Accounting
An Allowance for Uncollectible Accounts balance in the Trial balance Credit column of a work sheet means previous fiscal period estimates have not yet been identified as Uncollectible.
True
At the end of a fiscal period, the account credited to show the estimated amount of uncollectible accounts is Allowance for Uncollectible Accounts.
True
At the end of a fiscal period, the account debited to show the estimated amount of uncollectible accounts is Allowance for Uncollectible Accounts.
True
Balance of accounts receivable less allowance for uncollectible accounts is the equation for calculating book value of accounts receivable.
True
Canceling the balance of a customer account because the customer does not pay is called writing off an account.
True
Crediting the estimated value of uncollectible accounts to a contra account is called the allowance method of recording losses from uncollectible accounts.
True
Risk of loss occurs when a business sells on account.
True
The difference between an asset's account balance and its related contra account balance is called its book value.
True
The loss from an uncollectible account is a regular expense of doing business.
True
When a customer account is written off under the allowance method, book value of accounts receivable decreases.
False
When an account is written off, the account balance is transferred to Allowance for Uncollectible accounts.
False
Allowances for Uncollectible Accounts is a contra account to its related asset account, Accounts Receivable.
True
Using the percentage of total sales on account to estimate uncollectible accounts expense assumes that a portion of every sale on account dollar will become uncollectible.
True
When a previously written-off account is collected, Accounts receivable is both debited and credited for the amount collected.
True
When an adjusting entry for uncollectible accounts expense is recorded, Allowance for Uncollectible Accounts is credited.
True
When the account Allowance for Uncollectible accounts is used, a customer past-due account is written off as uncollectible by debiting Allowance for Uncollectible Accounts by crediting Accounts REceivable and the customer account.
True
When the allowance account in the Trail Balance Column of a work sheet has a credit balance, the amount of the adjustment is added to the Trail balance amount.
True
When the percentage of total sales on account method is used, the estimated uncollectible accounts expense is calculated by multiplying total sales on account times the percentage.
True
Accounts receivable that cannot be collected are called uncollectible accounts.
True
Allowance for Uncollectible accounts is debited to write off a customer account.
True
A business usually knows at the time sales are made which customer accounts will become uncollectible.
False
Accounts receivable is is debited to write off a customer account.
False
Estimating the percentage of uncollectible accounts expense in the same period as the sales revenue is an application of the Realization of Revenue accounting concept.
False
The Realization of Revenue accounting concept explains why failing to collect an account at a later date than the original sale cancels the sale and reduces revenue.
False
The amount of accounts receivable that is uncollectible decreases revenue.
False
The balance of the account allowance for Uncollectible Accounts is extended to the Income Statement Credit column of the work sheet.
False
The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts, is called book value.
False
A business generally sells on account to encourage sales.
True
