Chapter 9 - Receivables

Front

Which of the following is included in the category of other​ receivables? Investments, Notes receivable, Accounts receivable, Interest receivable

Back

Interest receivable

Front

Which of the following statements, regarding notes receivable, is incorrect?
Notes receivable have longer terms than accounts receivable
A note receivable is a written promise to pay principal + interest
Notes receivable are sometimes called promissory notes
All notes receivable are long-term assets

Back

All notes receivable are long-term assets

Front

Which of the following is an example of exercising good internal control over​ receivables?
- Allow credit department to collect cash from customers
- Combine duties of credit and accounting departments
- Extend credit to every customer who applies for credit
- Separate cash collection and credit approval duties

Back

Separate cash collection and credit approval duties

Front

AR balance at the end of the year is $82,000. We had $164,000 of net credit sales. We wrote off $19,000 of accounts. Cash sales were $14,000. We use the direct write-off method. How much is Bad Debt Expense?

Back

$19,000

Front

With the direct write-off method, the entry to write off an account is:

Back

Debit Bad Debts Expense
Credit Accounts Receivable

Front

Companies that follow GAAP are required to use the direct write-off method for bad debts.

Back

False

Front

How is the Allowance for Doubtful Accounts presented on the balance sheet?

Back

Contra account related to accounts receivable

Front

Accts. Receivable balance is $32,000, and Allowance for Bad Debts is $3,000. The allowance method is used. What is the net realizable value of AR before and after writing off a $2,000 receivable? Options: $29,000 before, $27,000 after; $27,000 before, $31,000 after; $27,000 before, $27,000 after; $29,000 before, $29,000 after

Back

$29,000 before, $29,000 after

Front

All of these are methods of estimating bad debts except: Direct write-off method, Percent-of-sales method, Percent-of-receivables method, Aging-of-receivables method

Back

Direct write-off method

Front

What is the net realizable value of AR after adjusting if AR on December 31 is $24,000, Allowance for Bad Debt is a $600 debit balance, $91,000 of credit sales were made, $400 of accounts were written off, and $2,850 of AR is estimated to be uncollectible?

Back

$21,150