1.Our company uses a perpetual inventory system. On July 3, we sold merchandise with a cost of $3,000 for $6,500 to a customer on account. The terms of the sale were 2/10, n/30. What account and amount would we credit to record the cost of goods sold for this transaction?

sales revenue, $6,500

merchandise inventory, $3,000

cost of goods sold, $3,000

accounts receivable, $6,500

2.Our company signed a 90-day 10% note for $100,000. Using a 360-day year, what is the total interest due on the maturity date?

$1,250.00

$1,562.50

$1,875.00

$2,500.00

3.Our company has an account receivable for $12,500 that we have now deemed uncollectible. We use the direct write-off method. Which of the following accounts would we credit to record the write-off?

accounts receivable

allowance for doubtful accounts

bad debt expense

cash

4.Our company uses the percentage of sales method to estimate bad debt expense for the year. Our allowance for bad debts account has a credit balance of $1,000 prior to the adjusting entry for bad debt expense. We have estimated that 2% of net credit sales will be uncollectible for the current year. Net credit sales for the year totaled $200,000. What amount will be debited to bad debt expense when we record the adjusting entry?

$3,000

$4,000

$5,000

$6,000

5.Our company uses the percentage of receivables method to estimate bad debt expense for the year. We had the following account balances on our unadjusted trial balance at the end of the year (December 31): accounts receivable, debit balance of $150,000; allowance for bad debts, debit balance of $1,000. We estimate that 3.5% of accounts receivable at the end of the year are uncollectible. What amount will be debited to bad debt expense when we record the adjusting entry?

$4,000

$4,250

$5,250

$6,250

6.Which method to estimate bad debts is required by GAAP for most companies?

allowance method

direct write-off method

units of production method

FIFO method