In: Accounting
Answer:
18. When using the estimate-based on sales method, the entry to record uncollectible accounts expense includes a credit to the Accounts Receivable account.
Answer: False
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19. When using the estimate based on analysis of receivables, the amount computer in the analysis is always the required amount that would be recorded in the adjusting entry.
Answer: False
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21. Generally accepted accounting principles do not normally allow the use direct write-off method of accounting for uncollectible accounts.
Answer: True
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22. The direct write-off method records uncollectible accounts expense in the yea the specific account receivable is determined to be uncollectible.
Answer: True
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23. The equation for computing interest on an interest-bearing note is as follows: interest equals maturity value times rate times time.
Answer: False
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24. The due date a 60-day note dated July 10 is September 10
Answer: False
It is september-8 and not 10
Month |
Date |
July |
21 |
Aug |
31 |
Sep |
8 |
Total days |
60 |
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25. The maturity value of a 12%, 60-day note for $5,000 is $5,600.
Answer: False
It is 5100 (5000+(5000*12%*60/360)=5100 not 5600