chap 9

the entry to write off an account receivable under the allowance method will ____

have no effect on net income

which of the following is true of the balance sheet presentation of the allowance for bad debts?

it is shown as a contra account related to accounts receivable

for a company with significant uncollectible receivables, the direct write off method is unsuitable because ___--

it violates the matching princple

on October 1, 2017, Parkin Inc made a loan to one of its customers. The customer signed a 6 month note for $110,000 at 14%. Calculate the maturity value of the note.

$117,700

calculate the interest on a 90 day, 12% note for $45,00.

$1350

the allowance for bad debts account has a debit balance of $9,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger, the company's management estimates that uncollectible accounts will be $10,000. What will be the amount of the adjustment in the allowance for bad debts account?

$19,000

accounts receivable has a balance of $34,000 and the allowance for bad debts has a credit balance of $3,400. the allowance method is used. what is the net realizable value of accounts receivable before and after a $2,300 account receivable is written off.

$30,600;$30,600

Niagara art is a new business. During its first year of operations, credit sales were $44,000 and collections of credit sales were $33,000. One account, $625 was written off. Management uses the percent of sales method to account for bad debts expense and estimates 2% of credit sales to be uncollectible. bad debts expense for the first year of operations is ______

$880

the allowance for bad debts has a credit balance of $7,500 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging of receivables methods, the company's management estimates that uncolletible accounts will be $17,000. what will be the amount of bad debts expense reported on the income statement?

$9,500

under the direct write off method, the entry to write off an uncollectible account will include _______

a debit to bad debts expense account

which of the following statements regarding notes receivable is incorrect?

all notes receivable are considered long term assets

which of the following statements is true?

notes receivables usually have longer collection terms than accounts receivable

which of the following is an example of exercising internal control over receivables?

separating cash collection and credit approval duties

when a company uses the allowance method to measure bad debts, ___

the amount of bad debts expense is estimated at the end of the accounting period