University:
Eastern Kentucky University
Course:
ACC 200 | Survey of Accounting
Academic year:

2022
Views:

142

Pages:

2
Author:

chondinny0r70

Interest is usually associated with (a) accounts receivable. (b) notes receivable. (c) doubtful accounts. (d) bad debts. Under the allowance method for uncollectible accounts, when a year-end adjustment is made for estimated uncollectible accounts, (a) total assets decrease. (b) total assets are unchanged. (c) net income is unchanged. (d) liabilities decrease. Under the allowance method for uncollectible accounts, Bad Debts Expense is recorded (a) when an individual account is written off. (b) when the amount of loss is known. (c) for an amount that the company estimates as uncollectible. (d) several times during the accounting period. If a company fails to record estimated bad debts expense, then (a) the net realizable value of account receivables is understated. (b) expenses are understated. (c) revenues are understated. (d) the gross amount of account receivables are understated. The collection of an account that had been previously written off under the allowance method for uncollectible accounts (a) increases net income in the period it is collected. (b) decreases net income in the period it is collected. (c) requires a correcting entry for the period in which the account was written off. (d) does not affect net income in the period it is collected. The Allowance for Doubtful Accounts is shown under (a) Expenses on the statement of income. (b) Revenue on the statement of income. (c) Current Liabilities on the statement of financial position. (d) Current Assets on the statement of financial position. Under the allowance method for uncollectible accounts, Bad Debts Expense is recorded (a) in the year after the credit sale is made. (b) in the same year as the credit sale. (c) as each credit sale is made. (d) when an account is written off as uncollectible. An aging of a company's accounts receivable indicates that $11,000 is estimated to be uncollectible. If the Allowance for Doubtful Accounts has a $1,600 debit balance, the adjustment to record bad debts for the period will require a (a) debit to Bad Debts Expense for $12,600. (b) debit to Bad Debts Expense for $11,000. (c) debit to Bad Debts Expense for $9,400. (d) debit to Allowance for Doubtful Accounts for $11,000. Solution: $11,000 + $1,600 = $12,600 Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $10,000. The unadjusted balance for the Allowance for Doubtful Accounts is $1,500 credit. What is the balance in the Allowance for Doubtful Accounts account after adjustment? (a) $11,500 (b) $10,000 (c) $1,500 (d) $7,000 Solution: $8,500 + $1,500 = $10,000 Under the aging of a company's accounts receivable, the uncollectible accounts are estimated to be $10,000. The unadjusted balance for the Allowance for Doubtful Accounts is $1,500 credit. What is the amount of bad debts expense for the year? (a) $11,500 (b) $10,000 (c) $1,500 (d) $8,500 Solution: $10,000 – $1,500 = $8,500