Question : 139.The general ledger account for Accounts Receivable shows a debit : 1244433

139.The general ledger account for Accounts Receivable shows a debit balance of $25,000. Allowance for Uncollectible Accounts has a credit balance of $1,500. Net sales for the year were $250,000. In the past, 3 percent of net sales have proved uncollectible, and an aging of accounts receivable resulted in an estimate of $10,000 in uncollectible accounts receivable.

 

Using the accounts receivable aging method, the Uncollectible Accounts Expense would be debited for

 

a.

$8,500.

b.

$11,500.

c.

$10,750.

d.

$10,000.

 

 

 

140.The general ledger account for Accounts Receivable shows a debit balance of $25,000. Allowance for Uncollectible Accounts has a credit balance of $1,500. Net sales for the year were $250,000. In the past, 3 percent of net sales have proved uncollectible, and an aging of accounts receivable resulted in an estimate of $10,000 in uncollectible accounts receivable.

 

Using the accounts receivable aging method, the Allowance for Uncollectible Accounts balance (after adjustment) would be

 

a.

$11,500.

b.

$10,000.

c.

$8,500.

d.

$10,750.

 

 

 

141.You have just received notice that Agnes Fisher, a customer of yours with an Accounts Receivable balance of $200, has gone bankrupt and will not be making any future payments. Assuming you use the allowance method, the entry you make is to

 

a.

debit Allowance for Uncollectible Accounts and credit Accounts Receivable.

b.

debit Uncollectible Accounts Expense and credit Allowance for Uncollectible Accounts.

c.

debit Uncollectible Accounts Expense and credit Accounts Receivable.

d.

debit Allowance for Uncollectible Accounts and credit Uncollectible Accounts Expense.

 

 

 

142.Under the direct charge-off method of dealing with uncollectible accounts,

 

a.

uncollectible accounts expense is recorded in the period of the sale.

b.

Accounts Receivable is shown on the balance sheet at net realizable value.

c.

revenues and expenses are properly matched.

d.

no Allowance for Uncollectible Accounts account exists.

 

 

 

143.If the amount of uncollectible accounts expense is understated at year end,

 

a.

net income will be understated.

b.

Allowance for Uncollectible Accounts will be understated.

c.

total liabilities will be overstated.

d.

net Accounts Receivable will be understated.

 

 

 

144.Each of the following is a characteristic of a promissory note except a(n)

 

a.

payee who has an unconditional right to receive a definite amount on a definite date.

b.

maturity date that can be determined on the date the note is signed.

c.

maker who agrees to pay a definite sum subject to certain conditions.

d.

amount to be paid that can be determined on the date the note is signed.

 

 

 

145.Which of the following statements is false regarding promissory notes?

 

a.

They can be resold to banks.

b.

They are often received upon the sale of machinery and automobiles.

c.

They must be held by the maker until maturity.

d.

They are sometimes used to extend past-due accounts.

 

 

 

146.A note receivable dated May 23 and due in 90 days would be due on

 

a.

August 20.

b.

August 21.

c.

August 23.

d.

August 22.

 

 

 

147.The interest on a three-month, 12 percent, $8,800 note receivable is

 

a.

$176.

b.

$264.

c.

$88.

d.

$1,056.

 

 

 

148.The maturity value of a 60-day, 9 percent, $2,000 note receivable is

 

a.

$2,180.12.

b.

$1,820.89.

c.

$2,029.59.

d.

$1,970.33.

 

 

 

149.Interest on a 90-day, 10 percent, $10,000 note receivable is

 

a.

$246.58.

b.

$288.38.

c.

$1,000.63.

d.

$2,500.77.

 

 

 

150.Interest on a note receivable may be calculated without knowledge of the

 

a.

note’s duration.

b.

note’s maturity date.

c.

rate of interest.

d.

principal amount.

 

 

 

151.The entry made by the holder of a promissory note to record accrued interest would include which of the following accounts?

 

a.

Interest Expense

b.

Notes Receivable

c.

Interest Receivable

d.

Cash