7. Western Company sold $700,000 of its accounts receivable and was charged a 3% factoring fee. How should Western Company record this transaction in the journal? (A) Cash 679,000 Factoring Fee Expense 21,000 Accounts Receivable 700,000 (B) Cash 700,000 Accounts Receivable 700,000 (C) Cash 700,000 Factoring Fee Revenue 21,000 Accounts Receivable 679,000 (D) Accounts Receivable 700,000 Factoring Fee Expense 21,000 Cash 679,000 (E) Accounts Receivable 679,000 Factoring Fee Revenue 21,000 Cash 700,000 (Points: 6) A Above. B Above. C Above. D Above. E Above. 8. The account receivable turnover measures: (Points: 6) How long it takes to sell accounts receivable to a factor. How often, on average receivables are received and collected during the period. The relation of cash sales to credit sales. How long it takes to sell merchandise inventory. All of the above. 9. Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Best. On July 10, the entry or entries Newton makes to record the recovery of the bad debt is: (A) Accounts Receivable P. Best........................................... 3,000 Allowance for Doubtful Accounts.................................. 3,000 Cash 3,000 Accounts Receivable P. Best...................................... 3,000 (B) Cash 3,000 Bad Debts Expense......................................................... 3,000 (C) Accounts Receivable P. Best........................................... 3,000 Bad Debts Expense......................................................... 3,000 Cash 3,000 Accounts Receivable P. Best...................................... 3,000 (D) Allowance for Doubtful Accounts....................................... 3,000 Accounts Receivable P. Best...................................... 3,000 Accounts Receivable P. Best........................................... 3,000 Cash................................................................................... 3,000 (E) Cash ....................................................................................... 3,000 Accounts Receivable P. Best...................................... 3,000 (Points: 6) A Above. B Above. C Above. D Above. E Above. 10. A company used 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 $245,000 debit Allowance for uncollectible accounts 300 credit Net Sales 900,000 credit All sales are made on credit. Based on past experience, the company estimates 0.5% of credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? (Points: 6) $925 $1,225 $4,200 $4,500 $45,000