ACC 210

Sales to customers in which the customers pay within 30 to 60 days are referred to as (Select all that apply.)

-credit sales -sales on account

Which of the following is a discount in the amount to be paid if the customer pays within a specified time period?

Sales discount

Tudor Corp. has an ending balance in the accounts receivable account of $20,000. Tudor recorded bad debt expense of $1,000. Tudor has an ending balance in the allowance for uncollectible accounts of $2,000. What is the net accounts receivable balance?

$18,000

A partial adjustment to the amount owed by the customer for goods that were not returned, but did not fully meet the customer's expectations is referred to as a sales

Allowance

Amend Inc. debited Accounts Receivable and credited Allowance for Uncollectible Accounts to reestablish an account previously written off. Amend Inc. should also debit _______ and credit _______.

Cash, accounts receivable

he allowance method is required by

GAAP

When a customer returns a product for a refund, in which account is the entry recorded?

Sales return

A trade discount is

a percentage reduction from list price

The allowance for uncollectible accounts is a contra account to

accounts receivable.

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

aging

The cost of estimated accounts receivable that will not be collected is referred to as

bad debt expense

A trade discount is recognized

by reducing the revenue amount recorded.

Allowance for Uncollectible Accounts has a credit balance because it is a(n) _____ account.

contra-asset

Shannon Corp. uses the aging method to account for bad debt expense. Shannon determines that a customer account of $10,000 should be written off as uncollectible. The write off of the account will include

debit Allowance for Uncollectible Accounts.

The Accounts Receivable account is reduced when the seller:

determines that a specific customer account will not be collectible

True or false: Accounts receivable not expected to be collected should be counted in the assets of the company until they are later written off.

false

When the allowance method is used, the write-off of an uncollectible account:

has no effect on net income

The direct write-off method is required for

income tax purposes.

Receivables not expected to be collected should

not be counted in assets of the company.

Prime Corp. has an ending balance in the accounts receivable account of $100,000. Prime recorded bad debt expense of $3,000. Prime has an ending balance in the allowance for uncollectible accounts of $7,000. What is the net accounts receivable balance?

$93,000

When an account previously written off is collected in full, the entry to reverse the previous write-off would require which of the following?

-credit allowance for uncollectible accounts -debit accounts receivable

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

Sales return

The account "Allowance for Uncollectible Accounts" normally has a

credit balance

The allowance method estimates

uncollectible accounts

The account "Allowance for Uncollectible Accounts" is classified as

a contra asset to accounts receivable.

The list price in Boyton's catalog indicates that Product A sells for $3,000, with a trade discount of 5%. Boyton sells the goods to a customer who qualifies for the trade discount. At what amount should Boyton record the sale and related account receivable?

$2,850 Reason: $3,000 less 5% discount

Joyce Corp. uses the percentage-of-receivables method to account for bad debt expense. Joyce determines that a customer account of $20,000 should be written off as uncollectible. The write off of the account will include which of the following entries?

-Credit to Accounts Receivable -Debit to Allowance for Uncollectible Accounts

The allowance for uncollectible accounts is a contra account to

Accounts receivable

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

Allowance method

A sales allowance ____ the amount owed by the customer for merchandise that is _____ by the customer. Multiple choice question.

Decreased, retained

Under the allowance method, companies estimate _____ uncollectible amounts and report those estimates in the _____ year.

Future, current

Total revenues less discounts, returns, and allowances are referred to as

Net Revenues

A cash discount representing a reduction in the amount to be paid by a credit customer if the customer pays within a specified period of time is also referred to as a(n)

Sales discount or cash discount

To record an estimate for future bad debts at the end of the period, an adjustment would be made with a credit to

allowance for uncollectible accounts.

With the allowance method, bad debt expense is recorded

at the end of the period when bad debts are estimated.

The formula to compute the receivables turnover ratio is net credit sales divided by

average accounts receivable.

Ophelia Inc. just learned that Patton Inc., one of its customers with an outstanding accounts receivable balance, filed for bankruptcy. Assuming that the company utilizes the allowance method, Ophelia should record a(n):

decrease in Accounts Receivable

The journal entry to record bad debt expense includes: (Select all that apply.)

-credit to allowance for uncollectible accounts -debit to bad debt expense

A trade discount is a reduction from the list price, which is used to: (Select all that apply.)

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

A trade discount is a reduction from the list price, which is used to:

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

Accounts receivable should be classified as a(n)

Asset

What is the formula for the receivables turnover ratio?

Net credit sales divided by average accounts receivable (net)

An informal credit arrangement with a customer for payment to be received after the sale is classified as a(n)

account receivable

Gwendolyn uses the allowance method to account for uncollectible receivables. Gwendolyn should record _____ bad debt expense ______.

estimated; at the end of the year

Accounts receivable are typically classified as current assets because

they will be converted to cash within 1 year.

The estimated expense for accounts that may not be collected is referred to as

bad debt expense.