ch 7 acct

Flash Co. uses the allowance method to account for bad debts. At the end of the year, Flash Co.'s unadjusted trial balance shows an accounts receivable balance of $45,000; allowance for doubtful accounts balance of $400 (debit); and sales of $1,500,000. Based on history, Flash estimates that bad debts will be 0.5% of sales. The entry to record estimated bad debts will include an debit to Bad Debts Expense in the amount of:

7,500

Thomas Co. sold $1,000 worth of merchandise on a bank credit card with a 3% fee. The entry to record the sales transaction would include a debit to Cash in the amount of

970

On September 1, Horn Co. accepted a 60-day, 5% note in the amount of $3,000 from a customer. On the due date of the note, the customer dishonors the note and fails to pay. The journal entry that Horn would make on the due date would include debit to:

Accounts Receivable for $3,025

To record a sale on account, the company should debit:

Accounts Receivable.

If an account receivable balance previously written off using the direct write-off method is later collected in full, the entry to record the payment must include a credit to:

Bad debts expense

On January 1, JC Co. accepted a 60-day, 6%, note in the amount of $10,000 from a customer. On March 2, the due date of the note, the customer honors the note and pays in full. The journal entry that JC would make to record the receipt of payment of this note would include a debit to:

Cash in the amount of $10,100

On November 1, Alice Co. accepted a 90-day, 6%, $2,000 note due January 30. On December 31, the appropriate adjusting entry was made. On January 30 of the next year, the note was honored and paid in full. The entry to record receipt of payment on January 30 would include a credit to:

Interest Receivable for $20. Interest Revenue for $10. Notes Receivable for $2,000

In July, Lane Co. sells merchandise to Avery Co. on account. In August, Avery pays the balance in full. The entry that Lane will make to record the receipt of cash will include a credit to the _______ account.

accounts receivable

The (allowance/direct write-off)_____, method of accounting for bad debts records estimated bad debts expense in the period when the related sales are recorded.

allowance

Zino Company determines that a customer balance of $200,from Hollis Co. is uncollectible. Zino uses the allowance method to account for bad debts. The entry to write off the uncollectible balance will include a:

debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.

On February 15, Symth Co. determines that it cannot collect $500 owed by its customer, A. Winds. Symth records the loss using the direct write-off method. This entry to record the write-off on February 15 would include a: (Check all that apply.) Multiple select question.

debit to Bad Debts Expense. credit to Accounts Receivable - A. Winds.

Lina Co. uses the allowance method to account for bad debts. On January 28, Lina determines that a $200 balance from ZRT, Inc. is uncollectible and writes the balance off. The journal entry to write this balance off will include a:

debit to allowance for doubtful accounts credit to accounts receivable

On July 10, Yao Co. collects $740 from Ean, Inc. from a prior credit sale. This entry would be recorded by Yao with a:

debit to cash credit to accounts receivable

On December 1, Christy Co. accepted a 60-day, 6%, $1,000 note due January 30. On December 31, the appropriate year-end adjusting entry was made. On January 30, the note was honored and paid in full. The entry to record receipt of payment on January 30 (assuming no reversing entry was made) would include a credit to: (Check all that apply.) Multiple select question.

Interest Receivable for $5. Interest Revenue for $5. Notes Receivable for $1,000.

DonCo, Inc. sold merchandise on January 14, and accepted a 90-day, 5% promissory note in the amount of $5,000. On January 14, the entry to record this transaction would include a debit to:

Notes Receivable in the amount of $5,000

A company has $150,000 of credit sales during the year and estimates that $1,000 of its accounts receivable will be uncollectible. The adjusting entry will include a credit to

allowance for bad debts

A company has $150,000 of credit sales during the year and estimates that $1,000 of its accounts receivable will be uncollectible. The adjusting entry will include a credit to:

allowance for doubtful accounts

Avia Company determines that a customer balance of $400 from Allia, Inc. is uncollectible. Avia uses the allowance method to account for bad debts. The entry to write off the uncollectible balance will include a debit to:

allowance for doubtful accounts

To record a customer's check in full payment for a sale that was made the prior month, the company should debit the ____________ account. Multiple choice question.

cash

The allowance for doubtful accounts is a(n) (current/contra/opposite) _______ asset account and has a normal credit balance.

contra

sold 5850 of merchandise (cost 3800) customers who used their access cards. access charges a 2% fee

credit cash 5733 credit credit card exp 117 debit sales 5850

sold 6,900 of merchandise (cost 4,200) to customer who use credit cards. visa charges 3% fee

credit cash 6693 credit credit card fee 207 debit sales 6900 credit COGS 4200 inventory 4200

On March 14, Ian Co. accepted a 180-day, 5% note in the amount of $1,000 from Ali Co., a customer. On the due date of the note, Ali dishonors the note. The journal entry that Ian would record on the due date would include a: (Check all that apply.)

credit to Notes Receivable for $1,000. debit to Accounts Receivable - Ali for $1,025. credit to Interest Revenue for $25.

A company estimates that $1,000 of its accounts receivable is uncollectible at the end of the period and will make the following adjusting entry:

credit to allowance for doubtful accounts debit to bad debts expense for 1,000

A. Stine Co. previously wrote off a $200 bad debt from Thorn Co. using the direct write-off method. On October 1, Stine unexpectedly receives a check in the amount of $200 from Thorn Co. The entry to record this receipt of $200 will include a:

credit to bad debts expense debit to cash

sold 650 of merchandise on credit (cost 400) to natara, terms n/15

debit accounts receivable 650 credit sales 650 debit COGS 400 credit merchandise inventory 400

The ____________ method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible. No attempt is made to predict bad debts expense.

direct write off

On March 14, Teal Co. accepted a 120-day, 6% note in the amount of $10,000 from AZC Co., a customer. On the due date of the note, AZC honors the note and pays in full. The journal entry that Teal would make to record payment of this note would include a credit to:

interest revenue 200

A 90-day note is signed on October 21. The due date of the note is:

jan 19

The allowance for doubtful accounts is a contra asset account that equals:

total uncollectible accounts