Receivable and Allowance

Receivable and Allowance

University

10 Qs

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Receivable and Allowance

Receivable and Allowance

Assessment

Quiz

Other

University

Medium

Created by

Hoa Nguyen

Used 1+ times

FREE Resource

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

5 mins • 1 pt

In the statement of financial position at 31 December 20X5, Yanlin had net receivables of $12,000. During 20X6 Yanlin made sales on credit of $125,000 and received cash from credit customers amounting to $115,500. At 31 December 20X6, Yanlin decided to write off debts of $7,100 and increase the specific allowance for receivables by $950 to $2,100. What was the net receivables figure reported in Yanlin’s statement of financial position at 31 December 20X6?
12300
13450
14400
15550

2.

MULTIPLE CHOICE QUESTION

5 mins • 1 pt

Newell Co’s receivables account shows a balance at the end of the year of $58,200 before making the following adjustments: (i) Newell Co decides to write off debts amounting to $8,900 as it believes they are irrecoverable. (ii) Newell Co also decides to make specific allowance for Carroll’s debt of $1,350, Jay’s debt of $750 and Mai’s debt of $1,416. Newell Co’s allowance for receivables at the previous year end was $5,650. What is the charge to the statement of profit or loss in respect of the above information?
6766
11034
6829
10971

3.

MULTIPLE CHOICE QUESTION

5 mins • 1 pt

In the year ended 30 September 20X8, Gulzar had sales of $7,000,000. The year-end receivables amounted to 5% of annual sales. At the year end, Gulzar’s specific allowance for receivables equated to 4% of receivables. Gulzar also identified that this amount was 20% higher than at the previous year end. During the year irrecoverable debts amounting to $3,200 were written off and debts amounting to $450 and previously written off were recovered. What was Gulzar’s irrecoverable debt expense for the year?
5083
5550
5583
16750

4.

MULTIPLE CHOICE QUESTION

5 mins • 1 pt

The sales revenue of J Co was $2 million and its receivables were 5% of sales. J Co wishes to have a specific allowance for receivables of $4,000, which would make the allowance one third higher than the current allowance. How will the profit for the period be affected by the change in allowance?
Profit will be reduced by $1,000
Profit will be increased by $1,000
Profit will be reduced by $1,333
Profit will be increased by $1,333

5.

MULTIPLE CHOICE QUESTION

5 mins • 1 pt

An increase in the allowance for receivables results in which of the following?
An increase in net current assets
A decrease in net current assets
An increase in sales
A decrease in drawings

6.

MULTIPLE CHOICE QUESTION

5 mins • 1 pt

Which of the following best explains the purpose of an aged receivables’ analysis?
To ensure that credit is not extended to unapproved customers
To ensure that credit customers regularly purchase goods from the business
To keep track of outstanding debts and identify overdue amounts to follow up
To keep track of customer addresses

7.

MULTIPLE CHOICE QUESTION

5 mins • 1 pt

G Co has been notified that a customer has been declared bankrupt. G Co had previously made allowance for this receivable. Which of the following is the correct double entry?
Dr Allowance for receivables Cr Receivables
Dr Receivables Cr Irrecoverable debts account
Dr Irrecoverable debts account Cr Receivables
Dr Receivables Cr Allowance for receivables

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