Accounting 1 Final Review: Concepts

The account Allowance for Uncollectible Accounts is increased by a debit.

False

When the allowance account has a previous credit balance, this previous balance is subtracted from the amount of the adjustment for uncollectible accounts expense.

False

Crediting the estimated value of uncollectible accounts to a contra account is the allowance method of recording losses from uncollectible accounts.

True

Accounts receivable that cannot be collected are called uncollectible accounts.

True

Allowance for Uncollectible Accounts is debited to write off a customer account.

True

Canceling the balance of a customer account because the customer does not pay is called writing off an account.

True

The book value of accounts receivable at year end is an estimate of the amount of accounts receivable the business expects to collect during the next fiscal year.

True

The loss from an uncollectible amount is a regular expense of doing business.

True

Using the percentage of total sales on account to estimate uncollectible accounts expense assumes that a portion of every sale on account dollar will become uncollectible.

True

When a previously written-off account is collected, Accounts Receivable is debited and credited for the amount collected.

True

When the allowance account in the Trial Balance column of a work sheet has a credit balance, the amount of the adjustment is a. added to the trial balance amount b. multiplied by two c. deducted from the trial balance amount d. not recorded

a. Added to the trial balance amount

Information used to journalize an uncollectible expense adjusting entry is obtained from a work sheet's a. Adjustments columns b. Trial Balance column c. Balance Sheet columns d. Income Statement columns

a. Adjustments columns

The loss from an uncollectible account is a. a liability b. a regular expense of doing business c. an asset d. a reduction in revenue

b. A regular expense of doing business

The balance of accounts receivable less the allowance for uncollectible accounts is the formula for calculating a. total collections of previously written-off accounts b. book value of accounts receivable c. the contra account balance to accounts receivable d. uncollectible accounts expense

b. Book value of accounts receivable

The journal entry to write off an account receivable account is debit Allowance for Uncollectible Accounts and credit a. none of these b. Uncollectible Accounts Expense c. Accounts Receivable d. Cash

c. Accounts Receivable

Writing off an account a. increases the balance of Allowance for Uncollectible Accounts b. decreases the balance of Uncollectible Accounts Expense c. decreases the balance of Accounts Receivable d. increases the balance of cash

c. Decreases the balance of Accounts Receivable

The entry to write off an account receivable is recorded in the a. cash receipts journal b. sales journal c. general journal d. cash payments journal

c. General Journal

The entry to journalize the uncollectible accounts expense adjusting entry is debit Uncollectible Accounts Expense and credit a. Cash b. none of these c. Accounts Receivable d. Allowance for Uncollectible Accounts

d. Allowance for Uncollectable Accounts

When uncollectible accounts are estimated, writing off an account a. may increase expenses or decrease revenue b. increases expenses c. increases revenue d. does not change the book value of accounts receivable

d. Does not change the book value of accounts receivable