Accounting - Chapter 17 Review

A business generally sells on account to encourage sales

• True

• False

Accounts receivable that cannot be collected are called uncollectible accounts.

• True

• False

Allowing customers to buy now and pay later is an ineffective method for increasing sales.

• True

• False

The amount of accounts receivable that is uncollectible is an expense

• True

• False

A business usually knows at the end of the fiscal year which customer accounts will become uncollectible.

• True

• False

Allowance for Uncollectible Accounts is a contra account to its related asset account, Accounts Receivable.

• True

• False

Recording an estimate of uncollectible accounts to the contra asset account and the expense account is an application of the Matching Expenses with Revenue accounting concept.

• True

• False

The percentage of total sales on account method of estimating uncollectible accounts expense assumes that a portion of every sales dollar will become uncollectible.

• True

• False

The adjusting entry for Uncollectible Accounts Expense is recorded at the beginning of every accounting period.

• True

• False

The adjustment for uncollectible accounts is planned on the work sheet and then recorded in the general journal.

• True

• False