Doubtful Debt Quiz

Doubtful Debt Quiz

11th Grade

10 Qs

quiz-placeholder

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Doubtful Debt Quiz

Doubtful Debt Quiz

Assessment

Quiz

Business

11th Grade

Practice Problem

Hard

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10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the purpose of an allowance for doubtful debt?

To celebrate successful debt collections

To track employee attendance

To increase company profits

To account for the possibility of customers not paying their debts.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does recognizing an allowance for doubtful debt impact the balance sheet?

It increases accounts receivable and total assets on the balance sheet.

It reduces accounts receivable and total assets on the balance sheet.

It reduces accounts payable and total liabilities on the balance sheet.

It has no impact on the balance sheet.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Explain the difference between specific and general provisions for doubtful debt.

General provisions are made for individual debts

Specific provisions are made for general debts

Specific provisions are made without any basis

Specific provisions are made for individual debts based on specific information, while general provisions are made for potential losses in the overall portfolio without specific identification.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What factors should be considered when estimating the allowance for doubtful debt?

Weather forecast, favorite color, recent news headlines

Number of employees, office location, company logo design

Historical bad debt experience, current economic conditions, industry trends, customer creditworthiness, aging of accounts receivable, specific circumstances affecting customers' ability to pay

Social media followers, website traffic, employee satisfaction survey results

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does the aging of accounts receivable help in determining the allowance for doubtful debt?

The aging of accounts receivable helps in determining the allowance for doubtful debt by predicting future sales accurately.

The aging of accounts receivable helps in determining the allowance for doubtful debt by providing insight into the likelihood of collection for different categories of outstanding invoices based on their age.

The aging of accounts receivable helps in determining the allowance for doubtful debt by reducing the need for bad debt write-offs.

The aging of accounts receivable helps in determining the allowance for doubtful debt by increasing the credit limit for customers.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What journal entry is made to record the allowance for doubtful debt?

Credit Bad Debt Expense and Debit Allowance for Doubtful Accounts

Debit Accounts Receivable and Credit Allowance for Doubtful Accounts

Debit Bad Debt Expense and Credit Allowance for Doubtful Accounts

Debit Allowance for Doubtful Accounts and Credit Accounts Payable

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the impact on the income statement when the allowance for doubtful debt is increased?

The allowance for doubtful debt will be removed from the income statement.

There will be no impact on the income statement.

The impact on the income statement when the allowance for doubtful debt is increased is that the net income will decrease due to higher bad debt expenses.

The net income will increase due to higher bad debt expenses.

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