Question 1

To write off an uncollectible account receivable when the allowance method of accounting for uncollectible accounts is used,a company should debit ________ and credit accounts receivable.

Accepted Answer

The answer of To write off an uncollectible account receivable...

Question 2

On May 31,Cray has $375,800 of accounts receivable.Cray uses the allowance method of accounting for bad debts and has an existing credit balance in the allowance for doubtful accounts of $14,250.
1.Prepare journal entries to record the following selected May transactions.The company uses the perpetual inventory system.
2.Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its May 31 balance sheet.
a.Sold $415,200 of merchandise (that cost $249,000)to customers on credit.
b.Received $465,800 cash in payment of accounts receivable.
c.Wrote off $15,800 of uncollectible accounts receivable.
d.In adjusting the accounts on May 31,its fiscal year-end,the company estimated that 4.0% of accounts receivable will be uncollectible.

Accepted Answer

The answer of On May 31,Cray has $375,800 of accounts...

Question 3

The ________ methods of computing uncollectible accounts use balance sheet relations to estimate bad debts-mainly the relation between accounts receivable and the allowance amount.

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The answer of The ________ methods of computing uncollectible accounts...

Question 4

________ is the charge for using borrowed money until its due date.

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The answer of ________ is the charge for using borrowed...

Question 5

When the maker of a note is unable or refuses to pay at maturity,the note is said to be ________.

Accepted Answer

The answer of When the maker of a note is...

Question 6

The ________ method of computing uncollectible accounts uses income statement relationships to estimate bad debts and is based on the idea that a given percent of a company's credit sales for a period are uncollectible.

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The answer of The ________ method of computing uncollectible accounts...

Question 7

The ________ of a note is the day the principle plus interest of a note must be repaid.

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The answer of The ________ of a note is the...

Question 8

The accounts receivable turnover is calculated by dividing ________ by ________.

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The answer of The accounts receivable turnover is calculated by...

Question 9

White Company allows customers to make purchases on credit.The terms of all credit sales are 2/10,n/30,and all sales are recorded at the gross price.Other customers can use a bank credit card where the bank deducts a 4% service charge for credit card sales and credits the bank account of White immediately when credit card receipts are deposited.White uses the perpetual inventory method.Prepare journal entries to record the following selected transactions and events.

Accepted Answer

The answer of White Company allows customers to make purchases...

Question 10

At December 31,Yarrow Company reports the following results for its calendar year from the adjusted trial balance.
 $$\begin{array} { | l | r | } 
\hline \text { Credit sales } & \$ 2,300,000 \
\hline \text { Aash sales } & 1,050,000 \
\hline \text { Accounts Receivable } & 295,000 \
\hline \text { Allowance for doubtful accounts (credit balance) } & 750 \
\hline
\end{array}$$ a.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 1.1% of credit sales.
b.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be .8% of total sales.
c.Prepare the adjusting entry to record Bad Debts Expense assuming uncollectibles are estimated to be 7.0% of year-end accounts receivable.

Accepted Answer

The answer of At December 31,Yarrow Company reports the following...

Question 11

A ________ is a signed agreement to pay a specified amount of money either on demand or at a definite future date.

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The answer of A ________ is a signed agreement to...

Question 12

The person to whom a note is payable is known as the ________.

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The answer of The person to whom a note is...

Question 13

The________ method of accounting for bad debts records the loss from an uncollectible account receivable at the time it is determined to be uncollectible (and not before).

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The answer of The________ method of accounting for bad debts...

Question 14

A supplementary record created to maintain a separate account for each customer is called the ________.

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The answer of A supplementary record created to maintain a...

Question 15

Converting receivables to cash before they are due is usually done by either (1)________ or (2)________.

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The answer of Converting receivables to cash before they are...

Question 16

________ are amounts owed by customers from credit sales where payment is required in periodic amounts over an extended time period.

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The answer of ________ are amounts owed by customers from...

Question 17

________ refers to the expected proceeds from converting an asset into cash.

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The answer of ________ refers to the expected proceeds from...

Question 18

The ________ method uses both past and current receivables to estimate the allowance amount,and assumes that the longer an amount is past due,the more likely it is to be uncollectible.

Accepted Answer

The answer of The ________ method uses both past and...

Quiz 7: Reporting and Analyzing Receivables