ACT Chapter 5; Receivables and Sales
false
t/f The Percentage-of-Receivables approach to measuring bad debt expense focuses on the ration of accounts receivables to sales
false
t/f? Accounts receivable are classified as current assets because they accrue interest at a specified interest rate
false
t/f? Accounts receivable are classified as current assets because they are a formal agreement to pay within a specific period of time
false
t/f? Accounts receivable are classified as current assets because they are matched with accounts payable for the period
true
t/f? Accounts receivable are classified as current assets because they will be converted to cash within 1 year or the normal operating cycle
true
t/f? Accounts receivable are normally classified in the balance sheet as current assets
false
t/f? Accounts receivable are normally classified in the balance sheet as noncurrent assets
false
t/f? Accounts receivable are normally classified in the income statement as other income
false
t/f? Accounts receivable are normally classified in the income statement as revenue
decreases, retained
A sales allowance __________ the amount owed by the customer for merchandise that is ______ by the customer.
expenses, revenues
Adjusting for estimates of future uncollectible accounts matches ____________ in the same period as the _________ they help to generate
net realizable value
Gross accounts receivable less allowance for doubtful accounts is the __________ ______________________ of accounts receivable
sales allowance
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 ___________________________
credit
The account "allowance for uncollectible accounts" normally has a ________ balance
uncollectible acocunts
The allowance method estimates _______________________
bad debt expense
The amount of adjustment to the allowance for uncollectible accounts is referred to as ____________________________
percentage-of-receivables method
The method of estimating uncollectible accounts based on the percentage of accounts receivable expected not to be collected is referred to as the _________________________
allowance for uncollectible accounts
To record bad debts at the end of the period, an adjustment would be made by a credit to _______________
contra asset
What type of account is Allowance for Uncollectible Accounts?
Sales Return
When merchandise is returned for a refund or for credit to be applied to other purchases, this situation is called a _____________________________
allowance method
recording an adjustment at the end of each period to allow for the possibility of future un-collectible debt is referred to as the ________________________ under US GAAP.
false
t/f The Percentage-of-Receivables approach to measuring bad debt expense focuses on cash flows from sales
false
t/f The Percentage-of-Receivables approach to measuring bad debt expense focuses on matching net credit sales with the appropriate percentage expected to be uncollectable
true
t/f The Percentage-of-Receivables approach to measuring bad debt expense focuses on net realizable value of accounts receivable