ACC - CH8 - Files

In the direct-write off method, what does the journal entry look like?

debit bad debt expense credit accounts receivable

What is the journal entry when a note is paid at maturity?

debit cash credit notes receivable

How are notes to settle accounts receivable journalized?

debit notes receivable credit accounts receivable

All receivables that are expected to be realized in cash within a year are reported in the ___________ ________ section of the balance sheet.

current assets

What are the two methods of accounting for uncollectible recievables?

direct-write off method allowance method

The two methods of accounting for uncollectible receivables are the allowance method and the

Direct write off-method

If collection of an other receivable is expected beyond one year, it is classified as a(n)

Investment under noncurrent asset

A note receivable due in 18 months is listed on the balance sheet under the caption

Investments

The term "receivables" includes all

Money claims against other entities

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

Note receivable

What is a note receivable?

a customer written promise to pay an amount

In the allowance method, an ______________ ____________ is made for uncollectible accounts. The allowance account is a _______ ________ account that normally has a credit balance after the adjusting entry has been posted.

adjusting entry, contra asset

The operating expense recorded from uncollectible receivables is called _____ ______ ___________.

bad debt expense

The __________ ____________- is the amount that is due at the maturity or due date of a note.

maturity value

Receivables include all ___________ __________ against other entities. Receivables are normally classified as accounts receivable, notes receivable, or other receivables.

money, claims

_____ __________ value is the estimated selling price of an item of inventory minus direct costs (sales and commissions).

net realizable

Which statement is not true?

All receivable that are expected to be realized in cash beyond 265 days are reported in the non-current assets section

Other receivables includes all of the following except

Notes receivable

Which of the following receivables would not be classified as an "other receivable"?

Notes receivable

When does an account become uncollectible?

There is no general rule for when an account becomes uncollectible

Notes or accounts receivables that result from sales transactions are often called

Trade receivable