Accounting

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An Allowance for Uncollectible Accounts balance in the Trial balance Credit column of a work sheet means previous fiscal period estimates have not yet been identified as Uncollectible.

True

At the end of a fiscal period, the account credited to show the estimated amount of uncollectible accounts is Allowance for Uncollectible Accounts.

True

At the end of a fiscal period, the account debited to show the estimated amount of uncollectible accounts is Allowance for Uncollectible Accounts.

True

Balance of accounts receivable less allowance for uncollectible accounts is the equation for calculating book value of accounts receivable.

True

Canceling the balance of a customer account because the customer does not pay is called writing off an account.

True

Crediting the estimated value of uncollectible accounts to a contra account is called the allowance method of recording losses from uncollectible accounts.

True

Risk of loss occurs when a business sells on account.

True

The difference between an asset's account balance and its related contra account balance is called its book value.

True

The loss from an uncollectible account is a regular expense of doing business.

True

When a customer account is written off under the allowance method, book value of accounts receivable decreases.

False

When an account is written off, the account balance is transferred to Allowance for Uncollectible accounts.

False

Allowances for Uncollectible Accounts is a contra account to its related asset account, Accounts Receivable.

True

Using the percentage of total sales on account to estimate uncollectible accounts expense assumes that a portion of every sale on account dollar will become uncollectible.

True

When a previously written-off account is collected, Accounts receivable is both debited and credited for the amount collected.

True

When an adjusting entry for uncollectible accounts expense is recorded, Allowance for Uncollectible Accounts is credited.

True

When the account Allowance for Uncollectible accounts is used, a customer past-due account is written off as uncollectible by debiting Allowance for Uncollectible Accounts by crediting Accounts REceivable and the customer account.

True

When the allowance account in the Trail Balance Column of a work sheet has a credit balance, the amount of the adjustment is added to the Trail balance amount.

True

When the percentage of total sales on account method is used, the estimated uncollectible accounts expense is calculated by multiplying total sales on account times the percentage.

True

Accounts receivable that cannot be collected are called uncollectible accounts.

True

Allowance for Uncollectible accounts is debited to write off a customer account.

True

A business usually knows at the time sales are made which customer accounts will become uncollectible.

False

Accounts receivable is is debited to write off a customer account.

False

Estimating the percentage of uncollectible accounts expense in the same period as the sales revenue is an application of the Realization of Revenue accounting concept.

False

The Realization of Revenue accounting concept explains why failing to collect an account at a later date than the original sale cancels the sale and reduces revenue.

False

The amount of accounts receivable that is uncollectible decreases revenue.

False

The balance of the account allowance for Uncollectible Accounts is extended to the Income Statement Credit column of the work sheet.

False

The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts, is called book value.

False

A business generally sells on account to encourage sales.

True


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