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Exam 8: Receivables

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Question 71

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When does an account become uncollectible?

A) when accounts receivable is converted into notes receivable
B) when a discount is available on notes receivable
C) there is no general rule for when an account becomes uncollectible
D) at the end of the fiscal year

E) C) and D)
F) A) and C)

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Question 72

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Watson Company issued a 60-day,8% note for $18,000,dated April 5,to Laker Company on account.Assume a 360-day year when calculating interest.

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Question 73

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For each of the following notes receivable held by Winter Company,determine the interest revenue to be reported on the income statements.Round answers to nearest whole dollar.

The accounts receivable turnover measures

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables,a major difference is that the direct write-off method

The operating expense recorded from uncollectible receivables can be called all of the following except​

Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment) .The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900.Which of the following adjusting entries would be made to record the Bad Debt Expense for the year?

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

​The following are the current assets of Barnes Co.as of December 31: ​ ​ Prepare the current assets section of the balance sheet.

Determine the due date and amount of interest due at maturity on the following notes:

Mr.Potts issued a 90-day,7% note for $200,000,dated February 3 to Valley Co.on account.(Assume a 360-day year when calculating interest.) (a)Determine the due date of the note. (b)Determine the interest. (c)Determine the maturity value of the note. (d)Journalize the entry to record the receipt of the note from Potts on Feb.3. (e)Journalize the entry to record the receipt of payment of the note at maturity by Valley Co.

The receivable that is usually evidenced by a formal,written instrument of credit is a(n)

The amount for which a promissory note is written is called the

Interest on a note can be calculated without knowledge of the

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

​GAAP requires companies with a large amount of receivables to use the allowance method.

At the end of the current year,Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000.An analysis of receivables estimates uncollectible receivables as $25,000. ​ Determine (a)the amount of the adjusting entry for bad debt expense; (b)the adjusted balances of Accounts Receivable,Allowance for Doubtful Accounts,and Bad Debt Expense; and (c)the net realizable value of accounts receivable.

When an account receivable that has been written off is subsequently collected,the account receivable must first be reinstated before recording the receipt of payment.

The number of days' sales in receivables

A 60-day,9% note for $10,000,dated May 1,is received from a customer on account.The maturity value of the note is