Question : 41. Collections of accounts receivable that previously have been written off : 1236173

41. Collections of accounts receivable that previously have been written off are credited to: 
A. A Gain account.
B. Accounts Receivable.
C. Bad Debt Expense.
D. Retained Earnings.

42. Lail Inc. accounts for bad debts using the allowance method. On June 1, Lail Inc. wrote off Andrew Green’s $2,500 account. Based on Lail’s estimation, Andrew Green will never pay any portion of the balance in his account. What effect will this write-off have on Lail Inc.’s balance sheet at the time of the write-off? 
A. An increase to stockholders’ equity and a decrease to liabilities.
B. No effect.
C. An increase to assets and an increase to stockholders’ equity.
D. A decrease to assets and a decrease to stockholders’ equity.

43. When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write off the accounts using the allowance method? 
A. A debit to Bad Debt Expense and a credit to Allowance for Uncollectible Accounts.
B. A debit to Allowance for Uncollectible Accounts and a credit to Bad Debt Expense.
C. A debit to Bad Debt Expense and a credit to Accounts Receivable.
D. A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable.

44. Using the allowance method, writing off an actual bad debts would include a: 
A. Debit to Bad Debt Expense.
B. Credit to Accounts Receivable.
C. Debit to Accounts Receivable.
D. Credit to Allowance for Uncollectible Accounts.

45. At the beginning of 2012, the balance in Jackson Enterprises’ Allowance for Uncollectible Accounts was $31,800. During 2012, the company wrote off $38,000 of accounts receivable. Writing off the individual bad debts would include a: 
A. Debit to Bad Debt Expense.
B. Credit to Accounts Receivable.
C. Credit to the Allowance for Uncollectible Accounts.
D. Both a and c.

46. A company collects an account receivable previously written off. Indicate how this transaction would affect the following five financial statement items:

  
 
A. Option a
B. Option b
C. Option c
D. Option d

47. When using an aging method for estimating uncollectible accounts: 
A. Older accounts are considered less likely to be collected.
B. The number of days the account is past due is not considered.
C. Older accounts are considered more likely to be collected.
D. No estimate of uncollectible accounts is made.

48. Crimson Inc. recorded credit sales of $750,000, of which $600,000 is not yet due, $100,000 is past due for up to 180 days, and $50,000 is past due for more than 180 days. Under the aging of receivables approach, Crimson Inc. expects it will not collect 1% of the amount not yet due, 10% of the amount past due for up to 180 days, and 20% of the amount past due for more than 180 days. The allowance account had a debit balance of $1,000 before adjustment. After adjusting for bad debt expense, what is the ending balance of the allowance account? 
A. $29,000.
B. $28,000.
C. $27,000.
D. $26,000.

49. During 2012, Bears Inc. recorded credit sales of $500,000. Before adjustments at year-end, Bears has accounts receivable of $300,000, of which $50,000 is past due, and the allowance account had a credit balance of $2,500. Using the aging of receivables approach, what would be the adjustment assuming Bears expects it will not to collect 5% of the amount not yet past due and 20% of the amount past due? 
A. 
B. 
C. 
D. 

50. The following information pertains to Lightning, Inc. at the end of December:

Lightning uses the aging method and estimates it will not collect 2% of accounts receivable not yet due, 10% of receivables less than 30 days past due, and 40% of receivables greater than 30 days past due. The accounts receivable balance of $7,000 consists of $3,500 not yet due, $2,000 less than 30 days past due, and $1,500 greater than 30 days past due. What is the appropriate amount of Bad Debt Expense? 
A. $400.
B. $470.
C. $870.
D. $1,270.