Question :
21. A company records a sales return from a credit customer. : 1236171
21. A company records a sales return from a credit customer. Indicate how this transaction would affect the following five financial statement items.
A. Option a
B. Option b
C. Option c
D. Option d
22. Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. The price reduction is an example of a:
A. Sales revenue.
B. Sales discount.
C. Sales return.
D. Sales allowance.
23. Tom’s Textiles shipped the wrong material to a customer, who refused to accept the order. This is an example of a:
A. Sales Revenue.
B. Sales discount.
C. Sales return.
D. Sales allowance.
24. Accounts receivable are normally reported at the:
A. Present value of future cash receipts.
B. Current value plus accrued interest.
C. Expected amount to be received.
D. Current value less expected collection costs.
25. Shupe Inc. estimates uncollectible accounts based on the percentage of accounts receivable. What effect will recording the estimate of uncollectible accounts have on the accounting equation?
A. Increase liabilities and decrease stockholders’ equity
B. Decrease assets and decrease liabilities
C. Decrease assets and decrease stockholders’ equity
D. Increase assets and decrease stockholders’ equity
26. Under the allowance method, which of the following does not change the balance in the
Accounts Receivable account?
A. Returns on credit sales.
B. Collections on customer accounts.
C. Bad debt expense adjustment.
D. Write-offs.
27. At December 31, Gill Co. reported accounts receivable of $238,000 and an allowance for uncollectible accounts of $600 (credit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:
A. $6,540.
B. $7,800.
C. $7,140.
D. $7,740.
28. At December 31, Gill Co. reported accounts receivable of $238,000 and an allowance for uncollectible accounts of $600 (debit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:
A. $6,540.
B. $7,800.
C. $7,140.
D. $7,740.
29. At December 31, Amy Jo’s Appliances had account balances in Accounts Receivable of $311,000 and $970 (credit) in Allowance for Uncollectible Accounts. An analysis of Amy Jo’s December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for the year should be:
A. $6,220.
B. $6,450.
C. $5,250.
D. $7,190.
30. At December 31, Amy Jo’s Appliances had account balances in Accounts Receivable of $311,000 and $970 (debit) in Allowance for Uncollectible Accounts. An analysis of Amy Jo’s December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for the year should be:
A. $6,220.
B. $6,450.
C. $5,250.
D. $7,190.
