Question :
81. Newton Company uses the allowance method of accounting for uncollectible : 1256917
81. Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Best. On July 10, the entry or entries Newton makes to record the recovery of the bad debt is:
A.
Accounts Receivable – P. Best
3,000
Allowance for Doubtful Accounts
3,000
Cash
3,000
Accounts Receivable – P. Best
3,000
B.
Cash
3,000
Bad Debts Expense
3,000
C.
Accounts Receivable – P. Best
3,000
Bad Debts Expense
3,000
Cash
3,000
Accounts Receivable – P. Best
3,000
D.
Allowance for Doubtful Accounts
3,000
Accounts Receivable – P. Best
3,000
Accounts Receivable – P. Best
3,000
Cash
3,000
E.
Cash
3,000
Accounts Receivable – P. Best
3,000
82. According to GAAP, the amount of bad debt expense can be estimated by:
A. Only the percent of sales method.
B. Only the percent of accounts receivable method.
C. Only by the aging of accounts receivable method.
D. Only by the percent of sales method or the percent of accounts receivable method.
E. Bad debt expense can be estimated by the percent of sales method, the percent of accounts receivable method, or by the aging of accounts receivable method.
83. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:
A. Direct write-off method.
B. Aging of accounts receivable method.
C. Percent of sales method.
D. Aging of investments method.
E. Percent of accounts receivable method.
84. An accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period of the sales and (2) reports accounts receivable at the amount of cash to be collected is the:
A. Allowance method of accounting for bad debts.
B. Aging of notes receivable.
C. Adjustment method for uncollectible debts.
D. Direct write-off method of accounting for bad debts.
E. Cash basis method of accounting for bad debts.
85. On December 31 of the current year, a company’s unadjusted trial balance included the following: Accounts Receivable, debit balance of $97,250; Allowance for Doubtful Accounts, credit balance of $951. What amount should be debited to Bad Debts Expense, assuming 6% of outstanding accounts receivable at the end of the current year will be uncollectible?
A. $951
B. $3,992
C. $4,884
D. $5,835
E. $6,786
86. On December 31 of the current year, a company’s unadjusted trial balance included the following: Accounts Receivable, debit balance of $88,790; Allowance for Doubtful Accounts, credit balance of $1,245. What amount should be debited to Bad Debts Expense, assuming 4% of outstanding accounts receivable at the end of the current year are considered uncollectible?
A. $1,245.00
B. $3,551.60
C. $4,796.60
D. $2,306.60
E. $87,545.00
87. A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $175. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A.
Bad Debt Expense
15,750
Allowance for Doubtful Accounts
15,750
B.
Bad Debt Expense
15,575
Allowance for Doubtful Accounts
15,575
C.
Bad Debt Expense
15,925
Allowance for Doubtful Accounts
15,925
D.
Accounts Receivable
15,750
Bad Debt Expense
175
Sales
15,925
E.
Accounts Receivable
15,925
Allowance for Doubtful Accounts
15,925
88. A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company’s unadjusted trial balance reported the following selected amounts:
Accounts receivable
$245,000 debit
Allowance for uncollectible accounts
300 credit
Net Sales
900,000 credit
All sales are made on credit. Based on past experience, the company estimates 0.5% of credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
A. $925
B. $1,225
C. $4,200
D. $4,500
E. $45,000
89. A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $39,375 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance of $3,285. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A.
Bad Debt Expense
36,090
Allowance for Doubtful Accounts
36,090
B.
Bad Debt Expense
42,660
Allowance for Doubtful Accounts
42,660
C.
Bad Debt Expense
39,375
Allowance for Doubtful Accounts
39,375
D.
Accounts Receivable
39,375
Bad Debt Expense
3,285
Sales
42,660
E.
Accounts Receivable
36,090
Allowance for Doubtful Accounts
36,090
90. Electron borrowed $75,000 cash from TechCom by signing a promissory note. TechCom’s entry to record the transaction should include a:
A. Debit to Notes Receivable for $75,000.
B. Debit to Accounts Receivable for $75,000.
C. Credit to Notes Receivable for $75,000.
D. Debit Notes Payable for $75,000.
E. Credit to Sales for $75,000.
