Chapter 9 Questions

1)The accounts receivable account in the general ledger serves as a control account because it summarizes the total of the receivables from all customers . True or False?

2)Which of the following is a benefit of selling on credit?

A)Some customers do not pay, creating an expense.

B)Cash is received sooner.

C)Expenses are reduced by making sales to a wide range of customers.

D)Revenues are increased by making sales to a wider range of customers.

3)The allowance for doubtful accounts is a contra account to cash. True or False?

4)Under the allowance method, the entry to write off an account that has been deemed uncollectible has an impact on the net income of the firm. True or False

5)Allowance for doubtful accounts has a debit balance of $980 at the end of the current year (prior to adjustment). An analysis of the accounts in the customers ledger indicates uncollectible accounts of $16,000. The adjusting entry would require a credit to:

A)allowance for doubtful accounts for $15,020.

B)accounts receivable accounts for $15,020.

C)bad-debt expense for $16,980.

D)allowance for doubtful accounts for $16,980.

6)Under the direct write-off method, the entry to write off an uncollectible account would include a:

A)credit to allowance for doubtful accounts.

B)debit to allowance for doubtful accounts.

C)credit to the customers account receivable.

D)credit to bad-debts expense.

7)Both credit cards and debit cards bear a risk for the card holder, the issuer, and the business accepting the card.True or False?

8)If the maker of a note does not pay at maturity, the maker is said to dishonour the note. True or False?

9)The acid-test ratio tells whether the entity could pay all its current liabilities if they came due immediately. True or False?

10)The practice of selling a note receivable before maturity is called dishonouring the note. True or False?

Textbook we use in class is the Horngren's Accounting 11th Canadian Edition