major review 2 ch5

which one of these is NOT a contra-revenue account

• Trade discount

• Sales returns

• Sales Allowance

• Sales Discount

XYZ Consulting offers a 15% trade discount when providing services of $6,000 or more to its customers.

The company provides services of $8,000 (before applying the trade discount) on account.

How should XYZ Consulting record this transaction in the general journal?

• Accounts Receivable - $8,000 (Debit)
  Service Revenue - $8,000 (Credit)

• Accounts Receivable - $6,800 (Debit)
  Service Revenue - $6,800 (Credit)

• Accounts Receivable - $6,500 (Debit)
  Service Revenue - $6,500 (Credit)

  
  

• Accounts Receivable - $7,200 (Debit)
  Service Revenue - $7,200 (Credit)

A customer purchases merchandise from ABC Retail for $1,200 on account. Later, they notice a minor defect and negotiate a $200 sales allowance instead of returning the item.

• Debit Sales Allowances $200, Credit Accounts Receivable $200

•  Debit Accounts Receivable $1,000, Credit Sales Allowances $200

• Debit Sales Allowances $1,200, Credit Accounts Receivable $1,200

• Debit Cash $200, Credit Sales Revenue $200

At December 31, Gill Company reported Accounts Receivable of $262,000 and an Allowance for Uncollectible Accounts of $850 (credit) before adjustment. An analysis suggests that the Allowance for Uncollectible Accounts should be 1% of Accounts Receivable.

• $3,280

• $2,620

• $1,770

• $850

 The following information pertains to Summit Corp. at the end of December:

Accounts Receivable = $12,500

$8,000 not yet due (6% estimated uncollectible)

$3,000 up to 30 days past due (18% estimated uncollectible)

$1,500 greater than 30 days past due (42% estimated uncollectible)

Allowance for Uncollectible Accounts (before adjustment) = $500 credit

What is the appropriate amount of Bad Debt Expense that Summit Corp. should record?

• A) $1,150

• B) $1,240

• C) $1,650

• D) $2,150

At the beginning of the year, Coastal Retail Inc. had an Allowance for Uncollectible Accounts balance of $18,000. By the end of the year, the company determined that actual bad debts totaled $22,500 and needed to be written off.

What is the correct journal entry to record the write-off of these uncollectible accounts?

• Debit: Bad Debt Expense $22,500
  Credit: Allowance for Uncollectible Accounts $22,500

• 
  Debit: Allowance for Uncollectible Accounts $22,500
  Credit: Accounts Receivable $22,500

• Debit: Allowance for Uncollectible Accounts $4,500
  Credit: Accounts Receivable $4,500

• Debit: Allowance for Uncollectible Accounts $18,000
  Credit: Accounts Receivable $18,000

At the beginning of the year, Coastal Retail Inc. had an Allowance for Uncollectible Accounts balance of $18,000. By the end of the year, the company determined that actual bad debts totaled $22,500 and needed to be written off.

What is the balance of the Allowance for Uncollectible Accounts at the end of the year after the write-off?

• A) $4,500 credit

• B) $0

• C) $18,000 credit

• D) $4,500 debit

On August 15, 2025, Summit Electronics determines that a customer’s account balance of $6,500 is uncollectible and must be written off.

What is the correct journal entry to record this write-off?

• Debit: Bad Debt Expense $6,500
  Credit: Accounts Receivable $6,500

• Debit: Allowance for Uncollectible Accounts $6,500
  Credit: Accounts Receivable $6,500

• Debit: Accounts Receivable $6,500
  Credit: Allowance for Uncollectible Accounts $6,500

• No journal entry is required

On August 15, 2025, Summit Electronics determines that a customer’s account balance of $6,500 is uncollectible and must be written off.

On October 10, 2025, the customer whose account was written off unexpectedly pays the full amount of $6,500.

What is the correct set of journal entries to record the recovery and cash collection?

• Debit: Accounts Receivable $6,500
  Credit: Allowance for Uncollectible Accounts $6,500
  Debit: Cash $6,500
  Credit: Accounts Receivable $6,500

• Debit: Cash $6,500
  Credit: Bad Debt Expense $6,500

• Debit: Allowance for Uncollectible Accounts $6,500
  Credit: Bad Debt Expense $6,500
  Debit: Cash $6,500
  Credit: Accounts Receivable $6,500

• No journal entry is required

On October 1, 2025, Summit Consulting provides consulting services to a client for $50,000. Instead of paying immediately, the client signs a one-year, 9% note, agreeing to pay the full principal and interest on October 1, 2026.

What is the correct journal entry to record the acceptance of the note on October 1, 2025?

• Debit: Accounts Receivable $50,000
  Credit: Service Revenue $50,000

• Debit: Notes Receivable $50,000
  Credit: Service Revenue $50,000

• Debit: Cash $50,000
  Credit: Notes Receivable $50,000

• a journal entry is only required for the adjusting entry and cash collection.