Question 1

Match the terms with the definitions.
-A concept that requires expenses to be matched with the revenues they helped to produce.

Accepted Answer

The matching principle requires expenses to be matched with the revenues they helped to produce.

Answer: B
 The allowance method is a method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.

Answer: C
 Bad debt expense is the expense related to uncollectible accounts.

Answer: D
 The direct write-off method is a method of accounting for bad debts that involves writing off uncollectible accounts as they become uncollectible.

Answer: F
 Net receivables is the amount of accounts receivable that are expected to be collected.

Answer: G
 The percentage of receivables method is a method of accounting for bad debts that involves estimating uncollectible accounts based on a percentage of the outstanding accounts receivable.

Answer: H
 The percentage of sales method is a method of accounting for bad debts that involves estimating uncollectible accounts based on a percentage of the sales made during the period.

Question 2

A detailed analysis of the accounts receivable to determine the length of time each account has been outstanding is called

Accepted Answer

Aging the accounts receivable involves analyzing each individual account to determine how long it has been outstanding and classifying it into different categories based on its age. This analysis provides valuable information for managing collections and assessing the overall health of the company's receivables. The other options do not involve a detailed analysis of individual accounts in the same way.

Question 3

Match the terms with the definitions.
-A method in which the current year's uncollectible accounts are estimated based on the relationship between the amount of credit sales and the amount of uncollectible accounts in prior years.

Accepted Answer

The percentage of sales method estimates uncollectible accounts based on a percentage of credit sales, using historical data to determine the relationship between credit sales and uncollectible accounts.

Question 4

Match the terms with the definitions.
-A technique that attempts to recognize bad debt expense in the same period that the related credit sales are made.

Accepted Answer

The allowance method is a technique that estimates and matches bad debt expense to the same period as the related credit sales, aligning with the matching principle.

Question 5

Match the terms with the definitions.
-A method in which the current year's uncollectible accounts are estimated based on the relationship between the amount of accounts receivable and the amount of uncollectible accounts in prior years.

Accepted Answer

The percentage of receivables method estimates uncollectible accounts based on the historical relationship between accounts receivable and uncollectible accounts.

Question 6

After aging the accounts receivable, it is estimated that $700 will not be collected and the allowance account has an existing credit balance of $100. The adjusting entry under the aging approach would be for the amount of

Accepted Answer

The aging approach involves estimating the amount of uncollectible accounts based on the age of the receivables. In this case, $700 is estimated to be uncollectible after aging the accounts receivable.

However, there is also an existing credit balance of $100 in the allowance account, which means that $100 has already been set aside for uncollectible accounts. Therefore, the adjusting entry would only need to account for the remaining estimated amount of uncollectible accounts, which is $600 ($700 - $100).

So the adjusting entry under the aging approach would be a debit to the allowance for doubtful accounts account for $600, and a credit to the bad debt expense account for $600. Therefore, the answer is B.

Question 7

Texas Roundup uses the direct write-off method in accounting for uncollectible accounts.  ​
Required:
Record the above transactions in general journal form.

Accepted Answer

The answer of Texas Roundup uses the direct write-off method...

Question 8

Supreme Carpet Care estimates the amount of uncollectible accounts using the percentage of receivables method. After aging the accounts, it is estimated that $7,225 will not be collecteD.​
​
Required:
Give the end-of-period adjusting entry at December 31 in general journal form to enter the estimate for bad debt expense assuming the allowance for bad debts account has a debit balance of $420 before adjustment.

Accepted Answer

The answer of Supreme Carpet Care estimates the amount of...

Question 9

Jill's Wholesale House uses the direct write-off method in accounting for uncollectible accounts. Record the following transactions in general journal form.

Accepted Answer

The answer of Jill's Wholesale House uses the direct write-off...

Question 10

Match the terms with the definitions.
-A loss from failure to collect an account receivable.

Accepted Answer

A loss from failure to collect an account receivable is referred to as bad debt expense.

Answer: A
 Aging the receivables is a method of analyzing accounts receivable according to the number of days outstanding in order to estimate the likelihood of collection.

Answer: F
 Net receivables represent the amount of accounts receivable that is expected to be collected, less any estimated amounts for bad debt.

Answer: G
 The percentage of receivables method is a way of estimating bad debt expense by taking a percentage of the ending balance in accounts receivable.

Answer: H
 The percentage of sales method is a way of estimating bad debt expense by taking a percentage of the total credit sales made during the period.

Answer: B
 The allowance method is a method of accounting for bad debt expense that involves estimating the amount of accounts receivable that are unlikely to be collected and creating an allowance account to reduce the balance of accounts receivable.

Answer: D
 The direct write-off method is a method of accounting for bad debt expense that involves writing off the uncollectible balance of an account receivable when it is determined to be uncollectible.

Answer: E
 The matching principle requires that expenses be recognized in the same period as the revenue they helped to generate. In the case of bad debt expense, this means recognizing the expense in the period in which the related credit sales were made.

Question 11

Under the direct write-off method, when an account receivable is written off in one accounting period and is collected in the following accounting period, which of the following would be included in the journal entry?

Accepted Answer

When an account previously written off is collected, the entry to reinstate the receivable involves debiting Accounts Receivable and crediting Bad Debt Expense. Then, when cash is collected, debit Cash and credit Accounts Receivable.

Question 12

Match the terms with the definitions.
-A method in which the bad debt expense is not recognized until it has been determined that an account is uncollectible.

Accepted Answer

The direct write-off method records bad debt expense only when an account is determined to be uncollectible.

Question 13

When all of the cash for an account previously written off under the direct write-off method is unexpectedly collected, the correct entry is

Accepted Answer

The answer of When all of the cash for an...

Question 14

The following account balances are those of Music Land Supply Company as of December 31, the end of the fiscal year, before adjustments.  ​
Required:
Prepare the necessary adjusting entry to record Bad Debt Expense in each of the following independent cases. 
a.
Uncollectible accounts are estimated at 1.5% of credit sales.
b.
An aging of the accounts receivable indicates that $6,850 will not be collected.
c.
Assume the same facts in (b), except that the balance in Allowance for Bad Debts is a $420 debit before the adjustment.
d.
Assume the same facts as in (a), except that the balance in Allowance for Bad Debts is a $350 debit before the adjustment.

Accepted Answer

The answer of The following account balances are those of...

Question 15

Match the terms with the definitions.
-The process of estimating the uncollectible amount by analyzing account balances according to the length of time the accounts have been outstanding.

Accepted Answer

Aging the receivables is the process of estimating the uncollectible amount by analyzing account balances according to the length of time the accounts have been outstanding.

Answer: B 
 The allowance method is a method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.

Answer: C 
 Bad debt expense is an expense that results from an estimate of the amount of accounts receivable that will not be collected.

Answer: D 
 The direct write-off method is a method of accounting for bad debts that involves writing off uncollectible accounts as they become uncollectible.

Answer: F 
 Net receivables is the amount of accounts receivable that will be collected after deducting estimated uncollectible accounts.

Answer: G 
 The percentage of receivables method is a method of estimating uncollectible accounts that involves determining the percentage of accounts receivable that are not expected to be collected.

Answer: H 
 The percentage of sales method is a method of estimating bad debt expense that involves applying a percentage to credit sales to estimate the amount of accounts receivable that will not be collected.

Question 16

The direct write-off method is

Accepted Answer

The direct write-off method is required for income tax purposes, but it is not acceptable under generally accepted accounting principles (GAAP) for financial reporting because it does not match expenses with revenues.

Question 17

Match the terms with the definitions.
-The amount a business expects to collect from its accounts receivable; calculated as Accounts Receivable less Allowance for Bad Debts.

Accepted Answer

Net receivables are the amount a business expects to collect from its accounts receivable, calculated as accounts receivable less allowance for bad debts.

Answer: B
 The allowance method is a method of accounting for bad debts where businesses estimate the amount of bad debt expense based on an aging of the receivables, and create an allowance account to reduce the value of accounts receivable to their estimated net realizable value.

Answer: C
 Bad debt expense is the amount of expense recognized for accounts receivable that are expected to be uncollectible.

Answer: D
 The direct write-off method is a method of accounting for bad debts where businesses recognize bad debt expense only when accounts receivable actually become uncollectible.

Answer: E
 Matching principle is an accounting principle that requires businesses to recognize expenses in the same period as the revenues they help to generate.

Answer: A
 Aging the receivables is a method of estimating the allowance for bad debts that involves analyzing accounts receivable by how long they have been outstanding.

Answer: G
 The percentage of receivables method is a method of estimating the allowance for bad debts by applying a percentage to the amount of accounts receivable.

Answer: H
 The percentage of sales method is a method of estimating the bad debt expense by applying a percentage to the amount of credit sales during the period.

Quiz 16: Accounting for Accounts Receivable

Match the terms with the definitions. -A concept that requires expenses to be matched with the revenues they helped to produce.

A detailed analysis of the accounts receivable to determine the length of time each account has been outstanding is called

Match the terms with the definitions. -A method in which the current year's uncollectible accounts are estimated based on the relationship between the amount of credit sales and the amount of uncollectible accounts in prior years.

Match the terms with the definitions. -A technique that attempts to recognize bad debt expense in the same period that the related credit sales are made.

Match the terms with the definitions. -A method in which the current year's uncollectible accounts are estimated based on the relationship between the amount of accounts receivable and the amount of uncollectible accounts in prior years.

After aging the accounts receivable, it is estimated that $700 will not be collected and the allowance account has an existing credit balance of $100. The adjusting entry under the aging approach would be for the amount of

Texas Roundup uses the direct write-off method in accounting for uncollectible accounts. Required: Record the above transactions in general journal form.

Jill's Wholesale House uses the direct write-off method in accounting for uncollectible accounts. Record the following transactions in general journal form.

Match the terms with the definitions. -A loss from failure to collect an account receivable.

Under the direct write-off method, when an account receivable is written off in one accounting period and is collected in the following accounting period, which of the following would be included in the journal entry?

Match the terms with the definitions. -A method in which the bad debt expense is not recognized until it has been determined that an account is uncollectible.

When all of the cash for an account previously written off under the direct write-off method is unexpectedly collected, the correct entry is

Match the terms with the definitions. -The process of estimating the uncollectible amount by analyzing account balances according to the length of time the accounts have been outstanding.

The direct write-off method is

Match the terms with the definitions. -The amount a business expects to collect from its accounts receivable; calculated as Accounts Receivable less Allowance for Bad Debts.

Quiz 16: Accounting for Accounts Receivable

Match the terms with the definitions. -A concept that requires expenses to be matched with the revenues they helped to produce.

A detailed analysis of the accounts receivable to determine the length of time each account has been outstanding is called

Match the terms with the definitions. -A method in which the current year's uncollectible accounts are estimated based on the relationship between the amount of credit sales and the amount of uncollectible accounts in prior years.

Match the terms with the definitions. -A technique that attempts to recognize bad debt expense in the same period that the related credit sales are made.

Match the terms with the definitions. -A method in which the current year's uncollectible accounts are estimated based on the relationship between the amount of accounts receivable and the amount of uncollectible accounts in prior years.

After aging the accounts receivable, it is estimated that $700 will not be collected and the allowance account has an existing credit balance of $100. The adjusting entry under the aging approach would be for the amount of

Texas Roundup uses the direct write-off method in accounting for uncollectible accounts. ​ Required: Record the above transactions in general journal form.

Jill's Wholesale House uses the direct write-off method in accounting for uncollectible accounts. Record the following transactions in general journal form.

Match the terms with the definitions. -A loss from failure to collect an account receivable.

Under the direct write-off method, when an account receivable is written off in one accounting period and is collected in the following accounting period, which of the following would be included in the journal entry?

Match the terms with the definitions. -A method in which the bad debt expense is not recognized until it has been determined that an account is uncollectible.

When all of the cash for an account previously written off under the direct write-off method is unexpectedly collected, the correct entry is

Match the terms with the definitions. -The process of estimating the uncollectible amount by analyzing account balances according to the length of time the accounts have been outstanding.

The direct write-off method is

Match the terms with the definitions. -The amount a business expects to collect from its accounts receivable; calculated as Accounts Receivable less Allowance for Bad Debts.

Texas Roundup uses the direct write-off method in accounting for uncollectible accounts. Required: Record the above transactions in general journal form.