Question 11 pts

Accounts receivable is an asset that reports the amounts generated by credit sales that are still owed to an organization by its customers.

Group of answer choices

True

False

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Question 21 pts

The net realizable value of a receivable is the expected amount of cash to be paid by a company for debts and obligations incurred in the normal course of operations.

Group of answer choices

True

False

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Question 31 pts

Knowledgeable decision makers understand that a degree of uncertainty exists in reporting balances, and can expect the amount of receivables collected will not be a materially different figure than what is reported.

Group of answer choices

True

False

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Question 41 pts

Company officials find it difficult to estimate the net realizable value of receivables and are often left to guess the amount.

Group of answer choices

True

False

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Question 51 pts

Companies use two separate T-accounts in order to monitor and report accounts receivable at its net realizable value.

Group of answer choices

True

False

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Question 61 pts

The Allowance for Doubtful Accounts is a liability account that increases with a credit and decreases with a debit.

Group of answer choices

True

False

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Question 71 pts

The net realizable value of accounts receivable is found by adding the accounts receivable balance with the allowance for doubtful accounts.

Group of answer choices

True

False

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Question 81 pts

Bad debt expense is reported on the balance sheet as a contra account to reduce accounts receivable.

Group of answer choices

True

False

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Question 91 pts

Bad debt expense should be reported in the same period as related revenue regardless of when the receivable is determined to be uncollectible.

Group of answer choices

True

False

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Question 101 pts

The write-off of a receivable will not change the net realizable value being reported.

Group of answer choices

True

False

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Question 111 pts

Which of the following would not be used to help a company determine the net realizable value of its accounts receivable?

Group of answer choices

A. Industry averages and trends

B. The companys ability to pay its own debts

C. Current economic conditions

D. Efficiency of the companys collection procedures

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Question 121 pts

2. Which of the following is not a reason why companies maintain two separate T-accounts for accounts receivables?

Group of answer choices

A. There is a level of uncertainty about the collection of receivables at the time of reporting.

B. It allows a company to manage the total receivables owed to them.

C. It communicates a more complete picture of what is owed to the company versus what is expected to be collected.

D. It enables the accounts identified as being uncollectible to be separated out from the good accounts.

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Question 131 pts

3. What type of account is Allowance for Doubtful Accounts?

Group of answer choices

A. An asset

B. An expense

C. A contra-asset

D. A liability

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Question 141 pts

4. Which accounting principle guides the timing of the reporting of bad debt expense?

Group of answer choices

A. Matching principle

B. Going concern principle

C. Cost/benefit analysis

D. Measurement principle

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Question 151 pts

5. SunFun Company manufactures lawn furniture that is sold to retail stores. During October, Year One, SunFun sold furniture to Home Place on account in the amount of $40,000. At the end of Year One, the balance was still outstanding. In March, Year Two, SunFun decided to write off this particular account as it did not appear that the balance would ever be collected. Choose the correct journal entry for this write-off.

Group of answer choices

a. Allowance for Doubtful Accounts 40,000 Accounts Receivable 40,000

B. Bad Debt Expense 40,000 Allowance for Doubtful Accounts 40,000

C. Bad Debt Expense 40,000 Accounts Receivable 40,000

D. Cash 40,000 Accounts Receivable 40,000

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Question 16

Otto Graham is the accountant for Ohio Corporation who is reviewing the accounts receivables of the company at the end of the calendar year. At this date, a $1,250,000 balance is owed to Ohio Corporation with a balance in the allowance account for $75,000. It has been brought to Ottos attention that the customer, Jim Brown, who owes $15,000 will not be able to pay and the account is written-off. What is the net realizable value of the receivables before the write-off and after the write-off?

Group of answer choices

A. $1,175,000; $1,160,000

B. $1,175,000; $1,175,000

C. $1,160,000; $1,160,000

D. Amount cannot be determined with the information provided.

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Question 17

7. A company is preparing to produce a set of financial statements. The balance sheet being created shows a total for assets of $800,000 and a total for liabilities of $600,000. Just prior to the end of the year, one account receivable is determined to be uncollectible and is written off. Another receivable for $5,000 is collected. No other event or adjustment is made. What should the company now report as the total of its assets after recording these final two events?

Group of answer choices

A. $784,000

B. $789,000

C. $800,000

D. $805,000

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Question 18

8. In Year One, the Lou Groza Company wrote off a $5,500 receivable as uncollectible. On June 5^th, Year Two, the customer returned and paid Lou Groza Company the entire amount. Which of the following explains the entry needed to record the receipt?

Group of answer choices

A. Two entries are required. The first will re-establish the receivable with a debit to accounts receivable and a credit to allowance. The second will receive payment which includes a debit to cash and a credit to accounts receivable.

B. Two entries are required. The first will re-establish the receivable on the books with a debit to allowance and a credit to accounts receivable. The second will receive payment which includes a debit to cash and a credit to accounts receivable.

C. An increase in cash with a credit and a decrease in receivables with a debit.

D. An increase in cash with a debit and a decrease in receivables with a credit.

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Question 191 pts

9. In Year One, the Simon Company wrote off a $14,000 receivable as uncollectible. However, on May 17, Year Two, the customer returned and paid Simon the entire amount. Which of the following is correct as a result of this payment?

Group of answer choices

A. Accounts receivable goes down, but the allowance for doubtful accounts is not changed.

B. Accounts receivable goes down, and the allowance for doubtful accounts also goes down.

C. Accounts receivable stays the same, but the allowance for doubtful accounts goes up.

D. Accounts receivable stays the same, and the allowance for doubtful accounts also stays the same.

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Question 201 pts

10. What are the two predominate methods for estimating uncollectible accounts?

Group of answer choices

A. The allowance method and the net realizable method.

B. The percentage of assets method and the percentage of liabilities method.

C. The allowance method and the bad debt expense method.

D. The percentage of sales method and the percentage of receivables method.