MATCHING Instructions: Match each of the statements below with its proper term. Some terms may not be used. A. B. C. D. E. F. G. accounts receivable accounts receivable turnover aging the receivables allowance method bad debt expense contra asset direct write-off method H. dishonored note receivable I. maturity value J. notes receivable K. number of days' sales in receivables L. promissory note M. receivables 1. All money claims against other entities, including people, business firms, and other organizations. 2. A receivable created by selling merchandise or services on credit 3. Amounts customers owe, for which a formal, written instrument of credit has been issued. 4. The operating expense incurred because of the failure to collect receivables 5. The method of accounting for uncollectible accounts that provides an expense for uncollectible receivables in advance of their write-off. 6. The method of accounting for uncollectible accounts that recognizes the expense only when accounts are judged to be worthless. 7. The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age. 8. The amount that is due at the maturity or due date of a note. A note that the maker fails to pay on the due date. outstanding are being converted to cash. time. 9. 10. An estimate of the length of time the accounts receivable have been 11. Measures how frequently during the year the accounts receivable 12. A written promise to pay a sum of money on demand or at a definite 140 Chapter 9 Instructions: Answer the following questions or complete the statements writing the appropriate words or amounts in the answer blanks. FILL IN THE BLANK-PART A by 1. All money claims against other entities, including people, business firms, is a formal, written instrument and other organizations are called 2. A(n) of credit that has been received for the amount a customer owes. method of accounting for uncollectible accounts provides an expense for uncollectible receivables in advance of is a process of 3. The their write-off. 4. The analyzing the accounts receivable and classifying them according to various age groupings, with the, due date being the base point for determining age. 5. Allowance for Doubtful Accounts has a debit balance of $1,500 at the end of the year, before adjustments. Sales for the year amounted to $740,000, and sales returns and allowances amounted to $25,000. If uncollectible accounts expense is estimated at 1% of net sales, the amount of the appropriate adjusting entry will be 6. Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year, before adjustments. Sales for the year amounted to $950,000, and sales returns and allowances amounted to $20,000. If the analysis of the accounts in the customers' ledger indicates doubtful accounts of $30,000, the amount of the appropriate adjusting entry will be 7. The maturity value of a $300,000, 90-day, 12% note receivable is 8. The due date of a 90-day note receivable dated July 12 is 9. A note that the maker fails to pay on the due date is referred to as a(n) note 10 measures how frequently during the year the accounts receivable are being converted to cash. 141 Chapter 9 FILL IN THE BLANK-PART B Instructions: Answer the following questions or complete the sta writing the appropriate words or amounts in the answer blanks. tements 1. A(n) receivable is created by selling merchandise or services on credit. 2. The operating expense incurred because of the failure to collect receivables is recorded as 3. The expense method of accounting for uncollectible accounts recognizes an expense only when accounts are judged to be worthless. 4. At the end of the fiscal year, after the accounts are closed, Accounts Receivable has a balance of $350,000 and Allowance for Doubtful Accounts has a credit balance of $40,000. The expected realizable value of the receivables is 5. Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year, before adjustments. If an analysis of receivables indicates doubtful accounts of $11,200, the amount of the appropriate adjusting 6. The amount that is due at the maturity or due date of a note is called the 7. The maturity value of a $150,000, 60-day, 15% note receivable is 8. The due date of a 120-day note receivable dated on August 18 is entry is_ 9. The is an estimate of the length of time the accounts receivable have been outstanding, expressed in days 10. A written promise to pay a sum of money on demand or at a definite time is called a(n)_
