Accounting II Chapter 6 Test A

False

2 methods used to estimate uncollectible accounts expense are the percentage of sales method and the percentage of uncollectible accounts receivable method

7.8

A company's average number of days for payment is 47. Its accounts receivable turnover ratio (rounded to the nearest .1) is..

True

An accounts recievable turnover ratio that increases from 6.5 to 7.5 is a positive trend

False

Analyzing accounts receivable according to when they are due is known as aging net sales

True

Applying the matching Expenses with Revenue concept, uncollectible accounts expense should be recorded in the same fiscal period in which the sales revenue is earned

a debit to Uncollectible Accounts Expense and a credit to Accounts Receivable

B&T Company wrote off the $800 past-due account of Emily Rosan. Using the direct write off method, the entry in the general journal includes...

True

Canceling the balance of a customer account because the customer is not expected to pay is known as writing off an account

43 days

Holt Co. has terms of 2/10, n/30. Its accounts receivable turnover ratio is 8.5. The average number of days for payment is (rounded to the nearest day)

False

If a business carefully checks credit ratings before granting credit to customers, the business will not experience any uncollectible accounts

2%

Lanna Arts had $300,000 in net sales for the year. Its adjusting entry for estimated uncollectible accounts expense was $6000. What is the percentage of net sales that is estimated to become uncollectible?

False

Morton Inc estimates that 1% of its net sales will become uncollectible. The adjustment is made by debiting Uncollectible Accounts Expense and crediting Accounts Receivable.

True

The accounts receivable turnover ratio is a measure of collection efficiency

a debit to Uncollectible Accounts Expense and a credit to Allowance for Uncollectible Accounts

The adjusting entry to record the estimated uncollectible accounts expense using the percentage of sales method is

$65000

The beginning book value of accounts receivable was $60,000. The ending book value of accounts receivable is $70,000. The average book value of accounts receivable is...

$630 credit

The credit balance in Allowance for Uncollectible Accounts is $41. The estimated uncollectible accounts expense using the percentage of accounts receivable method is $630. After the adjusting entry has been recorded, the balance in Allowance for Uncollectible Accounts will be a...

$4,400 credit

The debit balance in Allowance for Uncollectible Accounts is $200. Based on an aging of accounts recievable, the company expects that $4,200 of accounts receivable will become uncollectible. The amount of the adjusting entry to Allowance for Uncollectible Accounts will be a...

True

The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts, is the book value of accounts receivable

True

The larger the accounts receivable turnover ratio, the fewer the average number of days for payment

False

Using the direct write-off method, no attempt is made to collect accounts that have been written off because the account no longer appears in the accounting records of the business

True

When collection is made on an account that has been written off, 2 journal entries are made. One reopens the customer's account, and the other records keep the receipt of cash

False

When customers receive notices that their accounts have been written off, they no longer owe on the accounts recievable.

False

recording uncollectible accounts expense at the time the amount is actually known to be uncollectible is called the allowance method of recording losses from uncollectible accounts

True

regardless of whether a business uses the direct write-off or allowance method, accounts recievable should be reported on the balance sheet at net realizable value

cash receipts and general

the collection of a write-off account involves entries in what 2 journals?

reopen the accounts receivable

the first step in recording the collection of an account that has been written off is to...