210 smartbook 2

Allowance for Uncollectible Accounts has a credit balance because it is a(n) Blank______ account.

contra asset

The allowance method estimates

uncollectible accounts

direct write off method is used when

uncollectible accounts are not anticipated or are immaterial.

Prime Corp. has an ending balance in the accounts receivable account of $100,000. Prime recorded bad debt expense of $3,000. Prime has an ending balance in the allowance for uncollectible accounts of $7,000. What is the net accounts receivable balance?

93,000

When an account previously written off is collected in full, which is required to ensure the accounting for the complete payment history of the customer?

An entry to reinstate the account receivable and an entry to record payment.

The allowance for uncollectible accounts is a contra account to

accounts recievable

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 a sales

allowance

To record an estimate for future bad debts at the end of the period, an adjustment would be made with a credit to

allowance for uncollectible accounts

A company that expects that some of its customers will not pay the agreed upon sales price must utilize the

allowance method

The account "Allowance for Uncollectible Accounts" normally has a ---- balance

credit

The income statement approach for estimating bad debts uses a percentage of

credit sales

Planters Corp. wrote off a customer's uncollectible account in April. In the following month, Planters collected from the customer in full. The entry to reinstate the account would require a

credit to allowance for uncollected accounts

The journal entry to record bad debt expense includes:

credit to allowance for uncollectible accounts, debit to bad expense

Joyce determines that a customer account of $20,000 should be written off as uncollectible. The write off of the account will include which of the following entries?

debit to allowance for uncollectible accounts, credit to accounts recievable

The Accounts Receivable account is reduced when the seller:

determines that a specific customer account will not be collectible

The formula for calculating interest on a note is

face value x annual rate x fraction of the annual period.

True or false: Accounts receivable not expected to be collected should be counted in the assets of the company until they are later written off.

false

The allowance method is required by

gaap

Where is a note receivable reported in the balance sheet?

in either current or non current assets

The direct write-off method is required for

income tax purposes

Receivables not expected to be collected should

not be counted in assets of the company.

`A formal, signed credit agreement between a lender and a borrower is called a(n) Blank______ by the lender.

note recievable

Raven receives a 3-year note receivable from a customer for goods sold. How should Raven report this note receivable in its financial statements?

as a non current asset

With the allowance method, bad debt expense is recorded

at the end of the period when bad debts are estimated.

Amend Inc. debited Accounts Receivable and credited Allowance for Uncollectible Accounts to reestablish an account previously written off. Amend Inc. should also debit Blank______ and credit Blank______.

cash, accounts recievable

A cash discount representing a reduction in the amount to be paid by a credit customer if the customer pays within a specified period of time is also referred to as

sales discount

When a customer returns a product for a refund, in which account is the entry recorded?

sales return