Question : 119.The matching rule relates to credit losses by stating that : 1244431

119.The matching rule relates to credit losses by stating that Uncollectible Accounts Expense should be recorded

 

a.

for an exact amount.

b.

in the period of the loss.

c.

in the period of the sale.

d.

in the same period as allowed for tax purposes.

 

 

 

120.Which of the following account names should not be used in modern practice?

 

a.

Allowance for Bad Debts

b.

Uncollectible Accounts Expense

c.

Reserve for Bad Debts

d.

Allowance for Doubtful Accounts

 

 

 

121.Which of the following methods of recording uncollectible accounts expense would be described best as an income statement method?

 

a.

Accounts receivable aging method

b.

Percentage of net sales method

c.

Both direct charge-off method and accounts receivable aging method

d.

Direct charge-off method

 

 

 

122.Use this information to answer the following question.

 

The general ledger account for Accounts Receivable shows a debit balance of $50,000. Allowance for Uncollectible Accounts has a credit balance of $1,000. Net sales for the year were $485,000. In the past, 2 percent of net sales have proved uncollectible, and an aging of accounts receivable accounts results in an estimate of $13,500 in uncollectible accounts.

 

Using the percentage of net sales method, Uncollectible Accounts Expense would be debited for

 

a.

$10,700.

b.

$8,700.

c.

$1,000.

d.

$9,700.

 

 

 

 

 

 

 

123.Use this information to answer the following question.

 

The general ledger account for Accounts Receivable shows a debit balance of $50,000. Allowance for Uncollectible Accounts has a credit balance of $1,000. Net sales for the year were $478,000. In the past, 2 percent of net sales have proved uncollectible, and an aging of accounts receivable accounts results in an estimate of $13,500 in uncollectible accounts.

 

Using the percentage of net sales method, the Allowance for Uncollectible Accounts balance (after adjustment) would be

 

a.

$1,000.

b.

$9,560.

c.

$8,560.

d.

$10,560.

 

 

 

124.Use this information to answer the following question.

 

The general ledger account for Accounts Receivable shows a debit balance of $50,000. Allowance for Uncollectible Accounts has a credit balance of $1,000. Net sales for the year were $500,000. In the past, 2 percent of net sales have proved uncollectible, and an aging of accounts receivable accounts results in an estimate of $14,400 in uncollectible accounts.

 

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

 

a.

$14,400.

b.

$14,900.

c.

$15,400.

d.

$13,400.

 

 

 

125.Use this information to answer the following question.

 

The general ledger account for Accounts Receivable shows a debit balance of $50,000. Allowance for Uncollectible Accounts has a credit balance of $1,000. Net sales for the year were $500,000. In the past, 2 percent of net sales have proved uncollectible, and an aging of accounts receivable accounts results in an estimate of $13,500 in uncollectible accounts.

 

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

 

a.

$13,500.

b.

$14,000.

c.

$14,500.

d.

$12,500.

 

 

 

126.Which of the following methods of recording uncollectible accounts expense would be described best as a balance sheet method?

 

a.

Percentage of net sales method

b.

Direct charge-off method

c.

Accounts receivable aging method

d.

Both percentage of net sales method and direct charge-off method

 

 

 

127.The balance in Allowance for Uncollectible Accounts must be considered prior to end-of-period adjustment when using which of the following methods?

 

a.

Both direct charge-off method and percentage of net sales method

b.

Direct charge-off method

c.

Accounts receivable aging method

d.

Percentage of net sales method

 

 

 

128.Using the percentage of net sales method, uncollectible accounts expense for the year is estimated to be $54,000. If the balance of the Allowance for Uncollectible Accounts is an $18,000 credit before adjustment, what is the balance after adjustment?

 

a.

$54,000

b.

$72,000

c.

$18,000

d.

$38,000