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Business, Education, Professional Development
1st -
University
QUIZ 3 : ACCOUNTING FOR RECEIVABLES
13 questions
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- 1. Multiple Choice
What are the double entries to record bad debt?
dr. Bad Debt, cr. Allowance for Doubtful Debts
dr. Profit and Loss, cr. Bad Debt
dr. Bad debt, cr. Profit and Loss
dr. Bad debt, cr. Accounts Receivable
- 2. Multiple Choice
What effect does bad debts have on debtors?
it increases debtors
it decreases debtors
it has no effect on debtors
none of the above
- 3. Multiple Choice
The double entries to record an increase in allowance for bad debts are?
dr. Accounts Receivables, cr. Allowance for doubtful debts
dr. Bad debt, cr. Allowance for doubtful debts
dr. Allowance for bad debt, cr. Accounts Receivables
dr. Allowance for doubtful debts, cr. Bad debt
- 4. Multiple Choice
What are the double entries to record a decrease in allowance for doubtful debts?
dr. Accounts Receivables, cr. Allowance for doubtful debts
dr. Bad debts, cr. Allowance for doubtful debts
dr. Allowance for doubtful debts, cr. Decrease in Allowance for doubtful debts
dr. Allowance for doubtful debts; cr. Accounts Receivables
dr. Decrease in Allowance for doubtful debts, cr. Allowance for doubtful debts
- 5. Multiple Choice
1 Jan Allowance for doubtful debts RM500
31 Dec Allowance for doubtful debts RM400
How should the decrease in the allowance be treated in the Profit and Loss account?
add RM400 to expenses
add RM500 to expenses
deduct the RM100 increase in allowance from expenses
add the RM100 decrease in allowance to Gross Profit
- 6. Multiple Choice
Accounts Receivables :
2019 : RM2800;
2020 : RM3100
Allowance for doubtful debts :
2019 : RM280
2020: RM310
What is Net Realizable value for Accounts Receivables should appear in the Statement of Financial Position for 2020?
RM2520
RM2790
RM2510
RM3410
- 7. Multiple Choice
Bad debts can be classified as:
a current asset
a current liability
an expense
a revenue
- 8. Multiple Choice
What are the double entries to create a Allowance for doubtful debts?
dr. Allowance for doubtful debts, cr. Accounts Receivables
dr. Bad debts, cr. Allowance for doubtful debts
dr. Allowance for doubtful debts, cr. Bad debts
dr. Accounts Receivables, cr. Allowance for doubtful debts
- 9. Multiple Choice
Accounts Receivables :
Year 1 : RM10,000
Year 2: RM12,000
Allowance for doubtful debts is 5% of Accounts Receivables.
What is the amount of the bad debts expenses to be charged in the Profit and Loss account for the second year?
RM100
RM600
RM500
RM400
- 10. Multiple Choice
When the allowance method is used to account for uncollectible accounts, Bad Debt Expense is debited when
a sale is made.
an account becomes bad and is written off.
management estimates the amount of uncollectibles.
a customer's account becomes past-due.
- 11. Multiple Choice
Under the direct write-off method of accounting for uncollectible accounts, Bad Debt Expense is debited
when a credit sale is past due.
when an account is determined to be uncollectible.
at the end of each accounting period.
whenever a pre-determined amount of credit sales have been made.
- 12. Multiple Choice
Two methods of accounting for uncollectible accounts are the
allowance method and the accrual method.
direct write-off method and the accrual method.
direct write-off method and the allowance method.
allowance method and the net realizable method.
- 13. Multiple Choice
To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a
debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.
debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts.
debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.
debit to Loss on Credit Sales Revenue and a credit to Accounts Receivable.
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