ACCTG 211 AR Review
Assessment
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Dr. Paz
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Other
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University
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4 plays
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Hard
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7 questions
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1.
Multiple Choice
Accounts receivable are liabilities.
Notes receivable usually have longer collection terms than accounts receivable.
Accounts receivable are more liquid than cash.
Notes receivable are always classified as current assets.
2.
Multiple Choice
credit to Accounts Receivable and a debit to Bad Debts Expense
debit to the Allowance for Bad Debts and a credit to Accounts Receivable
debit to Accounts Receivable and a credit to Cash
credit to Accounts Receivable and a debit to Interest Expense
3.
Multiple Choice
It results in more accurate net income than any other method.
It is only suitable for small companies that have very few uncollectible receivables.
GAAP requires public companies to follow the direct write-off method.
It provides better matching of revenues with expenses.
4.
Multiple Choice
the allowance method and the amortization method
the gross-up method and the direct write-off method
the direct write-off method and the percent-of-completion method
the aging-of-accounts-receivable method and the percent-of-sales method
5.
Multiple Choice
$500
$505
$1,225
$1,230
6.
Multiple Choice
Accounts Receivable $42,000 (debit balance)
Allowance for Bad Debts $7,000 (credit balance)
Bad Debts Expense $0
During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $770,000, and $18,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts is ________.
$2,000
$7,000
$8,250
$9,000
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