Question 1

The receivable that is usually evidenced by a formal, written instrument of credit is a(n)

Question 1 options:

	trade receivable
	note receivable
	accounts receivable
	income tax receivable

Question 2

The term "receivables" includes all

Question 2 options:

	money claims against other entities
	merchandise to be collected from individuals or companies
	cash to be paid to creditors
	cash to be paid to debtors

Question 3

Indications that an account may be uncollectible include all of the following except

Question 3 options:

	the customer closes its business
	the customer is making small but regular payments
	the customer files for bankruptcy
	the customer cannot be located

Question 4

Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900. Which of the following adjusting entries would be made to record the bad debt eexpense for the year?

Question 4 options:

	debit Allowance for Doubtful Accounts, $40,600; credit Bad Debt Expense, $40,600
	debit Allowance for Doubtful Accounts, $43,200; credit Bad Debt Expense, $43,200
	debit Bad Debt Expense, $43,200; credit Allowance for Doubtful Accounts, $43,200
	debit Bad Debt Expense, $40,600; credit Allowance for Doubtful Accounts, $40,600

Question 5

A debit balance in the Allowance for Doubtful Accounts

Question 5 options:

	is the normal balance for that account
	indicates that actual bad debt write-offs have been less than what was estimated
	cannot occur if the percentage of receivables method of estimating bad debts is used
	indicates that actual bad debt write-offs have exceeded previous provisions for bad debts

Question 6

At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $760. During the year, previously written off accounts of $120 are reinstated and accounts totaling $740 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be

Question 6 options:

	$760
	$120
	$140
	$740

Question 7

Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

Question 7 options:

	Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000
	Bad Debt Expense 19,500 Allowance for Doubtful Accounts 19,500
	Bad Debt Expense 22,000 Allowance for Doubtful Accounts 22,000
	Bad Debt Expense 65,000 Allowance for Doubtful Accounts 65,000

Question 8

An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $6,400. If Allowance for Doubtful Accounts has a $1,300 debit balance, the adjustment to record the bad debt expense for the period will require a

Question 8 options:

	debit to Bad Debt Expense for $7,700
	debit to Bad Debt Expense for $6,400
	debit to Bad Debt expense for $5,100
	credit to Allowance for Doubtful Accounts for $1,300

Question 9

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

Question 9 options:

	Uncollectible accounts are estimated to be $55,500.
	Uncollectible accounts are estimated to be $111,000.
	Bad debt expense is estimated to be $5,550.
	Bad debt expense is estimated to be $11,100.

Question 10

Current assets are usually listed in order

Question 10 options:

	of the due date
	of the size
	alphabetically
	of liquidity

Question 11

The accounts receivable turnover measures

Question 11 options:

	how frequently during the year the accounts receivable are converted to cash
	the number of days of accounts receivable outstanding
	the fair market value of accounts receivable
	the efficiency of the accounts payable function

Question 12

The number of days' sales in receivables

Question 12 options:

	is an estimate of the length of time the receivables have been outstanding
	measures the number of times the receivables turn over each year
	is net credit sales divided by average receivables
	is not meaningful and therefore is not used

Question 13

Given the following information, compute accounts receivable turnover:

Gross sales $150,000	Accounts receivable, beginning of year $18,000
Credit Sales 135,000	Accounts receivable, end of year 22,000

Question 13 options:

	6.75
	7.50
	6.13
	6.82