acg

The allowance method is required by ___1___.

Blank 1: GAAP

A(n) ____1_____ ____2_______ is the legal right to receive cash from a credit sale and represents an asset of the company.

Blank 1: account, trade, or accounts Blank 2: receivable, recievable, or receivables

The account "Allowance for Uncollectible Accounts" is classified as Multiple choice question. a contra equity account. an expense in the income statement. a contra asset to accounts receivable. a liability account in the balance sheet.

a contra asset to accounts receivable.

To record an estimate for future bad debts at the end of the period, an adjustment would be made with a credit to Multiple choice question. accounts receivable. bad debt expense. allowance for uncollectible accounts. sales returns and allowances.

allowance for uncollectible accounts.

Accounts receivable should be classified as a(n) Multiple choice question. liability. revenue. expense. asset.

asset.

The estimated expense for accounts that may not be collected is referred to as Multiple choice question. sales discounts. interest expense. bad debt expense. amortization expense. accounts receivable.

bad debt expense.

The Accounts Receivable account is reduced when the seller: Multiple choice question. adopts the allowance method records the allowance for uncollectible accounts determines that a specific customer account will not be collectible

determines that a specific customer account will not be collectible

When a customer returns a product for a refund, in which account is the entry recorded? Multiple choice question. purchase return purchase discount sales discount sales return

sales return

Accounts receivable are typically classified as current assets because Multiple choice question. they are matched with accounts payable for the period. they are a formal agreement to pay within a specific period of time. they accrue interest at a specified interest rate. they will be converted to cash within 1 year.

they will be converted to cash within 1 year.

The allowance method estimates Multiple choice question. trade discounts. sales discounts. uncollectible accounts. future sales.

uncollectible accounts.

A customer account that is not expected to be collected is referred to as a(n) ____1___ debt.

Blank 1: bad, uncollectible, uncollectable, noncollectable, or noncollectible

An informal credit arrangement with a customer for payment to be received after the sale is classified as a(n) Multiple choice question. note payable. prepaid receivable. nontrade receivable. account receivable.

account receivable.

The allowance for uncollectible accounts is a contra account to Multiple choice question. revenue. sales allowances. accounts receivable. bad debt expense.

accounts receivable.

A company that expects that some of its customers will not pay the agreed upon sales price must utilize the Multiple choice question. direct write-off method allowance method bad debt method debt forgiveness method

allowance method

When merchandise is returned for a refund or for credit to be applied to other purchases, the situation is called a(n) __1____ ___2____ .

Blank 1: sales Blank 2: return

When merchandise is returned for a refund or for credit to be applied to other purchases, the situation is called a(n) ___1____ ___2_____ .

Blank 1: sales Blank 2: return

A customer account that is not expected to be collected is referred to as a bad debt or ___1_____ account.

Blank 1: uncollectible, doubtful, or allowance

A customer account that is not expected to be collected is referred to as a bad debt or ____1____ account.

Blank 1: uncollectible, doubtful, or allowance

Under the allowance method, companies estimate _____ uncollectible amounts and report those estimates in the _____ year. Multiple choice question. future; future current; current current; future future; current

future; current

Companies extend credit to customers and sell goods on account because Multiple choice question. it increases inventory. it reduces accounts receivable. it increases sales.

it increases sales.

When a customer returns a product for a refund, in which account is the entry recorded? Multiple choice question. purchase return sales discount purchase discount sales return

sales return

What is the formula for the receivables turnover ratio? Multiple choice question. Net credit sales divided by average total assets. Average accounts receivable (net) divided by net credit sales. Average accounts receivable divided by average total assets. Net credit sales divided by average accounts receivable (net).

Net credit sales divided by average accounts receivable (net)

A trade discount is Multiple choice question. a percentage reduction from list price. a percentage reduction of the amount due for early payment. a rebate from the manufacturer. an increase in the account receivable.

a percentage reduction from list price.

An informal credit arrangement with a customer for payment to be received after the sale is classified as a(n) Multiple choice question. note payable. account receivable. prepaid receivable. nontrade receivable.

account receivable.

The formula to compute the receivables turnover ratio is net credit sales divided by Multiple choice question. average accounts payable. the receivable turnover ratio. average accounts receivable. average total assets.

average accounts receivable.

Select all that apply A trade discount is a reduction from the list price, which is used to: (Select all that apply.) Multiple select question. change prices without publishing a new catalog reduce the sale price for interest received give quantity discounts to customers disguise real prices from competitors encourage customers to pay quickly

change prices without publishing a new catalog give quantity discounts to customers disguise real prices from competitors

A disadvantage to selling on account is Multiple choice question. it does not create an asset. it is difficult to estimate sales. customers do not always pay. the sale cannot be recorded until the customer pays.

customers do not always pay.

Select all that apply The journal entry to record bad debt expense includes: (Select all that apply.) Multiple select question. debit to bad debt expense credit to allowance for uncollectible accounts credit to bad debt expense debit to allowance for uncollectible accounts

debit to bad debt expense credit to allowance for uncollectible accounts