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Exam 15: Accounts Receivable and Uncollectible Accounts

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Question 41

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The balance of the Allowance for Doubtful Accounts account is reported as

A) a deduction from Sales on the income statement.
B) an addition to Accounts Receivable on the balance sheet.
C) a deduction from Accounts Receivable on the balance sheet.
D) an expense on the income statement.

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Question 42

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Uncollectible Accounts Expense can be called Loss from Uncollectible Accounts.

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Question 43

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At the end of the current year, the trial balance of Cary's Craft Shop included the accounts and balances shown below. Credit sales were $290,000. Returns and allowances on these sales were $4,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.3 percent of net credit sales. Accounts Receivable $ 36,000 Dr. Allowance for Doubtful Accounts 1,000 Dr. 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

Millie's Draperies uses the allowance method of recording bad debts. On June 13, the $200 account balance of Jane Murphy was written off as uncollectible. However, on August 5, Murphy paid $80 of the amount previously written off. The entry to reinstate Jane Murphy's account would include:

Under the Allowance Method of accounting for uncollectible accounts, a firm may base their estimate of uncollectible accounts on all of the following EXCEPT:

A firm reported sales of $300,000 for the year and Accounts Receivable has a balance of $20,000 at year-end. Prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $300. The firm estimated its losses from uncollectible accounts to be one-half of 1 percent of sales. The entry to record the estimated losses from uncollectible accounts will include a credit to Allowance for Doubtful Accounts for

On December 31, prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $630. An analysis of the accounts receivable aging estimates $2,850 of probable losses from uncollectible accounts. The adjusting entry needed to record the estimated losses from uncollectible accounts is

When there is a partial collection of a balance previously written off, the entry to record the reinstatement of the customer's account will be for the entire amount written off.

The experience of other firms in the same line of business may be used in estimating losses from uncollectible accounts for a new firm.

Allowance for Doubtful Accounts is classified as

Common internal controls for accounts receivable would not include:

On December 31, 2019, prior to adjustments, Accounts Receivable has a debit balance of $256,000 and the Allowance for Doubtful Accounts has a credit balance of $1,600. The firm estimates its losses from uncollectible accounts to be 5% of accounts receivable at the end of the year. The amount of the adjusting entry needed to record the estimated losses from uncollectible accounts is:

At the end of the current year, the trial balance of Daniels' Furniture Store included the accounts and balances shown below. Credit sales were $180,000. Returns and allowances on these sales were $2,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

On December 31, 2019, prior to adjustments, Accounts Receivable has a debit balance of $256,000 and the Allowance for Doubtful Accounts has a credit balance of $1,600. The firm estimates its losses from uncollectible accounts to be 5% of accounts receivable at the end of the year. The balance in the Allowance for Doubtful Accounts after the adjusting entry for the estimated losses from uncollectible accounts is:

Allowance for Doubtful Accounts has a credit balance of $3,600 immediately before the write-off of a $750 account receivable. The balance of Allowance for Doubtful Accounts immediately after the write-off is

On December 31, 2019, prior to adjustments, Accounts Receivable has a debit balance of $370,000 and the Allowance for Doubtful Accounts has a credit balance of $800. The firm estimates its losses from uncollectible accounts to be 3% of accounts receivable at the end of the year. The amount to be reported as Uncollectible Accounts Expense on the income statement for the year ending December 31, 2019, is

On December 31, prior to adjustment, Allowance for Doubtful Accounts has a debit balance of $400. An analysis of the aging of the accounts receivable produces an estimate of $3,100 of probable losses from uncollectible accounts. The adjusting entry needed to record the estimated losses from uncollectible accounts is

At the end of the current year, the trial balance of Monique's Fashion Industries included the accounts and balances shown below. Credit sales were $6,400,000. Returns and allowances on these sales were $57,200. Assume that the firm bases its estimate of the loss from uncollectible accounts on0.3 percent of net credit sales. Accounts Receivable $ 650,000 Dr. Allowance for Doubtful Accounts 4,500 Cr. Sales 7,000,000 Cr. Sales Returns and Allowances 55,000 Dr. 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts? (Round your answers to the nearest dollar.)

Which of the following statements is not correct?

The adjusting entry to record estimated losses from uncollectible accounts consists of a debit to Allowance for Doubtful Accounts.