Acct Chapter 7

On August 21, Alix Company receives a $2,000, 60-day, 6% note from a customer as payment on her account. How much interest will be due on October 20, the due date?

$20

On March 14, Zest Co. accepted a 120-day, 6% note in the amount of $5,000 from AZC Co., a customer. On the due date of the note, AZC dishonors the note and fails to pay. The journal entry that Zest would make to record the failure to pay this note on the due date would include a debit to:

Accounts Receivable - AZC for $5,100

To record a sale on account, the company should debit:

Accounts Receivable.

The ________ method of accounting for bad debts matches the estimated loss from uncollectible accounts receivables against the sales they helped produce.

Allowance

Zion Company sells merchandise on account to BRC, Inc. in the amount of $1,200. The entry to record this sale would include a: (Check all that apply.)

Credit to sales Debit to accounts receivable

A 90-day note is signed on October 21. The due date of the note is:

January 19

Woodstock Co. had $500 of credit cards sales. The net cash receipts were deposited immediately into Woodstock's bank account less a 2% fee. The entry to record this sales transaction would include a credit to:

Sales in the amount for $500

of accounts receivable method uses several percentages to estimate the allowance.

aging

The ____________ method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible. No attempt is made to predict bad debts expense.

direct write off

True or false: The direct write-off method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce.

false

The allowance for doubtful accounts is a contra asset account that equals:

total uncollectible accounts