Answer the folloiwng 10 multiple choice accounting questions :

1.)FOB destination indicates:

The buyer takes ownership at the shippers dock

The shipper maintains ownership of the material until it reaches the buyer

Shipping is free

The shipper and buyer have joint ownership during shipping

The product is shipped via UPS

2.)If the seller gives credit terms of Net EOM 10 for a sale of $100 made on September 15, the buyer would need to pay:

$100 on October 10

$100 on September 30

$100 on October 30

$100 on September 15

$100 on October 15

3.)If the seller gives credit terms of 2/10, net 30 on a sale of $100 on September 30, the buyer would need to pay:

$100 on September 30

$90 on October 10

$98 on October 30

$100 on October 10

$98 on October 10

4.)When sales are made on credit the entry is:

Debit to Accounts Receivable, Credit to Sales

Credit to Sales, Debit to Expenses

Credit to Accounts Receivable, Debit to Sales

Debit to Accounts Payable, Credit to Sales

Credit to Accounts Payable, Debit to Sales

5.)To represent the potential of some buyers to not pay their invoices the seller will:

Record a certain amount of Sales or Accounts Receivable to Accumulated Depreciation

Not extend credit

Charge everyone more

Record a certain amount of Sales or Accounts Receivable to Allowance for Doubtful Accounts

Eliminate offering a cash discount

6.)If a company does not use an allowance method and finds that a $500 invoice is not going to be paid the entry for that should be:

Credit Bad Debt Expense, Debit Accounts Receivable

Debit Bad Debt Expense, Credit Accounts Payable

Debit Bad Debt Expense, Credit Accounts Receivable

Debit Bad Debt Expense, Credit Allowance for Doubtful Accounts

Credit Bad Debt Expense, Debit Accounts Payable

7.)If a customer pays an item that was written off from Accounts Receivable the company must first:

Reinstate the Accounts Payable

Reinstate the Accounts Receivable

Reduce the Bad Debt Expense

Decrease the Allowance for Doubtful Accounts

Increase the Bad Debt Expense

8.)If the seller gives credit terms of 2/10, net 30 this means:

If the buyer pays in 10 days they can take a 10% discount

If the buyer pays in 30 days they can take a 10% discount

If the buyer pays in 10 days they can take a 2% discount

If the buyer pays in 30 days they only pay 10% of the initial cost

If the buyer pays in 30 days they can take a 2% discount

9.)If a company records an allowance to potential bad debt, when a specific account is written off the entry will be:

Debit to Bad Debt Expense, Credit to Accounts Receivable

Debit to Accounts Receivable, Credit to Bad Debt Expense

Debit to Allowance for Doubtful Accounts, Credit to Accounts Receivable

Debit to Accounts Receivable, Credit to Allowance for Doubtful Accounts

10.)If a company uses the percentage of credit sales to calculate the potential bad debt, what is one side of the transaction for a company with the following information? Credit Sales - $100,000, Accounts Receivable - $75,000, Percentage - .5%:

Credit Bad Debt Expense for $500

Credit Bad Debt Expense for $10,000

Debit Bad Debt Expense for $10,000

Debit Bad Debt Expense for $375

Debit Bad Debt Expense for $500