Exam 4 – Chapter 8 & 9 Review

If a company did not extend credit to customers:

• gross revenue would increase.

• costs would increase but so would sales revenue.

• costs would decrease but so would sales revenue.

• gross profit would increase

Tags

CCSS.6.EE.B.6

The adjusting entry to record the estimated bad debts in the period credit sales occur includes a debit to an:

• asset account and a credit to a liability account.

• expense account and a credit to an asset account.

• expense account and a credit to a revenue account.

• expense account and a credit to a contra-asset account.

Kata Company uses the allowance method. On May 1, Kata wrote off a $22,000 customer account balance when it becomes clear that the particular customer will never pay. The journal entry to record the write-off on May 1 would include which of the following?

• Debit to Bad Debt Expense and credit to Allowance for Doubtful Accounts.

• Debit to Accounts Receivable and credit to Allowance for Doubtful Accounts.

• Debit to Allowance for Doubtful Accounts and credit to Bad Debt Expense.

• Debit to Allowance for Doubtful Accounts and credit to Accounts Receivable.

Creek Co. uses the percentage of credit sales method in determining its bad debt expense. The following information comes from the accounting records of Creek Co.: Cash sales $ 300,000 Credit sales 1,200,000 Total sales 1,500,000 Credit balance in the Allowance for Doubtful Accounts 7,500 Bad debt loss rate 3% What is the estimate of bad debt expense?

• $36,000

• $37,500

• $43,500

• $45,000

• $4,500

• $5,000

• $7,000

• $7,500

On August 1, Jackson Radiology signed a one-year note receivable of $60,000 with interest at of 15% payable every six months. Jackson properly accrued interest on the note on December 31. What journal entry would Jackson make on the following February 1 to record the interest payment received on that date?

• Debit Cash and credit Interest Revenue for $4,500.

• Debit Cash and credit Interest Revenue for $750.

• $450,000

• $453,000

• $457,500

• $460,500

• $45,000

• $50,000

• $90,000

• $100,000

Tags

CCSS.7.NS.A.1D

• $200,000 loss on sale

• $80,000 gain on sale

• $80,000 loss on sale

• $50,000 loss on sale

• $2,475

• $8,600

• $3,300

• $9,425