Question 11 of 20

5.0 Points

Indy Sport and Hobbys Allowance for Doubtful Accounts had an unadjusted credit balance of $400. The manager estimates that $900 of the Accounts Receivable is uncollectible. Using the balance sheet approach, the year-end adjusting entry for Bad-Debts Expense includes a

A. credit to the Bad-Debt Expense account for $500.

B. debit to the Bad-Debts Expense account for $900.

C. credit to the Bad-Debts Expense account for $1,300.

D. debit to the Bad-Debts Expense account for $500

Question 12 of 20

5.0 Points

The goods a company has available to sell to customers are called

A. supplies.

B. sales.

C. cost of goods sold.

D. merchandise inventory.

Question 13 of 20

5.0 Points

Under the allowance method, Bad Debt Expense is recorded

A. as an estimate.

B. when an individual account is written off.

C. several times during the year as needed.

D. None of the above

Question 14 of 20

5.0 Points

Cost of goods sold equals

A. beginning inventory + net purchases + freight-in + ending inventory.

B. beginning inventory net purchases freight-in + ending inventory.

C. beginning inventory + net purchases + freight-in ending inventory.

D. beginning inventory net purchases + freight-in + ending inventory.

Question 15 of 20

5.0 Points

Beginning and ending inventories for Websters Books are $9,000 and $6,000, respectively. The debit amounts (not including Income Summary) in the income statement columns of the worksheet total $14,000, and the credit amounts (not including Income Summary) total $15,500. The firm has a

A. net income of $1,500.

B. net loss of $1,500.

C. net loss of $3,000.

D. net income of $3,000.

Question 16 of 20

5.0 Points

An account never used in a service business is

A. Consulting Fees-Revenue.

B. Interest Payable.

C. Merchandise Inventory.

D. Accumulated DepreciationEquipment.

Question 17 of 20

5.0 Points

Which method uses an aging of Accounts Receivable to calculate the Bad-Debts Expense?

A. Income statement approach

B. Balance sheet approach

C. Aging the Accounts Receivable

D. Direct write-off

Question 18 of 20

5.0 Points

Net realizable value can be defined as the

A. Gross Accounts Receivable.

B. Current Bad Debts Expense.

C. amount of Accounts Receivable you dont expect to collect.

D. Gross Accounts Receivable minus the Allowance for Doubtful Accounts.

Question 19 of 20

5.0 Points

When using a periodic inventory method, which account is increased when you buy merchandise inventory?

A. Cost of Goods Sold

B. Beginning Inventory

C. Ending Inventory

D. Purchases

At the start of the year, Northern Lights had $8,000 worth of merchandise. What do we know about Northern Lights?

A. Its a service business.
B. Its a retail business.
C. The company ended with a net income last year.
D. The company ended with a net loss last year.