Chapter 5

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

The account "Allowance for Uncollectible Accounts" is classified as Multiple choice question.

a contra asset to accounts receivable.

A trade discount is

a reduction from list price.

An informal credit arrangement with a customer for payment to be received after the sale is classified as a(n)

account receivable.

The allowance for uncollectible accounts is a contra account to

accounts receivable

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

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

Accounts receivable should be classified as a(n)

asset

A trade discount is a reduction from the list price, which is used to: (Select all that apply.)

change prices without publishing a new catalog correct give quantity discounts to customers correct disguise real prices from competitors

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

contra-asset

The account "Allowance for Uncollectible Accounts" normally has a _________balance.

credit

When a business provides services to a customer, and the customer promises to pay later, this is referred to as

credit sales

The journal entry to record bad debt expense includes: (Select all that apply.)

debit to bad debt expense correct credit to allowance for uncollectible accounts

Under the allowance method, companies estimate Blank______ uncollectible amounts and report those estimates in the Blank______ year. Multiple choice question.

future; current

The allowance method estimates

uncollectible accounts.