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Exam 9: Receivables

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Question 1

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Match each description to the appropriate term (a-i) . -All money claims against other entities

A) Accounts receivable turnover
B) Net realizable value
C) Accounts receivable
D) Aging the receivables
E) Receivables
F) Direct write-off method
G) Allowance for doubtful accounts
H) Bad debt expense
I) Notes receivable

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Question 2

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Discuss the two methods for recording bad debt expense.What type of company uses each method?

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The first method is the direct write-off...

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Question 3

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

Paper Company receives a $6,000,three-month,6% promissory note from Dame Company in settlement of an open accounts receivable.What entry will Paper Company make upon receiving the note?

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables.​Feb.20 Received $1,000 from Andrew Warren and wrote off the remainder owed of $4,000 as uncollectible.May 10 Reinstated the account of Andrew Warren and received $4,000 cash in full payment.

Trade receivables occur when two companies trade or exchange notes receivable.

The direct write-off method of accounting for uncollectible accounts

You have just received notice that a customer of yours with an account receivable balance of $100 has gone bankrupt and will not make any future payments.Assuming you use the allowance method,the entry you make is to

If a promissory note is dishonored,the payee should still record interest revenue.

Match each description to the appropriate term (a-i) . -The process of analyzing the accounts receivable and classifying them according to various age groupings,with the due date being the base point for determining age

Jefferson uses the percent of sales method of estimating uncollectible expenses.Based on past history,2% of credit sales are expected to be uncollectible.Sales for the current year are $5,550,000.Which of the following is correct?

Journalize the following transactions in the accounts of Simmons Company:​Mar. 1 Received a $60,000,60-day,6% note dated March 1 from Bynum Co.on account.18 Received a $25,000,60-day,9% note dated March 18 from Solo Co.on account.Apr.30 The note dated March 1 from Bynum Co.is dishonored,and the customer's account is charged for the note,including interest.May 17 The note dated March 18 from Solo Co.is dishonored,and the customer's account is charged for the note,including interest.July 29 Cash is received for the amount due on the dishonored note dated March 1 plus interest for 90 days at 8% on the total amount debited to Bynum Co.on April 30.Aug.23 Wrote off against the allowance account the amount charged to Solo Co.on May 17 for the dishonored note dated March 18.

At the beginning of the year,the balance in Allowance for Doubtful Accounts is a credit of $760.During the year,previously written off accounts of $120 are reinstated and accounts totaling $740 are written off as uncollectible.The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be

For each of the following notes receivables held by Christensen Company,determine the interest revenue to be reported on the income statements for the year ended December 31.Round answers to the nearest whole dollar.

The accounts receivable turnover measures

The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for bad debt expense when using the

The following journal entries would be used in one of the two methods of accounting for uncollectible receivables.Identify each. (a) (b)

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

Match each description to the appropriate term (a-d) . Each term may be used more than once. -This method focuses on the balance sheet.

Two methods of accounting for uncollectible accounts are the