Question

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

a.Accounts Receivable

b.Uncollectible Accounts Payable

c.Bad Debt Expense

d.Allowance for Doubtful Accounts

2) If Modern Company received $3,650 from Connor Young Company on March 12 for the total amount of an account that had been written off on March 1, the entry to record the cash receipt after the account has been reinstated under the direct write-off method

a.includes a credit to Bad Debt Expense of $3,650.

b.is the same as it would be under the allowance method.

c.includes a debit to Allowance for Doubtful Accounts of $3,650.

d.includes a credit to Cash of $3,650.

3) If Modern Company received $3,650 from Connor Young Company on March 12 for the total amount of an account that had been written off on March 1, the entry to reinstate the account under the direct write-off method would include

a.a credit to Bad Debt Expense of $3,650.

b.a debit to Bad Debt Expense of $3,650.

c.a debit to Allowance for Doubtful Accounts of $3,650.

d.a credit to Cash of $3,650.

4) Days' sales in receivables is determined by dividing

a.Average Accounts Receivable by Sales.

b.365 by Accounts Receivable.

c.Average Accounts Receivable by Average Daily Sales.

d.None of these choices are correct.

5) Allowance for Doubtful Accounts will have

a.an unadjusted debit balance at the end of the period if the write-offs during the period were equal to the beginning balance.

b.an unadjusted debit balance at the end of the period if the write-offs during the period were less than the beginning balance.

c.an unadjusted credit balance at the end of the period if the write-offs during the period were more than the beginning balance.

d.an unadjusted credit balance at the end of the period if the write-offs during the period were less than the beginning balance.

6) A 90-day, 10% note for $9,000, dated April 15, is received from a customer on account. The face value of the note is

a.$8,100.

b.$9,225.

c.$9,000.

d.$9,900.

7) Under the allowance method, when a specific account is written off,

a.net income will decrease.

b.total assets will be unchanged.

c.total assets will decrease.

d.total assets will increase.

8) In the Current Assets section of the balance sheet, receivables are usually listed in order

a.of size.

b.alphabetically.

c.of due date.

d.that they can be turned into cash.

9) When analyzing accounts receivable, which of the following is not true?

a.Look for trends from year to year for accounts receivable turnover and days' sales in receivables.

b.Never look at accounts receivable turnover and days' sales in receivables ratios together because they could be misleading.

c.Companies may become less efficient in collecting receivables from one year to the next.

d.Companies may become more efficient in collecting receivables from one year to the next.

10) Financial statement data for the year ending December 31 for Gore Co. are as follows:

Sales	$4,250,000
Accounts receivable:
Beginning of year	600,000
End of year	630,000

Determine accounts receivable turnover for the year.

a.6.75

b.3.46

c.7.08

d.6.91

11) Receivables are _________ on the __________, which are listed in order of ____________.

a.current liabilities; balance sheet; size.

b.current assets; balance sheet; liquidity.

c.current liabilities; balance sheet; due date.

d.current assets; balance sheet; importance.

Answer 1