Question
On December 31, the Accounts Receivable ending balance is $80,000. Assume that the unadjusted balance of Allowance for Uncollectible Accounts is a debit of $500
On December 31, the Accounts Receivable ending balance is $80,000. Assume that the unadjusted balance of Allowance for Uncollectible Accounts is a debit of $500 and that the company estimates 7% of the accounts receivable will not be collected. The amount of bad debt expense recorded on December 31 will be:
$5,000.
$5,100.
$5,600.
$6,100.
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A company has the following aging schedule of its accounts receivable with the estimated percent uncollectible:
Age Group | Amount Receivable | Estimated Percent Uncollectible | |||||||
Not yet due | $ | 175,000 | 4 | % | |||||
0-60 days past due | $ | 40,000 | 10 | % | |||||
61-120 days past due | $ | 10,000 | 30 | % | |||||
More than 120 days past due | $ | 5,000 | 60 | % | |||||
Assuming the balance of Allowance for Uncollectible Accounts is $3,000 (credit) before adjustment, which of the following would be recorded in the year-end adjusting entry?
Credit Allowance for Uncollectible Accounts for $20,000.
Debit Allowance for Uncollectible Accounts for $14,000.
Debit Bad Debt Expense for $14,000.
Credit Allowance for Uncollectible Accounts for $17,000.
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On April 1, 20X1, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest are due on March 31, 20X2 (one year later). On March 31, 20X2, Nelson Inc. will record interest revenue of:
$8,000.
$6,000.
$2,000.
$0.
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Under the direct write-off method, uncollectible accounts are recorded:
In the period the account is estimated to be uncollectible.
In the period the account is determined actually uncollectible.
In the period following the account being actually uncollectible.
Never.
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The amount of cash owed to the company by its customers from the sale of products or services on account is known as:
Retained Earnings.
Accounts Receivable.
Accounts Payable.
Service Revenue.
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