A company expects a loss from uncollectible accounts equal to one-fourth of one percent of the sales on account during the year. If the sales on account amounted to $400,000, the estimated uncollectible accounts losses would be $100 $400 $1,000 $4,000 $10,000 Most businesses rarely increase sales by extending credit to customers The percentage of receivables method of estimating uncollectibles is based on the relationship between the amount of accounts receivable and the amount of uncollectible accounts. True False Kramer's, Inc. estimates its uncollectible accounts at 2% of its credit sales of $800,000. The debit to Bad Debt Expense is $160,000 $160 $16,000 $1,600 True False the face value of a note minus interest is called can't be determined the discount the principal None of the above proceeds the maturity value After aging the accounts receivable, Grasso Company estimated that $5,000 will not be collected. The Allowance for Bad Debts has an existing debit balance of $750. The adjusting entry under the aging approach would be for the amount of Last year, Hart Company had credit sales in the amount of $1,000,000, and it had uncollectible accounts in the amount of $15,000. Based on last year, what would the estimated percent of uncollectible accounts be this year? cannot be determined. 15% 150% 1.5% 0.15% $0 $750 $5,750 $5,000 $4,250 The maturity value of a note is the same as the principal True False A non-interest bearing note includes an interest component True False The expense associated with an uncollectible account is recognized when it has been determined that a customer will not pay the amount owed under the Net realizable value is computed as Cash - Accounts Receivable Accounts Receivable-Allowance for Bad Debts; Accounts Receivable-Bad Debt Expense Allowance for Bad Debts-Accounts Receivable Sales - Bad Debt Expense If an accounts receivable is written off under the direct write-off method in one accounting period and is collected in the following period, which of the following is required in the second period when reinstating the account? a credit to Bad Debt Expense a debit to Accounts Receivable a credit to Cash All of the above direct write-off method reserve method: uncollectible method allowance method None of the above