Notes and accounts receivable that result from sales transactions are often called trade receivables.
A. True
B. False
Answer: A
Financial Accounting
- One of the following statements about promissory notes is incorrect. The incorrect statement is
- In a promissory note, the party making the promise to pay is called the maker.
- Sanders Company has a debit balance of $7,000 in its Allowance for Doubtful Accounts before any adjustments are made. Based on a review of its accounts receivable at the end of the year, Sanders estimates that $70,000 of its receivables are uncollectible. The amount of bad debts expense which should be reported for the year is
- The balance of the Allowance for Doubtful Accounts account at January1 of the current year was $6,800. During the year, accounts receivable in the amount of $9,000 were written off. Estimated uncollectible accounts expense using the percentage-of-sales basis for the year amounts to $7,200. The balance of the Allowance for Doubtful Accounts account to be reported on the balance sheet at year-end is
- The percentage-of-receivables basis of estimating uncollectibles
- Writing off an uncollectible account under the allowance method requires a debit to
- Allowance for Doubtful Accounts is
- Net sales for the month are $800,000, and bad debts are expected to be 1.5% of net sales. The company uses the percentage-of-sales basis. If the Allowance for Doubtful Accounts has a credit balance of $15,000 before adjustment, what is the balance after adjustment?
- Hughes Company has a credit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. Based on the review and aging of its accounts receivable at the end of the year, Hughes estimates that $60,000 of its receivables are uncollectible. The amount of bad debts expense which should be reported for the year is
- Voight Company's account balances at December 31 for Accounts Receivable and Allowance for Doubtful Accounts were $1,400,000 and $70,000 (credit balance), respectively. An aging of accounts receivable indicated that $128,000 are expected to become uncollectible. The amount of the adjusting entry for bad debts at December 31 is
- Under the percentage-of-receivables basis, the amount of bad debt expense is the difference between the required balance and the existing balance in the allowance account.
- If a company fails to record estimated bad debts expense,
- Which of the following practices by a credit card company results in lower interest charges to the cardholder?
- Which of the following would require a compound journal entry?
- Receivables are frequently classified as
- Interest is usually associated with
- The accounts receivable turnover ratio is computed by dividing
- Accounts and short-term notes receivable are reported in the current assets section of the balance sheet at
- The average collection period is computed by dividing
- The entry to record the dishonor of a note receivable assuming the payee expects eventual collection includes a debit to
- Ginter Co. holds Kolar Inc.'s $10,000, 120-day, 9% note. The entry made by Ginter Co. when the note is collected, assuming no interest has been previously accrued, is
- When a note receivable is dishonored,
- Short-term notes receivable are reported at
- Companies report short-term notes receivable at their cash (net) realizable value.
- When a note is accepted to settle an open account, Note Receivable is debited for the note's