Chapter 5 Accounting

On March 17, Fox Lumber sells materials to Whitney Construction for $12,000, terms 2/10, n/30. What is the amount of net revenues (sales minus sales discounts) as of March 23?

$11,760.

On March 17, Fox Lumber sells materials to Whitney Construction for $12,000, terms 2/10, n/30. Whitney pays for the materials on March 23. What amount would Fox record as revenue on March 17?

$12,000.

On April 1, 20X1, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest are due on March 31, 20X2 (one year later). Assuming Nelson Inc. has a December 31 year-end, on March 31, 20X2, Nelson Inc. will record interest revenue of:

$2,000.

Kidz Incorporated reports the following aging schedule of its accounts receivable with the estimated percent uncollectible. Age Group Amount Receivable Estimated Percent Uncollectible 0-60 days $ 20,000 2 % 61-90 days 6,000 15 % More than 90 days past due 2,000 50 % Total $ 28,000 At what amount would Allowance for Uncollectible Accounts be reported in the current year's balance sheet?

$2,300.

A company has the following account balances at the end of the year: Credit Sales = $400,000 Accounts receivable = $80,000 Allowance for Uncollectible Accounts = $400 credit!!! The company estimates future uncollectible accounts to be 4% of accounts receivable. At what amount would Bad Debt Expense be reported in the current year's income statement?

$2,800.

A company has the following account balances at the end of the year: Credit Sales = $400,000 Accounts receivable = $80,000 Allowance for Uncollectible Accounts = $400 debit!!! The company estimates future uncollectible accounts to be 4% of accounts receivable. At what amount would Bad Debt Expense be reported in the current year's income statement?

$3,600.

A company has the following account balances at the end of the year: Credit Sales = $400,000 Accounts receivable = $80,000 Allowance for Uncollectible Accounts = $400 credit The company estimates 1% of credit sales will be uncollectible. At what amount would Allowance for Uncollectible Accounts be reported in the current year's balance sheet?

$4,400.

Suppose the balance of the allowance for uncollectible accounts at the end of the current year is $800 (credit) before any adjustment entry. The company estimates future uncollectible accounts to be $5,600. At what amount would bad debt expense be reported in the current year's income statement?

$4,800.

On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30. Frederickson pays for the services on August 12. What is the amount of net revenues (total revenue minus sales discounts) as of August 12?

$4,850.

On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30. Frederickson pays for the services on August 12. What amount would Sanders record as revenue on August 4?

$5,000.

On December 31, the Accounts Receivable ending balance is $80,000. Assume that the unadjusted balance of Allowance for Uncollectible Accounts is a credit of $500 and that the company estimates 7% of the accounts receivable will not be collected. The amount of bad debt expense recorded on December 31 will be:

$5,100. (CREDIT)

At the end of its first year of operations, a company establishes an allowance for future uncollectible accounts for $5,600. At what amount would bad debt expense be reported in the current year's income statement?

$5,600.

On April 1, 20X1, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest are due on March 31, 20X2 (one year later). On December 31, 20X1, Nelsen will accrue interest revenue of:

$6,000.

On December 31, the Accounts Receivable ending balance is $80,000. Assume that the unadjusted balance of Allowance for Uncollectible Accounts is a debit of $500 and that the company estimates 7% of the accounts receivable will not be collected. The amount of bad debt expense recorded on December 31 will be:

$6,100. (DEBIT)

Nija Incorporated reports the following aging schedule of its accounts receivable with the estimated percent uncollectible. What is the total estimate of uncollectible accounts using the aging method? Age Group Amount Receivable Estimated Percent Uncollectible 0-60 days $ 40,000 1 % 61-90 days 15,000 20 % More than 90 days past due 5,000 60 % Total $ 60,000

$6,400.

On January 1, 2021, Nees Manufacturing lends $10,000 to Roberson Supply using a 9% note due in eight months. Calculate the amount of interest revenue Nees will record on September 1, 2021, the date that the note is due.

$600.

On September 1, Bates Supplies borrows $30,000 from Vines Incorporated by signing an 8% note due in 12 months. Calculate the amount of interest revenue Vines will record on December 31, four months after the note is issued.

$800.

Use the information below to calculate net revenues. Service Revenue $ 100,000 Sales Discounts $ 2,000 Accounts Receivable $ 15,000 Sales Allowances $ 7,000 Cash $ 18,000

$91,000.

Schmidt Company's Accounts Receivable balance is $100,000, its adjusted balance in Allowance for Uncollectible Accounts is $4,000, and its bad debt expense is $3,800. The net amount of accounts receivable is:

$96,000.

On May 1, 2021, Nees Manufacturing lends $10,000 to Roberson Supply using a 9% note due in 12 months. Nees has a December 31 year-end. Calculate the amount of interest revenue Nees will report in its 2021 and 2022 income statements.

2021 = $600; 2022 = $300.

At the beginning of 2021, Clay Ventures has total accounts receivable of $100,000. By the end of 2021, Clay reports net credit sales of $900,000 and total accounts receivable of $200,000. What is the receivables turnover ratio for Clay Ventures?

6.0.

At the beginning of the year, Dawnetta Fashions has total accounts receivable of $300,000. By the end of the year, Dawnetta reports total credit sales of $1,500,000 and total accounts receivable of $200,000. What is the receivables turnover ratio for Dawnetta Fashions?

6.0.

Use the information below to calculate the receivables turnover ratio: Net Credit Sales $ 200,000 Beginning Accounts Receivable $ 40,000 Ending Accounts Receivable $ 10,000 Cash $ 20,000

8.

At the end of its first year of operations, a company estimates future uncollectible accounts to be $4,500. The company's year-end adjusting entry would include

A credit to Allowance for Uncollectible Accounts for $4,500.

Using the allowance method, the entry to record a write-off of accounts receivable will include

A debit to Allowance for Uncollectible Accounts.

The entry to record the estimate for uncollectible accounts includes:

A debit to Bad Debt Expense.

The effect of writing off a specific account receivable is:

A reduction in the Allowance for Uncollectible Accounts.

The amount of cash owed to the company by its customers from the sale of products or services on account is known as:

Accounts Receivable.

When a company provides services on account, which of the following accounts is debited?

Accounts Receivable.

The direct write-off method is generally not permitted for financial reporting purposes because

Accounts receivable are not stated for the amount of cash expected to be collected.

The allowance method for uncollectible accounts

All of the answer choices are correct.

Accounts receivable are best described as

Assets of the company representing the amount owed by customers.

A sales discount is recorded by the seller as a(n):

Contra revenue.

A company has the following aging schedule of its accounts receivable with the estimated percent uncollectible: Age Group Amount Receivable Estimated Percent Uncollectible Not yet due $ 175,000 4 % 0-60 days past due $ 40,000 10 % 61-120 days past due $ 10,000 30 % More than 120 days past due $ 5,000 60 % Assuming the balance of Allowance for Uncollectible Accounts is $3,000 (credit) before adjustment, which of the following would be recorded in the year-end adjusting entry?

Debit Bad Debt Expense for $14,000.

A company provides services to a customer in the current year and then determines in the following year that the customer's account needs to be classified as uncollectible. If the company uses the direct write-off method, which of the following would be recorded in the following year at the time of the write-off?

Debit Bad Debt Expense.

On January 18, a company provides services to a customer for $500 and offers the customer terms 2/10, n/30. Which of the following would be recorded when the customer remits payment on January 25?

Debit Sales Discount for $10.

Under the allowance method for uncollectible accounts, the balance of Allowance for Uncollectible Accounts increases when:

Future bad debts are estimated.

Under the direct write-off method, uncollectible accounts are recorded

In the period the account is determined actually uncollectible.

Using the allowance method, the effect on the current year's financial statements of writing off an account receivable generally is to Decrease total assets. Decrease net income.

Neither I nor II

If a company uses the allowance method of accounting for uncollectible accounts and writes off a specific account:

Net accounts receivable do not change.

Which of the following transactions would result in an account receivable?

Providing services to customers on account.

Which of the following refers to the seller reducing the customer's balance owed because of some deficiency in the company's product or service?

Sales Allowance.

The receivables turnover ratio is a measure of:

The number of times during a year that the average accounts receivable balance is collected.

If a company uses the allowance method of accounting for uncollectible accounts and collects cash on an account receivable previously written off:

There is no change in total assets.

Under the direct write-off method, the balance of the accounts receivable account is reduced:

When an account is proven uncollectible.