Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment), and an analysis of receivables estimates the amount of uncollectible accounts to be $16,000. Based on this estimate, which of the following adjusting entries should be made?

debit Bad Debt Expense for $15,200; credit Allowance for Doubtful Accounts for $15,200

debit Bad Debt Expense for $800; credit Allowance for Doubtful Accounts for $800

debit Allowance for Doubtful Accounts for $800; credit Bad Debt Expense for $800

debit Bad Debt Expense for $16,800; credit Allowance for Doubtful Accounts for $16,800

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment), and bad debt expense is estimated at 4% of credit sales. If credit sales are $800,000, the amount of the adjusting entry for uncollectible accounts is

cannot determine without more information

A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is

debit Accounts Receivable for $6,120; credit Notes Receivable for $6,000; credit Interest Revenue for $120

debit Cash for $6,120; credit Notes Receivable for $6,120

debit Notes Receivable for $6,120; credit Accounts Receivable for $6,000; credit Interest Receivable for $120

debit Notes Receivable for $6,060; credit Accounts Receivable for $6,060

Allowance for Doubtful Accounts has a debit balance of $1,100 at the end of the year (before adjustment), and an analysis of the receivables indicates uncollectible accounts of $12,900. Which of the following entries journalizes the proper adjustment for bad debt expense?

debit Bad Debt Expense for $14,000; credit Allowance for Doubtful Accounts for $14,000

debit Allowance for Doubtful Accounts for $14,000; credit Bad Debt Expense for $14,000

debit Allowance for Doubtful Accounts for $11,800; credit Bad Debt Expense for $11,800

debit Bad Debt Expense for $11,800; credit Allowance for Doubtful Accounts for $11,800

Harper Company lends Hewell Company $40,000 on March 1, accepting a 4-month, 6% interest note. Harper Company prepares financial statements on March 31. What related adjusting entry should be made before the financial statements can be prepared?

Interest Receivable 200; Interest Revenue 200

Interest Receivable 800; Interest Revenue 800

Note Receivable 40,000; Cash 40,000

A company uses the allowance method to account for uncollectible accounts receivable. When the firm writes off a specific customer's account receivable

there is no effect on total current assets or total expenses

total current assets are reduced

total expenses for the period are increased

the net realizable value of accounts receivable increases

The collection of an account that was previously written off under the allowance method of accounting for uncollectible receivables

does not affect net income in the period it is collected

will increase net income in the period it is collected

will decrease net income in the period it is collected

requires a correcting entry for the period in which the account was written off

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment), and an analysis of the receivables indicates uncollectible accounts of $13,000. Which of the following entries journalizes the proper adjustment for bad debt expense?

debit Bad Debt Expense for $13,600; credit Allowance for Doubtful Accounts for $13,600

debit Bad Debt Expense for $600; credit Allowance for Doubtful Accounts for $600

debit Bad Debt Expense for $12,400; credit Allowance for Doubtful Accounts for $12,400

debit Allowance for Doubtful Accounts for $600; credit Bad Debt Expense for $600

An aging of a company's accounts receivable indicates an estimate of uncollectible accounts of $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to journalize the bad debt expense for the period will require a

debit to Bad Debt Expense for $7,200

debit to Bad Debt Expense for $8,600

debit to Bad Debt Expense for $7,900

credit to Allowance for Doubtful Accounts for $700

Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment). The company prepares an analysis of receivables and estimates the amount of uncollectible accounts to be $31,900. Which of the following adjusting entries is needed to journalize the bad debt expense for the year?

debit Bad Debt Expense for $34,200; credit Allowance for Doubtful Accounts for $34,200

debit Allowance for Doubtful Accounts for $34,200; credit Bad Debt Expense for $34,200

debit Allowance for Doubtful Accounts for $29,600; credit Bad Debt Expense for $29,600

debit Bad Debt Expense for $29,600; credit Allowance for Doubtful Accounts for $29,600

When a company uses the allowance method of accounting for uncollectible receivables, which entry would not be found in the journal?

Bad Debt Expense 500 Accounts Receivable—Bob Smith 500

Bad Debt Expense 500 Allowance for Doubtful Accounts 500

Cash 300 Allowance for Doubtful Accounts 200 Accounts Receivable—Bob Smith 500

Cash 500 Accounts Receivable—Bob Smith 500

The Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be which of the following?

c. debit Bad Debt Expense and credit Accounts Receivable

a. debit Sales and credit Accounts Receivable

b. debit Allowance for Doubtful Accounts and credit Accounts Receivable

d. debit Bad Debt Expense and credit Allowance for Doubtful Accounts

On which financial statement and at what amount are accounts receivable reported?

D) Balance sheet at the net realizable value

A) Balance sheet at the amount owed by customers

B)Income statement at the net uncollectible amount

C) Income statement at the amount written off

Under the allowance method of accounting for credit losses, the entry to write off a specific account:

D) Does not affect net income or total assets

B) Debits Bad Debts Expense and credits Allowance for Doubtful Accounts

C) Is the same as the entry to write off a specific account under the direct write-off method

After writing off a customer's account, a company using the allowance method subsequently collected the account in full. It should:

A) Debit Cash and credit Accounts Receivable

B) Debit Cash and credit Miscellaneous Income

C) Debit Accounts Receivable and credit Allowance for Doubtful Accounts

A $150 petty cash fund has cash of $28 and receipts of $110. The journal entry to replenish the account would include a

C)debit to Cash Over and Short for $12.

A)credit to Petty Cash for $82.

The debit balance in Cash Short and Over at the end of an accounting period is reported as

A)an expense on the income statement

B)income on the income statement

C)an asset on the balance sheet

D)a liability on the balance sheet

A $100 petty cash fund contains $89 in petty cash receipts, and $7.50 in currency and coins. The journal entry to record the replenishment of the fund would include a

C)debit to Cash Short and Over for $3.50

A)credit to Petty Cash for $96.50.

D)credit to Cash Short and Over for $3.50

The bank reconciliation

B)is part of the internal control system

A)should be prepared by an employee who records cash transactions

C)is for information purposes only

D)is sent to the bank for verification

Receipts from cash sales of $7,500 were recorded incorrectly in the cash receipts journal as $5,700. This item would be included on the bank reconciliation as a(n)

D)addition to the balance per company's records

A)deduction from the balance per company's records

B)addition to the balance per bank statement

C)deduction from the balance per bank statement

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

C)debit Cash; credit Notes Receivable

A)debit Notes Receivable; credit Cash

B)debit Cash; credit Miscellaneous Income

D)debit Accounts Receivable; credit Cash

A $135 petty cash fund has cash of $44 and receipts of $93. The journal entry to replenish the account would include a

C)credit to Cash Over and Short for $2.

A)credit to Petty Cash for $93.

Entries are made to the Petty Cash account when

A)making payments out of the fund.

B)recording shortages in the fund.

C)replenishing the petty cash fund.

Principles of Accounting I Module 8 Quiz

Authored by JOSH Schrock

Business

University

Principles of Accounting I Module 8 Quiz

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Under which of the following methods of accounting for uncollectible receivables are estimated bad debts added to the existing allowance balance?

direct write-off method

aging of receivables method

percent of sales method

allowance method

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The balance in Allowance for Doubtful Accounts at the end of the year is the total of all accounts written off since the beginning of the year.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Small companies can use either the direct write-off method or the allowance method.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

Uncollectible Accounts Expense

Allowance for Doubtful Accounts

Accounts Receivable

Interest Expense

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

displaced

disallowed

dishonored

discounted

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In computing the maturity date of a note, the date the note is issued is included, but the due date is omitted.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The party promising to pay a promissory note is the

payee

banker

consigner

maker

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Principles of Accounting I Module 8 Quiz

Under which of the following methods of accounting for uncollectible receivables are estimated bad debts added to the existing allowance balance?

The balance in Allowance for Doubtful Accounts at the end of the year is the total of all accounts written off since the beginning of the year.

Small companies can use either the direct write-off method or the allowance method.

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

In computing the maturity date of a note, the date the note is issued is included, but the due date is omitted.

The party promising to pay a promissory note is the

Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment), and an analysis of receivables estimates the amount of uncollectible accounts to be $16,000. Based on this estimate, which of the following adjusting entries should be made?

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000. What is the net realizable value of the accounts receivable?

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