5 Accounting Questions

When an account is written off under the allowance method ____.

Question 20 options:

Net income and net assets will decrease

Net income will decrease, but stockholders' equity (including retained earnings) will remain the same.

Net income and net assets will be unaffected

Net income will be unaffected, but net assets will decrease

If an account is reinstated under the allowance method, the entry will include a credit to ____.

Question 29 options:

	Accounts receivable
	Uncollectible accounts expense
	Allowance for doubtful accounts
	Cash

If a company fails to estimate uncollectible accounts, then ____.

Question 30 options:

	Net income is overstated and assets are understated
	Net income and assets are overstated
	Net income and assets are understated
	Net income is understated and assets are overstated

Revenues and expenses will be best matched when a business uses the ____.

Question 31 options:

Direct write-off method

Allowance method where an estimate of expense is made based on a % of sales.

Reserve method which involves factoring receivables that are outstanding.

If a company is holding a note receivable at the end of the fiscal year, the entry to record the interest earned would include a ____.

Question 35 options:

	Credit to interest revenue
	Debit to interest revenue
	Debit to cash
	Credit to interest receivable