Chapter 6 Smartbook

A customer that was written off now pays. The journal entry recorded to reverse this previously written-off amount is recorded as a ______.

debit Accounts receivable and credit Allowance for doubtful accounts

Since accounting numbers, such as the allowance for doubtful accounts balance, are based on ____________, financial statements are susceptible to management manipulation.

estimates

The benefits of internal control procedures are that they ______. (Check all that apply.)

improve the efficiency and effectiveness of operations enhance the reliability of accounting information protect against theft of assets

The ____________ of credit sales is the method that estimates bad debt expense using credit sales and the _____________of accounts receivable method estimates the allowance for doubtful accounts based on the time each account receivable has been outstanding.

percentage, Aging

During the month, Cellum, Inc. sold 100 cells at a price of $100 each. Each cell was sold at a 1% sales discount. Cellum had returns of $198 (net of discounts) and incurred bank service charges of $20. Net sales for the month ended equals

9,702

Which of the following are contra-asset accounts? (Check all that apply.)

Accumulated depreciation Allowance for doubtful accounts

Select all of the following that are properly defined. Allowance for Doubtful Accounts is the amount of receivables estimated to be uncollectible. Accounts Receivable (Gross) includes both collectible and uncollectible receivables. Accounts Receivable (Net) reports the amount of receivables expected to be collected. Accounts Receivable (Gross) includes only the collectible receivables. Accounts Receivable (Net) is the net realizable value.

Allowance for Doubtful Accounts is the amount of receivables estimated to be uncollectible. Accounts Receivable (Gross) includes both collectible and uncollectible receivables. Accounts Receivable (Net) reports the amount of receivables expected to be collected. Accounts Receivable (Net) is the net realizable value.

Delectable, Inc.'s unadjusted trial balance includes Accounts receivable of $10,000; Allowance for doubtful accounts as a $50 credit balance; and Credit sales of $100,000. Based on an aging of its receivable, management estimates that $1,000 of receivables will be uncollectible. Delectable's financial statements will show ______. (Check all that apply.)

Allowance for Doubtful Accounts of $1,000 Bad Debt Expense of $950

ABC, Inc.'s unadjusted trial balance included Accounts receivable of $80,000; Allowance for doubtful accounts as a $750 credit balance; and Credit sales of $400,000. ABC uses the aging-of-receivables method and estimates that $8,000 of its receivables will be uncollectible. After the adjusting entry is made, ABC's financial statements will report: (Check all that apply.)

Bad debt expense of $7,250 on the income statement. Allowance for doubtful accounts of $8,000 on the balance sheet.

The entry to record the collection of cash from major credit cards includes a debit to ______. Credit card discount Accounts payable Sales revenue Accounts receivable

Credit card discount

Using the aging approach, management estimates that $1,000 of accounts receivable will be uncollectible. The Allowance for Doubtful Accounts has a $100 unadjusted debit balance. The Allowance for Doubtful Accounts on the balance sheet will equal ______.

$1,000

Beckers, Inc. accepts major credit cards from its customers. The credit card companies charge 2%. The entry to record the collection of $1,000 in credit card sales includes a ______. (Check all that apply.)

credit to Sales of $1,000 debit to Cash of $980 debit to Credit card discount of $20

Using the aging approach, management estimates that $1,000 of Accounts Receivable will be uncollectible. The Allowance for Doubtful Accounts has a $100 unadjusted credit balance. The adjusting entry to record estimated bad debts includes a ______. (Check all that apply.)

debit to Bad Debt Expense of $900 credit to Allowance for Doubtful Accounts of $900