Question 1

At the end of the current year, Accounts Receivable has a balance of $750,000; Allowance for Doubtful Accounts has a debit balance of $6,200; and sales for the year total $3,500,000. Bad debt expense is estimated at 1/2 of 1% of sales.​
Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,...

Question 2

Discuss the similarities and differences between accounts receivable, notes receivable, and other receivables.

Accepted Answer

The answer of Discuss the similarities and differences between accounts...

Question 3

Discuss the two methods for recording bad debt expense. What type of company uses each method?

Accepted Answer

The answer of Discuss the two methods for recording bad...

Question 4

Match each description to the appropriate term (a-h).
-The dollar amount stated on a promissory note
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

The face amount is the dollar amount stated on a promissory note.

Answer: D 
 Maturity value is the amount a promissory note is worth at the end of its term, including the face amount and any interest earned.

Answer: E
 A dishonored note is a promissory note that has not been paid on its due date.

Answer: F
 The maker is the person or entity who signs a promissory note and agrees to pay back the money borrowed.

Answer: G
 Notes receivable are written promises to receive money, often in the form of promissory notes.

Answer: H
 The interest rate is the percentage charged for borrowing money, typically stated as an annual percentage rate.

Answer: B
 The term is the length of time a promissory note is in effect before it becomes due.

Answer: C
 Interest is a fee charged for borrowing money, typically stated as a percentage of the amount borrowed.

Question 5

Match each description to the appropriate term (a-h).
-The amount due that must be paid at the due date of a note receivable
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

The maturity value of a note receivable includes the face amount plus any interest due at the due date, representing the total amount that must be paid.

Question 6

Match each description to the appropriate term (a-h).
-The party promising to pay a note
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

Maker is the term for the party promising to pay a note.

Question 7

Other than Accounts Receivable and Notes Receivable, name other receivables that might be included in the general ledger.

Accepted Answer

The answer of Other than Accounts Receivable and Notes Receivable,...

Question 8

Match each description to the appropriate term (a-h).
-A formal, written instrument of credit that represents amounts due from customers
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

"Notes receivable" is the term that refers to a formal, written instrument of credit that represents amounts due from customers.

Answer: F
 "Maker" refers to the person or entity that signs the note as the borrower and promises to repay the amount due.

Answer: A
 "Face amount" is the amount stated on the face of the note, which represents the principal amount borrowed.

Answer: D
 "Maturity value" refers to the total amount due on the note at its maturity date, which includes the face amount and any accrued interest.

Answer: H
 "Interest rate" refers to the percentage of the face amount that is charged as interest over the term of the note.

Answer: E
 "Dishonored note" is a note that has been presented for payment and has been refused or rejected by the borrower or maker.

Answer: B
 "Term" refers to the length of time over which the note is due and must be repaid, which is typically stated in months or years.

Question 9

Journalize the following transactions using the allowance method of accounting for uncollectible receivables.​
April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400.​
June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.​
Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment.

Accepted Answer

The answer of Journalize the following transactions using the allowance...

Question 10

Roe's Renovations utilizes the direct write-off method of accounting for uncollectible receivables. On September 15 the company is notified by the attorneys for Jacob Marley that Jacob Marley is bankrupt and no cash is expected in the liquidation. Write off the $675 of accounts receivable due from Jacob Marley.

Accepted Answer

The answer of Roe's Renovations utilizes the direct write-off method...

Question 11

The following journal entries would be used in one of the two methods of accounting for uncollectible receivables. Identify each.(a)Bad Debt Expense
900
Accounts Receivable-Billings
900
(b)Allowance for Doubtful Accounts
900
Accounts Receivable-Grover
900

Accepted Answer

The answer of The following journal entries would be used...

Question 12

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case.(a)Credit balance of $300 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $8,500.(b)Credit balance of $500 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 2% of credit sales, which totaled $1,000,000 for the year.

Accepted Answer

The answer of Determine the amount to be added to...

Question 13

Match each description to the appropriate term (a-h).
-The stated rate charged for using the money of another party
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

Interest rate is the stated rate charged for using the money of another party.

Question 14

Match each description to the appropriate term (a-h).
-The time between the date a note is issued and the due date of the note
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

Term refers to the time between the date a note is issued and the due date of the note.

Question 15

List at least three indicators that a receivable may be uncollectible.

Accepted Answer

The answer of List at least three indicators that a...

Question 16

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables:
Feb. 20 Received $1,000 from Andrew Warren and wrote off the remainder owed of $4,000 as uncollectible.May 10 Reinstated the account of Andrew Warren and received $4,000 cash in full payment.

Accepted Answer

The answer of Journalize the following transactions using the direct...

Question 17

At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $3,500,000. Bad debt expense is estimated at 1/2 of 1% of net sales.​
Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,...

Question 18

Match each description to the appropriate term (a-h).
-A note that is not paid when it is due
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

A note that is not paid when it is due is a dishonored note.

Question 19

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables.​
April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of goods sold is $5,400.​
June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.​
Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment.

Accepted Answer

The answer of Journalize the following transactions using the direct...

Question 20

Match each description to the appropriate term (a-h).
-The amount charged for using the money of another party
A)Face amount
B)Term
C)Interest
D)Maturity value
E)Dishonored note
F)Maker
G)Notes receivable
H)Interest rate

Accepted Answer

Interest is the cost of borrowing money, which is the amount charged by the lender to the borrower for the use of the lender's money.

Quiz 8: Receivables

Discuss the similarities and differences between accounts receivable, notes receivable, and other receivables.

Discuss the two methods for recording bad debt expense. What type of company uses each method?

Match each description to the appropriate term (a-h). -The dollar amount stated on a promissory note A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

Match each description to the appropriate term (a-h). -The amount due that must be paid at the due date of a note receivable A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

Match each description to the appropriate term (a-h). -The party promising to pay a note A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

Other than Accounts Receivable and Notes Receivable, name other receivables that might be included in the general ledger.

Match each description to the appropriate term (a-h). -A formal, written instrument of credit that represents amounts due from customers A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

The following journal entries would be used in one of the two methods of accounting for uncollectible receivables. Identify each.(a)Bad Debt Expense 900 Accounts Receivable-Billings 900 (b)Allowance for Doubtful Accounts 900 Accounts Receivable-Grover 900

Match each description to the appropriate term (a-h). -The stated rate charged for using the money of another party A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

Match each description to the appropriate term (a-h). -The time between the date a note is issued and the due date of the note A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

List at least three indicators that a receivable may be uncollectible.

Match each description to the appropriate term (a-h). -A note that is not paid when it is due A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate

Match each description to the appropriate term (a-h). -The amount charged for using the money of another party A)Face amount B)Term C)Interest D)Maturity value E)Dishonored note F)Maker G)Notes receivable H)Interest rate