Name: Class: Date: ID: A True/False Indicate whether the statement is true or false. 1. Receivables from company owners and officers should be disclosed separately on the balance sheet. 2. When companies sell their receivables to other companies, the transaction is called factoring 3. Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables. 4. The direct write-off method records uncollectible accounts expense in the year the specific account receivable is determined to be uncollectible, 5. Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible. 6. When an account receivable that has been written off is subsequently collected, the account receivable is reinstated. 7. 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. 8. Allowance for Doubtful Accounts is a liability account. 9. 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 uncollectible accounts expense is $45,000. Multiple Choice Identify the choice that best completes the statement or answers the question 10. The type of account and normal balance of Allowance for Doubtful Accounts is a. contra asset, credit b. asset, debit c. liability, credit d. expense, debit c. expense, credit 11. The two methods of accounting for uncollectible receivables are the allowance method and the a. equity method b. direct write-off method c. interest method d. cost method 12. Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited at the end of each accounting period. when a credit sale is past due. whenever a pre-determined amount of credit sales have been made. d. when an account is determined to be worthless. b. c. Name: ID: A 13. Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year before adjustment), and an analysis of accounts in the customers ledger indicates doubtful accounts of $15,000. Which of the following entries records the proper provision for doubtful accounts? a. debit Uncollectible Accounts Expense, $800; credit Allowance for Doubtful Accounts, $800 b. debit Uncollectible Accounts Expense, $14,200; credit Allowance for Doubtful Accounts, $14,200 c. debit Allowance for Doubtful Accounts, $800; credit Uncollectible Accounts Expense, $800 d. debit Allowance for Doubtful Accounts, $15,800; credit Uncollectible Accounts Expense, $15,800 14. Allowance for Doubtful Accounts is listed on the balance sheet under the caption a. owner's equity b. investments c. fixed assets d. current assets 15. Allowance for Doubtful Accounts has a credit balance of $1,100 at the end of the year before adjustment), and an analysis of customers' accounts indicates doubtful accounts of $12,900. Which of the following entries records the proper provision for doubtful accounts? a. debit Uncollectible Accounts Expense, $14,000; credit Allowance for Doubtful Accounts, $14.000 b. debit Allowance for Doubtful Accounts, $14,000; credit Uncollectible Accounts Expense, $14,000 c. debit Allowance for Doubtful Accounts, $11,800; credit Uncollectible Accounts Expense, $11,800 d. debit Uncollectible Accounts Expense, $11,800; credit Allowance for Doubtful Accounts, $11,800
