Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Accounting True or False 1.Notes receivable are sometimes used to settle a customers accounts receivable. 4Question 3 options: True False 2.The allowance method is required
Accounting True or False
1.Notes receivable are sometimes used to settle a customers accounts receivable.
True | |
False |
2.The allowance method is required by generally accepted accounting principles and the direct write-off method is not allowed.
True | |
False |
3.Interest revenue collected on a note receivable is considered an additional sale. (okay, this is false because we arent the business of selling loans. So to us, this is an other income and not a sale - answer this false.)
True | |
False
|
4. Allowance for doubtful accounts is a contra-asset account with a credit balance.
True | |
False |
5. The entry to write off an uncollectible account under the allowance method reduces net income.
True | |
False |
6.It is possible to have a debit or credit balance in the allowance for doubtful accounts prior to adjustment.
True | |
False |
7.When a previosly written off account is collected, the first of a two step process is to reverse the write off, and then receipt the cash collected.
True | |
False |
8.A claim supported by a note has a stronger legal claim than an account receivable.
True | |
False |
9.Credit limits are determined by the credit worthiness of the customer.
True | |
False |
10.The allowance method estimates uncollectible accounts expense prior to write-off.
True | |
False |
11.The direct write-off method and the allowance methods are different names for the same accounting technique.
True | |
False |
12.Businesses grant credit in order to attract customers that would not otherwise purchase the companys goods and services.
True | |
False |
13.The number of days sales in receivables is a measure of the time receivables have been outstanding.
True | |
False
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started