Question

Customer A. Smith owed Stonebridge Electronics $325. On April 27, 2016, Stonebridge determined this account receivable to be uncollectible and wrote off the account. The company uses the direct write-off method. On July 15, 2016, Stonebridge received a check for $325 from the customer. How should the July 15, 2016 transaction be recorded?

Group of answer choices

A business maintains subsidiary accounts for each of its customers. On May 15, the business sells services on account: $2,500 to customer J. Simmons; $4,100 to customer A. Jones; and $1,300 to customer J. Williams. Which journal entry is needed to record this sales transaction? Group of answer choices May 15 Accounts Receivable 7,900     Service Revenue 7,900 May 15 Accounts Receivable - J. Simmons 2,500 Accounts Receivable - A. Jones 4,100 Accounts Receivable - J. Williams 1,300      Service Revenue 7,900 May 15 Service Revenue 7,900     Accounts Receivable 7,900 May 15 Accounts Receivable Control 7,900     Sales Revenue 7,900 May 15 Accounts Receivable - J. Simmons 2,500 Accounts Receivable - A. Jones 4,100 Accounts Receivable - J. Williams 1,300      Accounts Receivable - Control 7,900

July 15	Accounts Receivable - A. Smith	325
	Bad Debt Revenue		325

July 15	Cash	325
	Bad Debt Expense		325

July 15	Accounts Receivable - A. Smith	325
	Bad Debt Expense		325
July 15	Cash	325
	Accounts Receivable - A. Smith		325

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Question 152.5 pts

Which of the following is the correct formula to calculate inventory turnover?

Group of answer choices

Inventory turnover = Cost of goods sold / Average merchandise inventory

Inventory turnover = Cost of goods sold × Average merchandise inventory

Inventory turnover = Cost of goods sold + Average merchandise inventory

Inventory turnover = Cost of goods sold - Average merchandise inventory

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Question 162.5 pts

The ending merchandise inventory for the current year is overstated by $25,000. What effect will this error have on the following year's net income?

Group of answer choices

The net income will be overstated by $50,000.

The net income will be overstated by $25,000.

The net income will be understated by $25,000.

The net income will be understated by $50,000.

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Question 172.5 pts

Which of the following is added to operating income to arrive at net income?

Group of answer choices

sales revenue

cost of goods sold

interest revenue

operating expenses

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Question 182.5 pts

The goal of reporting realistic figures and never overstating assets or net income applies to the ________.

Group of answer choices

conservatism principle

materiality concept

disclosure principle

consistency principle

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Question 192.5 pts

In a good internal control system, which of the following sets of documents is required for proper approval of a payment to a supplier?

Group of answer choices

a journal entry, a supplier invoice, and a description of the goods being purchased

a receiving report, an invoice, and a purchase order

a purchase order, a journal entry, and a price catalog

a supplier invoice, a bill of lading, and the supplier's financial statements

Answer 1

1) Journal Entry for receivable of Bad Debt of $325

July 15, 2016 Cash A/c Dr $325

To Bad Debt Expense A/c $325

2) Journal Entry for recording Sales Transaction under Subsidiary Ledger

May 15,   

Accounts Receivable - J. Simmons 2,500

Accounts Receivable - A. Jones        4,100

Accounts Receivable - J. Williams     1,300

                     Service Revenue                             7,900

3) Question 152.5 pts

Inventory turnover = Cost of goods sold / Average merchandise inventory

4) Question 162.5 pts

The net income will be understated by $25,000.

5) Question 172.5 pts

Interest revenue.

6) Question 182.5 pts

Conservatism Principle

7) Question 182.5 pts

A receiving report, An invoice, And a purchase order