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WorksheetsChapter 7 - Accounting for Receivables
Total questions: 30
Worksheet time: 45mins
Accounts Receivable refer to the amounts owed by customers due to credit sales transactions.
True
False
Accounts Receivable is known as a control account to many subsidiaries.
True
False
The uncollectible amount from Accounts Receivable is known as bad debts.
True
False
The death of a debtor is one of the reasons for his/her debts to be written-off.
True
False
State a proper credit term if the debtors will be given 2% discounts if making payment in 10 days after the transaction date and the credit period is 45 days.
0.02/10 ; no/45
2/10 ; n/eom
2/10 ; n/45
2%/10 ; n/45
Accounts Receivable is a current asset. Under which classification is bad debt?
A contra account to Accounts Receivable
Operational Expenses
Other Expenses
A contra account to Allowance for Doubtful Accounts
There are two methods in handling Accounts Receivable, Bad Debts and Allowance for Doubtful Accounts. What are those?.
Written-off Method & Allowance Method
Allowance for Doubtful Method & Bad Debt Method
% on Accounts Receivable Method and % on Net Credit Sales Method
Direct Write-off Method and Allowance Method
Allowance method does not comply to Expense Recognition Concept?
True
False
In direct write-off method, what is a general journal entry to record the uncollectible debts as Bad Debts Expense?
dr Accounts Receivable
cr Bad Debt Expense
dr Bad Debt Expense
cr Accounts Receivable
dr Bad Debt Expense
cr Allowance for Doubtful Accounts
dr Allowance for Doubtful Accounts
cr Accounts Receivable
Company make provision for doubtful debts in direct write-off method?
True
False
Bad Debt Expense will be reported in Statement of Profit or Loss under which category?
Cost of Goods Sold
Net Sales
Other Expenses
Operational Expenses
Company make provision for doubtful debts in allowance method based on 2 basis. Which are they?
% on Allowance for Doubtful Accounts and % on Accounts Receivable
% on Net Credit Sales and % on Accounts Receivable
% on Net Sales and % on Accounts Receivable
% on Assets and % on Liabilities
% of provision X ending balance of Accounts Receivable = ?
beginning balance of Bad Debt Expense
beginning balance of Allowance for Doubtful Accounts
Bad Debt Expense
ending balance of Allowance for Doubtful Accounts
% of provision X net credit sales = ?
beginning balance of Bad Debt Expense
beginning balance of Allowance for Doubtful Accounts
Bad Debt Expense
ending balance of Allowance for Doubtful Accounts
Bad Debts Recovery is the account to be credited when the uncollectible amount that has been confirmed as Bad Debts suddenly can be collected.
True
False
Allowance method is a method of accounting for bad debts that involves making provision or estimation of the uncollectible debts at the end of the accounting period.
True
False
Accounts Receivable is a current asset. Under which classification is Allowance for Doubtful Accounts?
A contra account to Accounts Receivable
Operational Expenses
Other Expenses
A contra account to Sales
How do sales discounts and sales returns affect Accounts Receivable? Accounts Receivable will be _____?
no effect
decreased
increased
negative
Accounts Receivable = RM10,000
Allowance for Doubtful Accounts = RM2,000
How much is the face value of the Accounts Receivable?
RM8,000
RM10,000
RM12,000
RM2,000
Which is the correct general journal entry to record the cash collected from the debtors?
dr Accounts Receivable
cr Cash
dr Cash
cr Accounts Receivable
dr Accounts Receivable
cr Sales
dr Sales
cr Accounts Receivable
Which is the correct general journal entry to record the uncollectible debts under allowance method.
dr Accounts Receivable
cr Allowance for Doubtful Accounts
dr Allowance for Doubtful Accounts
cr Accounts Receivable
dr Bad Debts Expense
cr Accounts Receivable
dr Accounts Receivable
cr Bad Debts Expense
Accounts Receivable = RM10,000
Allowance for Doubtful Accounts = RM2,000
How much is the net realizable value of the Accounts Receivable?
RM8,000
RM10,000
RM12,000
RM2,000
In allowance method, Bad Debt Expense is debited when...
a sale is made.
an account becomes bad and is written off.
management estimates the amount of uncollectibles.
a customer's account becomes past-due.
When an account becomes uncollectible and must be written off,
Bad Debt Expense should be credited.
Allowance for Doubtful Debts should be credited.
Sales Revenue should be debited.
Accounts Receivable should be credited.
To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a
debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.
debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts.
debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.
debit to Loss on Credit Sales Revenue and a credit to Accounts Receivable.
Two bases for estimating uncollectible accounts under allowance method are:
percentage of current assets and percentage of sales.
percentage of assets and percentage of sales.
percentage of receivables and percentage of net credit sales.
percentage of receivables and percentage of total revenue.
On which Financial Statement would you expect to find Allowance for Doubtful Accounts?
Statement of Financial Position
Statement of Comprehensive Income
Statement of Owner's Equity
Statement of Profit or Loss
The Accounts Receivable that cannot be collected because of their bankruptcy or another reason are termed as:
collectible accounts
bad customers
doubtful accounts
uncollectible accounts
What effect does bad debts have on Accounts Receivable?
it increases Accounts Receivable
it decreases Accounts Receivable
it has no effect on Accounts Receivable
nothing happen to Accounts Receivable
The journal entry for recording Accounts Receivable is:
dr. Cash
cr. Accounts Receivable
dr. Accounts Receivable
cr. Sales
dr. Accounts Receivable
cr. Cash
dr. Sales
cr. Accounts Receivable
