Sales Cycle II

When customers owed money for goods/services provided, which account is debited at the point of sale?

• Cash

• Sales Revenue

• Accounts Receivable

• Accounts Payable

What is the proper account name to record debts that turned bad?

• Impairment Loss of Accounts Receivable

• Allowance for Impairment of Accounts Receivable

• Contra-Assets

• Net Account Receivable

To record an estimate of which Accounts Receivable will likely be uncollectible for next accounting period, we will:

Dr Impairment Loss of Accounts Receivable

Cr Accounts Receivable

• True

• False

Which of the following BEST describes the Allowance for Impairment of Accounts Receivable? [Choose 2 Options]

• It is an Asset.

• It is Debit in nature.

• It is a contra-asset.

• It is credit in nature.

When there more debts that are written off, we will debit the Allowance for Impairment of Accounts Receivable account as the balance in the allowances account has _________.

• increased

• decreased

Calculate the Net Accounts Receivable based on the following:

Accounts Receivable = $100

Allowance for Impairment of Accounts Receivable = $20