PA Sesi 8

What is the term for claims that are backed by a formal agreement but not necessarily a contract?

• Accounts receivable

• Notes payable

• Other receivables

• Trade receivables

When a note receivable is dishonored (unpaid), which account is debited if the collection is not expected?

• Account Receivable

• Interest Receivable

• The original value of the note

• Accounts Payable

What happens to notes receivable when accepted to settle a debt without additional interest?

• Notes receivable is debited for the remaining amount

• Notes receivable is debited for its full face value

• Notes receivable is credited for its face value

• Notes receivable is debited for its net realizable value

Which method is used to directly record bad debts without estimating?

• Indirect method

• Allowance method

• Direct write-off method

• Percentage-of-receivables method

Writing off an uncollectible account using the direct write-off method requires debiting which account?

• Bad Debt Expense

• Allowance for Doubtful Accounts

• Accounts Payable

• Interest Revenue

When an account is written off using the allowance method, what happens to accounts receivable and the allowance account?

• Accounts receivable remains unchanged, and the allowance account increases

• Accounts receivable decreases, and the allowance account decreases

• Accounts receivable decreases, and the allowance account increases

• Accounts receivable increases, and the allowance account increases

If an account is collected after it has been written off, what happens to accounts receivable?

• The allowance account is debited

• Only the control account is credited

• Both income statement and financial position accounts are affected

• Accounts receivable has both a debit and credit

When an account is written off using the allowance method, what happens to the cash realizable value of total accounts receivable?

• It increases

• It decreases

• It stays the same

• The allowance account increases

What adjusting entry is made under the allowance method for estimated uncollectible accounts?

• Debit accounts receivable, credit Allowance for Doubtful Accounts

• Debit Bad Debt Expense, credit Allowance for Doubtful Accounts

• Debit Allowance for Doubtful Accounts, credit accounts receivable

• Debit Loss on Credit Sales, credit accounts receivable

Under the direct write-off method of accounting for uncollectible accounts, which action occurs during write-off?

• The allowance account increases for the actual bad debt amount

• A specific account receivable is decreased by the actual bad debt amount

• Statement of financial position relationships are emphasized

• Bad debt expense is always recorded when the revenue is recognized