FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Accounting for Receivables

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Hailey Medical Supply Co., which had no beginning balance in its Accounts Receivable and Allowance for Doubtful Accounts, earned $80,000 of revenue on account during 2013. During 2013, Hailey collected $64,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 1% of revenue on account. The amount of net realizable value of receivables on the December 31, 2013 balance sheet would be:

A) $15,360.
B) $15,200.
C) $16,000.
D) $15,000.

E) A) and D)
F) B) and C)

Correct Answer

verified

Show Answer

Question 62

True/False

Review LaterAdd Note

Review Later

When an uncollectible account receivable is written off, the amount of total assets is unchanged.

A) True
B) False

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

Assume that the Lindley Corporation uses the direct write-off method of accounting for uncollectible accounts. Which of the following answers correctly describes the effect of the write-off of the customer's account on Lindley's financial statements?

Chancellor Company began 2013 with balances in accounts receivable and allowance for doubtful accounts of $88,600 and $3,350, respectively. The company reported credit sales of $980,500 during the year, and wrote off $2,800 of uncollectible accounts. Chancellor Company prepared the following aging schedule on December 31, 2013: Required: a) Prepare general journal entries to record the 2013 credit sales, collection of accounts receivable, write-off of uncollectible accounts, and estimate of uncollectible accounts. b) What is Chancellor Company's net realizable value of receivables after all of the above entries have been made?

The amount of uncollectible accounts expense recognized in the 2013 income statement will be:

What does the accounts receivable turnover ratio measure?

On September 14, 2013, Style Shoe Store sold $15,500 of merchandise and accepted credit cards as payment. Style electronically transmitted the credit card forms to the credit card company which charges a 3% fee to handle such transactions. On September 18, 2013, Style received the proceeds from the card company. Required: a) Prepare the journal entry to record the sale of the merchandise on 9/14/13. b) Prepare the journal entry to record the receipt of the check on 9/18/13. c) Prepare the operating activities section of the statement of cash flows for 2013.

For a company that uses the allowance method, the write-off of an uncollectible account receivable is an asset use transaction.

What type of transaction is the write-off of an uncollectible account using the allowance method? (asset source, asset use, asset exchange, or claims exchange)

What is meant by the net realizable value for accounts receivable?

Why would cash sales companies, such as Wendy's, Domino's, and Krispy Kreme have accounts receivables on their financial statements?

On June 1, 2013, Cho Company collected a $12,000 note receivable that had been issued on June 1, 2012. The note carried a 6% interest rate. The interest revenue recognized on the maturity date is $720.

A firm's operating cycle can be determined by:

Foreman Co. uses the allowance method to account for uncollectible accounts expense. On June 20, 2013, Foreman wrote-off an uncollectible account in the amount of $3,000. On September 1, 2013, the account was collected. How would the appropriate entries on September 1 affect the financial statements?

Valley Services Company loaned $12,000 on August 1, 2013 to an individual who issued Valley a promissory note with 6% interest. The issuer of the note repaid the principal and interest on July 30, 2014. How did the August 2013 event affect Valley's statement of cash flows? How did the July 2014 event affect it?

The following information is taken from the adjusted trial balance of the Angie's Art Supply Company on 12/31/13: Angie's Art Supply offers all of its charge customers the credit terms, 2/10, n/30. Required: a) Compute accounts receivable turnover. b) Compute the average number of days to collect accounts receivable. c) Comment on the meaning of these ratios and specifically on how well this firm is managing its accounts receivable.

What is aging of accounts receivable, and how is it used to account for uncollectible accounts?

On September 1, 2013, Ruiz Company loaned $10,000 to Alpha Company. Show the effect of the December 31, 2013 adjusting entry to accrue interest on Ruiz's financial statements.

Bagby Company loaned Jensen Corporation $9,000 on October 1, 2013. The 8-month note carried a 6% rate of interest. Required: a) How will Bagby report the note and interest on its 2013 income statement, balance sheet, and statement of cash flows? b) How will Bagby report the note and interest on its 2014 income statement and statement of cash flows?

Which of the following reflects the effect of the year-end adjusting entry to record estimated uncollectible accounts expense?