Chapter 5

¡Supera tus tareas y exámenes ahora con Quizwiz!

Amen debited accounts receivable and credited allowance for doubtful accounts. Amen should also debit _______ and credit ______

cash accounts receivable

allowance for uncollectible accounts

contra-asset estimate of the total uncollectible AR $ they don't think they will get

which of the following are classified as receivables?

Interest due from loans to customers loans by a company to other entities

A claim to receive cash in the future is a

Receivable

the account sales return and allowances account is a ___________ account and requires a _______ entry to increase the amount

Contra-revenue Debit

Which of the following items are classified as receivables

Tax refund claim amounts owed by customers Amounts loaned and expected to be repaid

What is a note?

a formal lending/credit agreement based on a written debt instrument, usually interest bearing

A trade discount is

a percentage reduction from list price

sales discount

a reduction in the sales price granted to customer for paying promptly

sales allowances

a reduction in the sales price granted to customer to satisfy a complaint the customer has about the product/service

sales returns

a return of product by customer who is not satisfied with it

An ______ is the legal right to receive cash from a credit sale and represents an asset of the company

accounts receivable

A company that expects that some of its customers will not pay the agree upon sales price must utilize the

allowance method

net realizable value

amount expected to be received in cash from an asset

compared to other methods of estimating uncollectible accounts, the aging of accounts receivable method tends to

be more accurate

sales allowance, sales discount

contra-revenue

Accounts receivable should be classified as a

current asset

Bad debt expense

current years cost of estimated future uncollectible AR

Willie earns a bonus each year if the company's net income is at least 100000. They use the allowance method for uncollectible accounts. What could willie do to make sure he gets a bonus

decrease estimate of uncollectible accounts will increase net income

Note receivable

formal credit arrangement between borrower and lender

notes receivables

generally longer-term than accounts receivables and include interest received

On Nov 1, Roddick provides services on account for 10000 and accepts a six-month, 9% note from the customer

notes rec 10000 service rev 10000 -Dec 31 interest rec 150 interest rev 150 -May 1 cash 10450 notes rec 10000 interest rev 300 interest rec 150

Two entries are required when a previous written off account is paid. These two entries include

record the collection on the account receivable reinstate the account receivable

When merchandise is returned for a refund or for credit to be applied to other purchases, the situation is called a

sales return

net revenue

sales revenue minus sales allowance/ discount/return

Direct write off method

timing Bad debt expense is recorded when accounts actually become uncollectible; no estimate time is recorded Bad debt expense XXX accounts receivables XXX not allowed by US GAAP

allowance for uncollectible accounts

total estimated future uncollectible AR

Roddick normally provides services for 600. on Nov 1, they decide to charge only 500 to a long time customer. services provided on account with terms 2/10; n/30

Accounts Rec 500 Service revenue 500 -Nov 3, roddick recognizes defective services and grants 100 allowance sales allowance 100 accounts rec 100 -Nov 9 roddick receives the full amount of cash owed cash 392 sales disc 8 accounts rec 400

sales return and allowances account is classified as a

Contra revenue account

The allowance method is required consistent under

GAAP

The approach the considers the age of various accounts receivables to estimate uncollectible accounts is referred to as the ________ method of accounts receivables

aging

Accounts receivable

amounts owed to a company by customers for products or services provided in the normal course of business

accounts receivable

amounts owed to a company by customers for products or services provided in the normal course of business

When a business sells goods to a customer, and the customer promises to pay later, this is referred to as

credit sales

Account receivable

informal credit agreement with trade customers


Conjuntos de estudio relacionados

WHA Study Guide for the Neolithic Revolution Test

View Set

Mental Health Chapter 18 Evolve Questions (Eating and Feeding Disorders)

View Set

Chapter 4 - Atmospheric Pressure and Wind

View Set