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G. True/False Instructions: Place a T or F in the Blank 1. Notes receivable and accounts receivables can also be called trade receivables. 2. Receivables
G. True/False | ||||||||||
Instructions: Place a T or F in the Blank | ||||||||||
1. Notes receivable and accounts receivables can also be called trade receivables. | ||||||||||
2. Receivables from company owners and officers should be disclosed separately on the balance sheet. | ||||||||||
3. Receivables not currently collectible are reported in the investments section of the balance sheet. | ||||||||||
4. Since those responsible for receivables record keeping and credit approval do not handle cash, these | ||||||||||
duties do not need to be separated to maintain good internal control. | ||||||||||
5. Maintaining the Accounts Receivable control account and the Accounts Receivable Subsidiary Ledger | ||||||||||
should be assigned to the same employee for good internal control. | ||||||||||
6. When companies sell their receivables to other companies, the transaction is called factoring | ||||||||||
7. Of the two methods of accounting for uncollectible receivables, the allowance method provides in | ||||||||||
advance for uncollectible receivables. | ||||||||||
8. When the estimate based on analysis of receivables is used, income is reduced when a specific | ||||||||||
receivable is written off. | ||||||||||
9. When an account receivable that has been written off is subsequently collected, the account | ||||||||||
receivable is reinstated. | ||||||||||
10. Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit | ||||||||||
or a credit balance before adjusting entries are recorded at the end of the accounting period. | ||||||||||
11. At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a | ||||||||||
credit balance of $250, and net sales on account for the period total $500,000. If Bad Debts | ||||||||||
Expense is estimated at 1% of net sales on account, the current provision to be made for | ||||||||||
Bad Debts Expense is $4,750. | ||||||||||
12. At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a | ||||||||||
debit balance of $500, and net sales on account for the period total $800,000. If Bad Debts | ||||||||||
Expense is estimated at 1% of net sales on account, the current provision to be made for | ||||||||||
Bad Debts Expense is $8,500. | ||||||||||
13. Allowance for Doubtful Accounts is a liability account. | ||||||||||
14. At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a | ||||||||||
debit balance of $2,000. If the estimate of uncollectible accounts determined by aging the | ||||||||||
receivables is $30,000, the current provision to be made for Bad Debts Expense is $30,000. | ||||||||||
15. At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a | ||||||||||
credit balance of $5,000. If the estimate of uncollectible accounts determined by aging the | ||||||||||
receivables is $50,000, the current provision to be made for Bad Debts Expense is $45,000. | ||||||||||
16. The difference between Accounts Receivable and its contra asset account is called net realizable value. | ||||||||||
17. The estimate based on sales method violates the matching concept. | ||||||||||
18. Allowance for Doubtful Accounts is a liability account. |
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