15 The expense recognition principle relates to credit losses by stating that bad debt expense should be recorded a in the same period as allowed for tax purposes. b. in the period of the sale. c. for an exact amount. d. in the period of the loss. Under the allowance method, when a specific account is written off a. total assets will be unchanged. b. net income will decrease. c. total assets will decrease. d. total assets will increase. 16 17 In 2014 Wilkinson Company had net credit sales of $1,500,000. On January 1, 2014 Allowance for Doubtful Accounts had a credit balance of $36,000. During 2014. $60,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis) If the accounts receivable balance at December 31 was $400,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2014? a. $ 40,000 b. $150,000 c. $ 64,000 d. $ 60,000 18 The maturity value of a $40,000, 12%, 3-month note receivable is a. $41,200. b. $40.480 c. $44.800 d. $40,400 19 A high accounts receivable turnover ratio indicates a, the company's sales are increasing, b. a large proportion of the company's sales are on credit c. customers are making payments very quickly. d. customers are making payments slowly 20 The financial statements of the Melton Manufacturing Company reports net sales of $300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year and end of year, respectively. What is the average collection period for accounts receivable in days? a. 96.1 b. 48.7 c. 36.5 d. 60.8