1.A process of classifying accounts receivable by how long they have been outstanding for the purpose of estimating the amount of uncollectible accounts is called:

a.Unpaid accounts schedule.

b.Recording accounts receivable.

c.Accruing accounts receivable.

d.Aging accounts receivable.

e.Reconciling accounts receivable.

2.The failure by a maker of a promissory note to pay the amount due at maturity is known as:

a.Protesting a note.

b.Closing a note.

c.Dishonouring a note.

d.Discounting a note.

e.Amortizing a note.

3.Allowance for Doubtful Accounts is:

a.An accounts receivable that has not been collected.

b.A potential liability that will become an actual liability if and only if certain events occur.

c.A contra-asset account with a balance equal to the estimated amount of accounts receivable that will be uncollectible.

d.An adjusted bad debts schedule.

e.An expense account related to uncollectible accounts receivable and reported on the income statement.

4.When a note receivable is dishonoured (Collection expected at later date), the journal entry to record the dishonour would include:

a.A debit to Bad Debts Expense for the amount of interest earned plus the principal of the note.

b.A debit to Accounts Receivable for the amount of the principal of the note.

c.A debit to Accounts Receivable for the amount of interest earned plus the principal of the note.

d.A debit to Dishonoured Notes Receivable for the amount of interest earned plus the principal of the note

e.A debit to Allowance for Doubtful Accounts for the amount of interest earned plus the principal of the note.

5.An accounting method that (1) estimates and records bad debts expense from credit sales in the same period as the sales, and (2) reports accounts receivable at the amount of cash proceeds that is expected from their collection ( i.e. their estimated Carrying Amount/Net Realizable Value), is the:

a.Allowance method of accounting for bad debts.

b.Aging method of accounting for bad debts.

c.Adjustment method of accounting for bad debts.

d.Direct write-off method of accounting for bad debts.

e.Cash basis method of accounting for bad debts.

6.Under the Allowance method of accounting for uncollectible accounts receivable, the journal entry to record the write-off of the uncollectible account of Amber Wilson is:

a.Debit Bad Debts Expense and credit Accounts Receivable - Amber Wilson.

b.Debit Bad Debts Expense and credit Allowance for Doubtful Accounts.

c.Debit Allowance for Doubtful Accounts and credit Accounts Receivable - Amber Wilson.

d.Debit Allowance for Doubtful Accounts and credit Bad Debts Expense.

e.Debit Accounts Receivable - Amber Wilson and credit Bad Debts Expense.

7.On May 1, 2019, Canyon Canoe Company accepted a $12,000, 4 month, 3% promissory note from Binh Tran in settlement of her overdue accounts receivable. On Sept.1, 2019, the note was dishonoured with no hope of collection. The journal entry on Sept.1, 2019 ( assuming that no prior interest has been recorded on the note) would be:

a.Accounts Receivable - Binh Tran--------------------- 12,120

Notes Receivable - Binh Tran---------------12,000

Interest Revenue-------------------------------120

b.Allowance for Doubtful Accounts-------------------- 12,000

Notes Receivable - Binh Tran----------------12,000

c.Allowance for Doubtful Accounts-------------------- 12,120

Notes Receivable - Binh Tran----------------12,000

Interest Revenue-------------------------------120

d.Accounts Receivable - Binh Tran--------------------- 12,000

Notes Receivable - Binh Tran---------------12,000

8.Which of the following businesses does not receive input tax credits from the government?

a.Clothing store

b.Grocery store

c.Furniture store

d.Dental office

9.A company collects an accounts receivable that was previously written off.

Under the Allowance method of accounting for uncollectible accounts receivable:

a.The carrying amount of Accounts Receivable will increase

b.The carrying amount of Accounts Receivable will remain the same

c.The Allowance for Doubtful Accounts account will decrease

d.The carrying amount of Accounts Receivable will decrease

10.The carrying amount ( net realizable value ) of Accounts Receivable is equal to:

a.Accounts Receivable minus Allowance for Doubtful Accounts

b.Accounts Receivable plus Allowance for Doubtful Accounts

c.Accounts Receivable minus Bad Debts Expense

d.Accounts Receivable plus Bad Debts Expense

11.GHI Company accepted a $6,000, 2 month, 5% note on June 1st in settlement of the past due accounts receivable of John Li. On August 1st, John Li paid the maturity value of his $6,000 note. What is the journal entry by GHI Company to record the payment?

( assuming no prior interest has been recorded ).

a.Cash -------------------------------------------------------------6,000.00

Interest Revenue ---------------------------------------------50.00

Notes Receivable - John Li -----------------------------6,050.00

b.Cash -------------------------------------------------------------6,300.00

Interest Revenue ---------------------------------------300.00

Notes Receivable - John Li-----------------------------6,300.00

c.Cash -------------------------------------------------------------6,050.00

Interest Revenue ---------------------------------------50.00

Notes Receivable - John Li ---------------------------6,000.00

d.Cash -------------------------------------------------------------6,300.00

Notes Receivable - John Li ---------------------------6,300.00

e.Cash -------------------------------------------------------------6,050.00

Notes Receivable - John Li--------------------------- 6,050.00