts Expense $4,300, credit Allowance for Doubtful Accounts $4,300, O Debit Bad Debts Expense $4,800: credit Allowance for Doubtful Accounts $4,800. Debit Bad Debts Expense $5,300; credit Allowance for Doubtful Accounts $5,300. References Multiple Choice Difficulty: 3 Hard Learning Objective: 07.P3 Estimate uncollectibles based on sales and accounts receivable. 14. Award: 4.00 points A company has $90.000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance before adjustments) in the allowance for doubtful accounts is an $800 debit. The Journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for: $3,600 $3,568 $3,632 Assignment Print View 16/2020 $2,800 $4,400 References Multiple Choice Difficulty: 3 Hard Learning Objective: 07-P3 Estimate uncollectibles based on sales and accounts receivable. 15. Award: 4,00 points Jasper makes a $25,000, 90-day, 7% cash loan to Clayborn Co. Jasper's entry to record the transaction should be: Debit Notes Receivable for $25,000; credit Cash $25,000. Debit Accounts Receivable $25,000: credit Notes Receivable $25,000. Debit Cash $25,000; credit Notes Receivable for $25,000. Debit Notes Payable $25,000 credit Accounts Payable $25,000 Debit Notes Receivable $25,000; credit Sales $25,000 References Multiple Choice Difficulty: 2 Medium Learning Objective: 07-C2 Describe a note receivable, the computation of its maturity date, and the recording of its existence. 16. Award: 4.00 points Duerr Company makes a $60,000, 60-day, 12% cash loan to Ryan Co. The note and interest to be collected at maturity is: (Use 360 days a year) $60,000 $1200