chap 5 quiz
payment for credit sales are typically due in ____ to ____ days
30; 60
Raven receives a 3-year note receivable from a customer for goods sold. How should Raven report this note receivable in its financial statements?
a non current asset
Trade receivable is another term for ____ receivable
accounts
The first step in using the percentage-of-receivables approach to estimate bad debts is to calculate the desired ending balance in which account?
allowance for uncollectible accounts
The estimated expense for accounts that may not be collected that is matched against revenue of the period is referred to as
bad debt expense
compared to other methods of estimating uncollectible accounts, the aging of accounts receivables method tends to
be more accurate
Zeigen Inc. debited accounts receivable and credited allowance for doubtful accounts. Zeigen inc. should also debit ____ and credit ____ ____
cash; accounts receivable
A(n) ___ balance before adjustment indicates that the estimate of uncollectible accounts at the beginning of the year may have been too high
credit
the account "Allowance for Uncollectible Accounts" normally has a ___ balance
credit
Sales to customers in which the customers pay within 30 to 60 days are referred to as
credit sales; sales on account
A(n) ___ balance before the adjustment indicates that the estimate of uncollectible accounts at the beginning of the year may have been too low
debit
Glasser Corp. provided $20,000 of services on account. The account that should be credited is ____ ____
service revenue
The allowance method is required consistent under ___
the GAAP
Accounts receivable are classified as current assets because
they will be converted to cash within 1 year or the normal operating cycle
A customer account that is not expected to be collected is referred to as a bad debt or ___ account
uncollectible
The allowance method estimates
uncollectible accounts
notes receivable normally has a(n) ____ balance because it is classified as a(n) _____
debit; asset
The accounts receivable 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 amount x annual rate x fraction of the annual period
When the allowance method is used, the write-off of an uncollectible account
has no effect on net income
accounts receivable are normally classified
in the balance sheet as current assets
When a company has earned interest in the current period but has not yet recorded the interest, what type of adjustment is the company required to make?
make an adjusting entry at the end of the current period to accrue the interest earned
the ____ ___ value of accounts receivable is the amount of cash a company expects to collect
net realizable
a formal credit arrangement between a creditor and a debtor is called a(n)
note receivable
a claim to receive cash in the future is a _____
receivable
Bad debt expense is reported on the ___ ___ and classified as a(n) ____ ____
income statement; operating expense