FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 13: Accounting for Bad Debts

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Essay

Review LaterAdd Note

Review Later

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature. - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column 1 } & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \\\hline \text { Bad debts } & & & & \\ \begin{array} { l } \text { expense }\end{array} & & & \\\hline\end{array}$

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Indy Sport and Hobby's Allowance for Doubtful Accounts had an unadjusted credit balance of $400.The manager estimates that $900 of the Accounts Receivable is uncollectible.Using the balance sheet approach,the year-end adjusting entry for Bad Debts Expense:

A) includes a credit to the Bad Debt Expense account for $500.
B) includes a debit to the Bad Debts Expense account for $900.
C) includes a credit to the Bad Debts Expense account for $1,300.
D) includes a debit to the Bad Debts Expense account for $500.

E) C) and D)
F) A) and B)

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

The adjustment for bad debts using the percentage of receivables ignored the credit balance in the Allowance account.This error would cause:

Sigma reports net credit sales of $400,000.There is a credit balance of $1,000 in the Allowance for Doubtful Accounts.Uncollectible accounts are estimated to be 2.5% of net credit sales.Under the income statement approach,the adjusting entry would require a debit to Bad Debt Expense for:

If a recovery of a written-off account is made in the same year using the allowance method,the Bad Debts Recovered account would be used.

Mid-Iowa Internet Service uses the direct write-off method for recording bad debts.Journalize the following transactions for Mid-Iowa: 2010 Mar. 13 Wrote off Pat's account for $\$ 350$ Apr. 17 Wrote off Cole's account for $\$ 75$ Jul. 5 Recovered $\$ 50$ from Cole 2011 Jan. 9 Recovered $\$ 200$ from Pat

Myra's balance of Accounts Receivable is $4,000.The balance of the Allowance account is $600 credit.Myra writes off a $150 uncollectible account.The effect on net realizable value of the receivables is that it:

Net Realizable Value can be defined as:

Prepare the adjusting journal entry for Bad Debts Expense from the following information using the balance sheet approach. $\begin{array}{llcc} \text { Net Sales for the year} &\$250,000 \\ \text {Balance in the allowance account } &250 \text {credit}\\ \text {Estimated percentage of sales uncollectible } &1\%\\ \text { Estimated uncollectible accounts-aging } &\$3,000\\\end{array}$

On December 31,2010,Paint Pros had a balance in Accounts Receivable of $15,000.Net credit sales for the year were $450,000.The Allowance for Doubtful Accounts has a debit balance of $800.Journalize the recording of the bad debt expense under the income statement approach if 0.8% of net credit sales is deemed uncollectible.

Which account is classified as a contra-asset?

As the past due time increases for an account,the likelihood of collecting that account:

The general ledger controlling account for Accounts Receivable shows a debit balance of $120,000.The Allowance for Doubtful Accounts has a credit balance of $5,000.An aging report of accounts receivable accounts resulted in an estimate of $23,000 of uncollectible accounts receivable.Calculate the amount of the adjustment using the balance sheet approach. Amount of the adjustment ________

Using the aging method,estimated uncollectible accounts are $3,000.If the balance in the Allowance for Doubtful Accounts is a $600 credit before adjustment,what is the Bad Debts Expense adjustment for the period?

Using the aging method,estimated uncollectible accounts are $5,000.If the balance of Allowance for Doubtful Accounts is $1,500 credit before adjustment,what is a Bad Debt Expense for the period?

After the accounts are adjusted and closed at the end of the year,Accounts Receivable has a normal balance of $540,000 and Allowance for Doubtful Accounts has a normal balance of $25,000.What is the net realizable value of the Accounts Receivable?

A debit balance in Allowance for Doubtful Accounts indicates the estimate for Bad Debts was too high.

Empire has a credit balance of $750 in its Allowance for Doubtful Accounts.The balance it the Accounts Receivable account is $80,500,with $2,415 estimated to be uncollectible after aging the accounts.Under the balance sheet approach,the debit to Bad Debt Expense will be:

Before the accounts are adjusted and closed at the end of the year,Accounts Receivable has a normal balance of $200,000 and Allowance for Doubtful Accounts has a debit balance $20,000.What is the net realizable value of the accounts receivable?

If the direct write-off method of accounting for uncollectible receivables is used,what general ledger account is credited to write off a customer's account as uncollectible?