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The approach that considers the age of various accounts receivables to estimate uncollectible accounts is referred to as the method of accounts receivable. (Enter only one word.)

aging

Sales Returns and Sales Allowances are ___ ___ accounts and require a debit entry to increase the account.

contra revenue

The account "Allowance for Uncollectible Accounts" normally has a balance. (Enter only one word.)

credit

A formal, signed credit agreement between a lender and a borrower is called a(n) _____ by the lender.

note receivable

Assume Company X is in its fifth year of operation. Analyze the following schedule. What conclusion can be drawn from the following schedule?

the target amount in allowance for uncollectible accounts is $25,500.

When merchandise is returned for a refund or for credit to be applied to other purchases, the situation is called a(n) . (Enter only one word per blank.)

sales return

For accounts receivable, the longer an account is outstanding,

the more likely it will prove uncollectible.

Accounts receivable are typically classified as current assets because

they will be converted to cash within 1 year.

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

On Sept 1, year 1, Parnell Inc. received a 6-month, 6%, $2,000 note receivable with interest and principal to be collected on March 1 of year 2. What is the amount of interest revenue that should be recorded for year 1?

$40

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

Adrian Corp. sells goods on account for $100,000 on May 1. On May 15, the customer returns $40,000 of the merchandise. The customer has not yet paid for any of the goods. What will Adrian record on May 15? (Select all that apply.)

Credit to Accounts Receivable. Debit to Sales Returns.

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 ReceivableDebit to allowance for Uncollected accounts

Net revenues is calculated as total revenues minus which of the following items?

Sales returns Sales discounts Sales allowances

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

a balance sheet

The account "Allowance for Uncollectible Accounts" is classified as

a contra asset to accounts receivable.

A trade discount is

a percentage reduction from list price.

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

account receivable

The allowance for uncollectible accounts is a contra account to

accounts receivable.

The amount of cash owed to a company by its customers from the sale of goods or services is referred to as

accounts receivable.

Accounts receivable should be classified as a(n)

asset.

A customer account that is not expected to be collected is referred to as a(n) debt. (Enter one word per blank)

bad debt

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

bad debt expense

Compared to other methods of estimating uncollectible accounts, the aging of accounts receivables method tends to

be more accurate

When a business provides services to a customer, and the customer promises to pay later, this is referred to as

credit sale

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.

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 disadvantage to selling on account is

customers do not always pay.

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.

Adrian Corp. sells goods on account for $100,000 on May 1. The customer paid for the goods on May 10. On May 15, the customer returns $40,000 of the merchandise. The entry Adrian makes on May 15 will include the following: (Select all that apply.)

debit to Sales Returns credit to Cash

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

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

decreases; retained

Companies extend credit to customers and sell goods on account because

it increases sales.

An aging schedule classifies accounts receivable based on

length of time outstanding.

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

net

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) discount.

sales discount

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

sales discount

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

sales return

The allowance method estimates

uncollectible accounts.

A customer account that is not expected to be collected is referred to as a bad debt or account. (Enter one word per blank)

uncollectible or allowance

Bell provides $500 of services to customers on account with terms 3/10, n/30. The Service Revenue account is credited for $500. If the customer pays within 10 days, Bell will record which of the following?

Debit Sales Discount $15

Claire provides $100 of services to customers on account with terms 2/10, n/30. The Service Revenue account is credited for $100. If the customer pays within 10 days, Claire will record which of the following?

Debit Sales Discount $2 Debit Cash $98 Credit Accounts Receivable $100

Warner Corp. sells goods on account for $10,000 on April 2. On April 20, the customer returns $3,000 of the merchandise. The customer has not yet paid for any of the goods. What is the entry Warner will make on April 20 when the goods are returned?

Debit Sales Returns; credit Accounts Receivable.

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

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.

The Sales Returns and Sales Allowances accounts are classified as

contra revenue accounts.

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

contra-asset

The Accounts Receivable account is reduced when the seller:

determines that a specific customer account will not be collectible

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

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

The formula for calculating interest on a note is

face value x annual rate x fraction of the annual period.

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

future; current

A formal credit arrangement between a creditor and debtor is called a(n)

note receivable.


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