Financial Accounting Fundamentals, 7e 答案

  • February 15, 2020

Leo Co. uses the allowance method to account for bad debts. At the end of 2010, Leo Co.’s accounts receivable balance is $25,000; allowance for doubtful accounts balance of $100 (credit); and sales of $500,000. Based on history, Leo estimates that bad debts will be 2% of accounts receivable. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of:

答案: $400

On November 1, Eli Co. received a $6,000, 60-day, 6% note from a customer as payment on his $6,000 account. Eli’s journal entry to record this transaction on November 1, would include a: (Check all that apply.)

答案 :

debit to Notes Receivable for $6,000.

credit to Accounts Receivable for $6,000.

The ______________  of accounts receivable method uses several percentages to estimate the allowance.

答案 : aging

The allowance for doubtful accounts is a(n) (current/contra/opposite) , Correct Unavailable asset account and has a normal credit balance.

A 60-day note is signed on February 15 (and it’s not leap year). The due date of the note is:
答案 : April 16

On January 1, JC Co. accepted a 60-day, 6%, note in the amount of $10,000 from a customer. On March 2, the due date of the note, the customer honors the note and pays in full. The journal entry that JC would make to record the receipt of payment of this note would include debit to:

答案: Cash in the amount of $10,100

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Lion Company accepted a $15,000, 30-day, 6% note on December 16 from Diaz Co, granting a time extension on his past-due account receivable. The adjusting entry on December 31 for Lion Company would include a credit to:
Interest Revenue for $37.50.


Companies sometimes convert receivables to cash before they are due by selling them or using them as security for a loan. The reasons that a company may convert receivables before their due date include: (Check all that apply.)

The ______________  of accounts receivable method uses several percentages to estimate the allowance.

aging

True or False: The direct write-off method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce.FalseFinish Co. uses the allowance method to account for bad debts. At the end of 2010, Finish Co.’s unadjusted trial balance shows an accounts receivable balance of $30,000; allowance for doubtful accounts balance of $200 (credit); and sales of $600,000. Based on history, Finish estimates that bad debts will be 1% of sales. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of:$6,000Companies sometimes convert receivables to cash before they are due by selling them or using them as security for a loan. The reasons that a company may convert receivables before their due date include:- to reduce risk of nonpayment.
– to quickly generate cash.The two most common receivables are ________ receivables and ________ receivables.accounts; notesOn July 10, Yao Co. collects $740 from Ean, Inc. from a prior credit sale. This entry would be recorded by Yao with a: (Check all that apply.)- debit to Cash
– credit to Accounts ReceivableA company sells merchandise to a customer on credit. The journal entry that the company makes to record this sale would include a (debit/credit) to the sales account.creditTo compute interest due on a maturity date, you should multiply which of the following factors?- Principal
– Interest rate
– Time expressed in fraction of yearTrue or False: Accounts receivable are amounts due from customers for credit sales.TrueOn June 30, Nance Company receives a $5,000, 90-day, 4% note from a customer as payment on her account. How much interest will be due on the note’s maturity date?$50A 60-day note is signed on February 15 (and it’s not leap year). The due date of the note is:April 16The (maker/signer) of the note is the one that signed the note and promised to pay at maturity. The (maker/payee) of the note is the person to whom the note is payable.maker; payeeP. Jameson Co. sold $500 of merchandise on Master Card credit sales. The net cash receipts from the same are immediately deposited in the seller’s bank account. Master Card charges a 4% fee. The journal entry to record this sales transaction would include a:- debit to Credit Card Expense for $20.
– debit to Cash for $480.
– credit to Sales for $500.On January 1, JC Co. accepted a 60-day, 6%, note in the amount of $10,000 from a customer. On March 2, the due date of the note, the customer honors the note and pays in full. The journal entry that JC would make to record the receipt of payment of this note would include debit to:Cash in the amount of $10,100Tunes Company determines that a customer balance of $250 from Able Co. is uncollectible. Tunes uses the allowance method to account for bad debts. The entry to write off the uncollectible balance will include a (debit/credit) to the Allowance for Doubtful Accounts.debitOn November 1, Alice Co. accepted a 90-day, 6%, $2,000 note due January 30. On 12/31, the appropriate adjusting entry was made. On January 30, the note was honored and paid in full. The entry to record receipt of payment on January 30 would include a credit to:- Interest Receivable for $20.
– Notes Receivable for $2,000.
– Interest Revenue for $10.An accounts receivable ledger:- is a supplementary record to maintain an account for each customer.
– records journal entries that affect accounts receivable.Simon Co. sold $500 of merchandise on credit cards. The net cash receipts are received 10 days later, less a 2% fee. The entry to record this sales transaction on the date of the sale would include a debit to:Accounts Receivable for $490.The allowance for doubtful accounts is a(n) (current/contra/opposite) asset account and has a normal credit balance.contraOn March 14, Ian Co. accepted a 180-day, 5% note in the amount of $1,000 from Ali Co., a customer. On the due date of the note, Ali dishonors the note and fails to pay. The journal entry that Ian would record on the due date would include a:- credit to Interest Revenue for $25.
– debit to Accounts Receivable – Ali for $1,025.
– credit to Notes Receivable for $1,000.The (allowance/direct write-off) method of accounting for bad debts matches the estimated loss from uncollectible accounts receivables against the sales they helped produce.allowanceIf an account receivable balance previously written off using the direct write-off method is later collected in full, the entry to record the payment must include a credit to:Bad Debts ExpenseOn November 1, Eli Co. received a $6,000, 60-day, 6% note from a customer as payment on his $6,000 account. Eli’s journal entry to record this transaction on November 1, would include a:- credit to Accounts Receivable for $6,000.
– debit to Notes Receivable for $6,000.At period end, Bradon Company estimates that $1,200 of its account receivable balance is uncollectible. Bradon uses the allowance method to account for bad debts. The entry to record this adjusting entry would inclue a (debit/credit) to Allowance for Doubtful Accounts.creditLeo Co. uses the allowance method to account for bad debts. At the end of 2010, Loe Co.’s accounts receivable balance is $25,000; allowance for doubtful accounts balance of $100 (credit); and sales of $500,000. Based on history, Leo estimates that bad debts will be 2% of accounts receivable. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of:$400True or false: The allowance method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible. No attempt is made to predict bad debts.FalseOn February 15, Symth Co. determines that it cannot collect $500 owed by its customer. A. Winds. Smyth records the loss using the direct write-off method. This entry to record the write-off on February 15 would include a:- debit to Bed Debts Expense.
– credit to Accounts Receivable – A. Winds.Flash Co. uses the allowance method to account for bad debts. At the end of 2010, Flash Co.’s unadjusted trial balance shows an accounts receivable balance of $45,000; allowance for doubtful accounts balance of $400 (debit); and sales of $1,500,000. Based on history, Flash estimates that bad debts will be .5% of sales. The entry to record estimated bad debts will include an debit to Bad Debts Expense in the amount of:$7,500Thomas Co. sold $1,000 worth of merchandise on credit cards. The net cash receipts from the sale are received 10 days later, less a 3% fee. the entry to record the sales transaction would include a debit to Accounts Receivable in the amount of $____________.970Lion Company accepted a $15,000, 30-day, 6% note on December 16 from Diaz Co, granting a time extension on his past-due account receivable. The adjusting entry on December 31 for Lion Company would include a credit to:Interest Revenue for $37.50.On September 1, Horn Co. accepted a 60-day, 5% note in the amount of $3,000 from a customer. On the due date of the note, the customer dishonors the note and fails to pay. The journal entry that Horn would make on the due date would include debit to:Accounts Receivable for $3,025.On January 1, Franz Co. accepted a 30-day, 6% note in the amount of $5,000 from Bria Co., a customer. On January 31, the due date of the note, Bria honors the note and pays in full. The journal entry that Franz would make to record payment of this note would include a:- debit to Cash for $5,025.
– credit to Interest Revenue for $25.
– credit to Note Receivable for $5,000.Lani Co. uses the allowance method to account for bad debts. At the end of 2010, their unadjusted trial balance shows an accounts receivable balance of $400,000; allowance for doubtful accounts balance of $400 (debit); and sales of $1,200,000. Based on history, Lani estimates that bad debts will be 1% of accounts receivable. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of:$4,400The principal and interest of a note are due on its maturity date. The maker of the note usually (makes/honors/dishonors) the note and pays it in full.honorsKaiven Company accepted a $12,000, 60-day, 6% note on December 21 from Diaz Co, granting a time extension on his past-due account receivable. The adjusting entry on December 31 would include a debit to:Interest Receivable for $20.Acel Co. uses the allowance method to account for bad debts. Early in 2010, Acel determined that it could not collect $400 from CTR, Inc. and wrote the balance off. On October 21, Acel received a check for $400 from CTR. The entries to record the receipt of cash on October 21 would include a debit to:
Select two answers.- Accounts Receivable.
– Cash.On March 14, Teal Co. accepted a 120-day, 6% note in the amount of $10,000 from AZC Co., a customer. On the due date of the note, AZC honors the note and pays in full. The journal entry that Teal would make to record payment of this note would include a credit to:Interest Revenue for $200.Companies allow customers to pay for products using third-party credit cards because:(All except: there is no cost to the seller to allow third-party credit cards.)Yates Co. uses the allowance method to account for bad debts. At the end of the period, Yate’s unadjusted trial balance shows an accounts receivable balance of $10,000; allowance for doubtful accounts balance of $400 (credit); and sales of $500,000. Based on history, Yates estimates that bad debts will be 1% of sales. The entry to record the estimated bad debts will include a debit to bad debts expense in the amount of:$5,000Bad debts are:- accounts of customers who do not pay.
– an expense of selling on credit.
– also called uncollectible accounts.The direct write-off method records bad debts expense only when an account becomes uncollectible, which is not always in the same period as the sale. For this reason, the direct write-off method violates the ________ principle.matchingThe following financial information is available for Siu Co.
2010
Net Sales – 160,000
Accounts Receivable – 38,000
2009
Net Sales – 155,000
Accounts Receivable – 32,000
Compute accounts receivable turnover for 2010. Round your answer to one decimal place.4.6Avi Co. raises cash by borrowing $10,000 and pledging $12,000 accounts receivable as security for the loan. To comply with the full disclosure principle, Avi will record a journal entry in the amount of the $10,000 note payable, and also record a (debit/credit/footnote) to the financial statements, indicating that $12,000 of accounts receivables have been pledged.footnoteTricon Co. sells $10,000 of its accounts receivables and is charged a 5% factoring fee. It records this sales with a debit to:Cash for $9,500.Conroy Company uses the allowance method to account for bad debts. During 2010, Conroy determined that a balance $200 for Alegia Co. was uncollectible and wrote the balance off. What is the total decrease to net income related to this entry?$0All of the following are similarities in valuing receivables using U.S. GAAP and IFRS except:IFRS does not require the allowance method for uncollectibles.

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ACC2301 – Ch. 9 LS

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MatchGravityTrue or False: The direct write-off method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce.Click card to see definition 👆FalseClick again to see term 👆Finish Co. uses the allowance method to account for bad debts. At the end of 2010, Finish Co.’s unadjusted trial balance shows an accounts receivable balance of $30,000; allowance for doubtful accounts balance of $200 (credit); and sales of $600,000. Based on history, Finish estimates that bad debts will be 1% of sales. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of:Click card to see definition 👆$6,000Click again to see term 👆1/45Created byum28797

OriginalAlphabeticalTrue or False: The direct write-off method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce.FalseFinish Co. uses the allowance method to account for bad debts. At the end of 2010, Finish Co.’s unadjusted trial balance shows an accounts receivable balance of $30,000; allowance for doubtful accounts balance of $200 (credit); and sales of $600,000. Based on history, Finish estimates that bad debts will be 1% of sales. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of:$6,000Companies sometimes convert receivables to cash before they are due by selling them or using them as security for a loan. The reasons that a company may convert receivables before their due date include:– to reduce risk of nonpayment.
– to quickly generate cash.
The two most common receivables are ________ receivables and ________ receivables.accounts; notesOn July 10, Yao Co. collects $740 from Ean, Inc. from a prior credit sale. This entry would be recorded by Yao with a: (Check all that apply.)– debit to Cash
– credit to Accounts Receivable
A company sells merchandise to a customer on credit. The journal entry that the company makes to record this sale would include a (debit/credit) to the sales account.creditTo compute interest due on a maturity date, you should multiply which of the following factors?– Principal
– Interest rate
– Time expressed in fraction of year
True or False: Accounts receivable are amounts due from customers for credit sales.TrueOn June 30, Nance Company receives a $5,000, 90-day, 4% note from a customer as payment on her account. How much interest will be due on the note’s maturity date?$50A 60-day note is signed on February 15 (and it’s not leap year). The due date of the note is:April 16The (maker/signer) of the note is the one that signed the note and promised to pay at maturity. The (maker/payee) of the note is the person to whom the note is payable.maker; payeeP. Jameson Co. sold $500 of merchandise on Master Card credit sales. The net cash receipts from the same are immediately deposited in the seller’s bank account. Master Card charges a 4% fee. The journal entry to record this sales transaction would include a:– debit to Credit Card Expense for $20.
– debit to Cash for $480.
– credit to Sales for $500.
On January 1, JC Co. accepted a 60-day, 6%, note in the amount of $10,000 from a customer. On March 2, the due date of the note, the customer honors the note and pays in full. The journal entry that JC would make to record the receipt of payment of this note would include debit to:Cash in the amount of $10,100Tunes Company determines that a customer balance of $250 from Able Co. is uncollectible. Tunes uses the allowance method to account for bad debts. The entry to write off the uncollectible balance will include a (debit/credit) to the Allowance for Doubtful Accounts.debitOn November 1, Alice Co. accepted a 90-day, 6%, $2,000 note due January 30. On 12/31, the appropriate adjusting entry was made. On January 30, the note was honored and paid in full. The entry to record receipt of payment on January 30 would include a credit to:– Interest Receivable for $20.
– Notes Receivable for $2,000.
– Interest Revenue for $10.
An accounts receivable ledger:– is a supplementary record to maintain an account for each customer.
– records journal entries that affect accounts receivable.
Simon Co. sold $500 of merchandise on credit cards. The net cash receipts are received 10 days later, less a 2% fee. The entry to record this sales transaction on the date of the sale would include a debit to:Accounts Receivable for $490.The allowance for doubtful accounts is a(n) (current/contra/opposite) asset account and has a normal credit balance.contraOn March 14, Ian Co. accepted a 180-day, 5% note in the amount of $1,000 from Ali Co., a customer. On the due date of the note, Ali dishonors the note and fails to pay. The journal entry that Ian would record on the due date would include a:– credit to Interest Revenue for $25.
– debit to Accounts Receivable – Ali for $1,025.
– credit to Notes Receivable for $1,000.
The (allowance/direct write-off) method of accounting for bad debts matches the estimated loss from uncollectible accounts receivables against the sales they helped produce.allowanceIf an account receivable balance previously written off using the direct write-off method is later collected in full, the entry to record the payment must include a credit to:Bad Debts ExpenseOn November 1, Eli Co. received a $6,000, 60-day, 6% note from a customer as payment on his $6,000 account. Eli’s journal entry to record this transaction on November 1, would include a:– credit to Accounts Receivable for $6,000.
– debit to Notes Receivable for $6,000.
At period end, Bradon Company estimates that $1,200 of its account receivable balance is uncollectible. Bradon uses the allowance method to account for bad debts. The entry to record this adjusting entry would inclue a (debit/credit) to Allowance for Doubtful Accounts.creditLeo Co. uses the allowance method to account for bad debts. At the end of 2010, Loe Co.’s accounts receivable balance is $25,000; allowance for doubtful accounts balance of $100 (credit); and sales of $500,000. Based on history, Leo estimates that bad debts will be 2% of accounts receivable. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of:$400True or false: The allowance method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible. No attempt is made to predict bad debts.FalseOn February 15, Symth Co. determines that it cannot collect $500 owed by its customer. A. Winds. Smyth records the loss using the direct write-off method. This entry to record the write-off on February 15 would include a:– debit to Bed Debts Expense.
– credit to Accounts Receivable – A. Winds.
Flash Co. uses the allowance method to account for bad debts. At the end of 2010, Flash Co.’s unadjusted trial balance shows an accounts receivable balance of $45,000; allowance for doubtful accounts balance of $400 (debit); and sales of $1,500,000. Based on history, Flash estimates that bad debts will be .5% of sales. The entry to record estimated bad debts will include an debit to Bad Debts Expense in the amount of:$7,500Thomas Co. sold $1,000 worth of merchandise on credit cards. The net cash receipts from the sale are received 10 days later, less a 3% fee. the entry to record the sales transaction would include a debit to Accounts Receivable in the amount of $____________.970Lion Company accepted a $15,000, 30-day, 6% note on December 16 from Diaz Co, granting a time extension on his past-due account receivable. The adjusting entry on December 31 for Lion Company would include a credit to:Interest Revenue for $37.50.On September 1, Horn Co. accepted a 60-day, 5% note in the amount of $3,000 from a customer. On the due date of the note, the customer dishonors the note and fails to pay. The journal entry that Horn would make on the due date would include debit to:Accounts Receivable for $3,025.On January 1, Franz Co. accepted a 30-day, 6% note in the amount of $5,000 from Bria Co., a customer. On January 31, the due date of the note, Bria honors the note and pays in full. The journal entry that Franz would make to record payment of this note would include a:– debit to Cash for $5,025.
– credit to Interest Revenue for $25.
– credit to Note Receivable for $5,000.
Lani Co. uses the allowance method to account for bad debts. At the end of 2010, their unadjusted trial balance shows an accounts receivable balance of $400,000; allowance for doubtful accounts balance of $400 (debit); and sales of $1,200,000. Based on history, Lani estimates that bad debts will be 1% of accounts receivable. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of:$4,400The principal and interest of a note are due on its maturity date. The maker of the note usually (makes/honors/dishonors) the note and pays it in full.honorsKaiven Company accepted a $12,000, 60-day, 6% note on December 21 from Diaz Co, granting a time extension on his past-due account receivable. The adjusting entry on December 31 would include a debit to:Interest Receivable for $20.Acel Co. uses the allowance method to account for bad debts. Early in 2010, Acel determined that it could not collect $400 from CTR, Inc. and wrote the balance off. On October 21, Acel received a check for $400 from CTR. The entries to record the receipt of cash on October 21 would include a debit to:
Select two answers.– Accounts Receivable.
– Cash.
On March 14, Teal Co. accepted a 120-day, 6% note in the amount of $10,000 from AZC Co., a customer. On the due date of the note, AZC honors the note and pays in full. The journal entry that Teal would make to record payment of this note would include a credit to:Interest Revenue for $200.Companies allow customers to pay for products using third-party credit cards because:(All except: there is no cost to the seller to allow third-party credit cards.)Yates Co. uses the allowance method to account for bad debts. At the end of the period, Yate’s unadjusted trial balance shows an accounts receivable balance of $10,000; allowance for doubtful accounts balance of $400 (credit); and sales of $500,000. Based on history, Yates estimates that bad debts will be 1% of sales. The entry to record the estimated bad debts will include a debit to bad debts expense in the amount of:$5,000Bad debts are:– accounts of customers who do not pay.
– an expense of selling on credit.
– also called uncollectible accounts.
The direct write-off method records bad debts expense only when an account becomes uncollectible, which is not always in the same period as the sale. For this reason, the direct write-off method violates the ________ principle.matchingThe following financial information is available for Siu Co.
2010
Net Sales – 160,000
Accounts Receivable – 38,000
2009
Net Sales – 155,000
Accounts Receivable – 32,000
Compute accounts receivable turnover for 2010. Round your answer to one decimal place.
4.6Avi Co. raises cash by borrowing $10,000 and pledging $12,000 accounts receivable as security for the loan. To comply with the full disclosure principle, Avi will record a journal entry in the amount of the $10,000 note payable, and also record a (debit/credit/footnote) to the financial statements, indicating that $12,000 of accounts receivables have been pledged.footnoteTricon Co. sells $10,000 of its accounts receivables and is charged a 5% factoring fee. It records this sales with a debit to:Cash for $9,500.Conroy Company uses the allowance method to account for bad debts. During 2010, Conroy determined that a balance $200 for Alegia Co. was uncollectible and wrote the balance off. What is the total decrease to net income related to this entry?$0All of the following are similarities in valuing receivables using U.S. GAAP and IFRS except:IFRS does not require the allowance method for uncollectibles.

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