Question : 31) To record estimated bad debts under the direct write-off : 1230159

 

31) To record estimated bad debts under the direct write-off method:

A) debit Allowance for Uncollectible Accounts and credit Accounts Receivable.

B) debit Accounts Receivable and credit Allowance for Uncollectible Accounts.

C) debit Uncollectible-Accounts Expense and credit Allowance for Uncollectible Accounts.

D) no journal entry is needed.

 

32) Which of the following is NOT true regarding cash collections from customers?

A) Most companies have a time lag between earning the revenue and collecting the cash.

B) Collections from customers are the single most important source of cash for any business.

C) A company’s collections from customers can be computed by analyzing their Accounts Receivable account.

D) Cash collections from customers will be a debit to Accounts Receivable account.

 

33) The direct write-off method records uncollectible-account expense:

A) at the end of the year.

B) at the end of the accounting period.

C) when the specific account receivable is determined to be uncollectible.

D) under the percent-of-sale method.

 

34) The allowance method records uncollectible-account expense:

A) at the end of the year.

B) at the end of the accounting period.

C) when the specific account receivable is determined to be uncollectible.

D) under the percent-of-sale method.

 

35) The balance in the allowance for uncollectible accounts is considered prior to the year-end adjustment under:

A) the direct write-off method.

B) the percent-of-sales method.

C) the aging-of- receivables method.

D) both the percent-of-sales and aging-of- receivables method.

 

36) Under the allowance method, the entry to write off a $2,600 uncollectible account includes a:

A) debit to Accounts Receivable for $2,600.

B) credit to Uncollectible-Account Expense for $2,600.

C) credit to Allowance for Uncollectible Accounts for $2,600.

D) debit to Allowance for Uncollectible Accounts for $2,600.

 

37) A company makes a journal entry to debit Uncollectible-Account Expense and credit Accounts Receivable. This entry indicates that they are using the ________ method.

A) allowance

B) aging-of-receivables

C) percent-of-sales

D) direct write-off

 

38) A year-end review of Accounts Receivable and estimated uncollectible percentages revealed the following:

 

1-30 days

$60,000

1%

31-60 days

$40,000

3%

61-90 days

$20,000

10%

Over 90 days

$5,000

50%

 

The credit balance in Allowance for Uncollectible Accounts was $1,000. Under the aging-of-receivables method, the uncollectible-account expense for the year is:

A) $1,500.

B) $4,100.

C) $5,300.

D) $6,300.

39) A year-end review of Accounts Receivable and estimated uncollectible percentages revealed the following:

 

1-30 days

$60,000

1%

31-60 days

$40,000

3%

61-90 days

$20,000

10%

Over 90 days

$5,000

50%

 

The credit balance in Allowance for Uncollectible Accounts was $5,700. Under aging-of-receivables method, the balance in the Allowance for Uncollectible Accounts will be ________ after the adjusting entry is made.

A) $1,500

B) $4,100

C) $5,300

D) $6,300

 

40) An aging-of-accounts-receivable indicates that the amount of uncollectible accounts is $3,210. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $2,000. The amount of the adjusting entry should be for:

A) $1,210.

B) $2,000.

C) $3,210.

D) $5,210.