Reinstate 371 Uncollectible accounts expense 368 QUESTIONS 1. What is the difference between accounts receivable and notes receivable? 2. What is the net realizable value of receivables? 3. What type of account is the Allowance for Doubtful Accounts? 4. What are two ways in which estimating uncollectible accounts improves the accuracy of the financial statements? 5. When using the allowance method, why is uncollectible accounts expense an estimated amount? 6. What is the most common format for reporting accounts receivable on the balance sheet? What information does this method provide beyond showing only the net amount? 7. Why is it necessary to make an entry to reinstate a previously written off account receivable before the collection is recorded? 8. What are some factors considered in estimating the amount of uncollectible accounts receivable? 9. What is the effect on the accounting equation of recognizing uncollectible accounts expense? 10. What is the effect on the accounting equation of writing off an uncollectible account receivable when the allowance method is used? When the direct write-off method is used? 11. How does the recovery of a previously written-off account affect the income statement when the allowance method is used? How does the recovery of a previously written-off account affect the statement of cash flows when the allowance method is used? 12. What is the advantage of using the allowance method of accounting for uncollectible accounts? What is the advantage of using the direct write-off method? 13. How do companies determine the percentage estimate of uncollectible accounts when using the percent of revenue method? 14. What is an advantage of using the percent of receivables method of estimating uncollectible accounts expense? 15. What is aging of accounts receivable"? 16. What is the difference between the allowance method and the direct write-off method of accounting for uncollectible accounts? 17. When is it acceptable to use the direct write-off method of accounting for uncollectible accounts? 18. What is a promissory note? 19. Define the following terms