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Exam 15: Accounts Receivable and Uncollectible Accounts

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Question 1

Multiple Choice

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What is the type of account and normal balance of Allowance for Doubtful Accounts?

A) Contra asset, credit
B) Liability, credit
C) Asset, debit
D) Contra asset, debit

E) B) and C)
F) All of the above

Correct Answer

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C

Question 2

True/False

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When the allowance method of recognizing losses from uncollectible accounts is used, the net value of accounts receivable on the balance sheet will more nearly reflect the amount that will ultimately be collected than if the direct write-off method is used.

A) True
B) False

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Question 3

Multiple Choice

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On December 31, prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $430. An analysis of the accounts receivable aging estimates $1,900 of probable losses from uncollectible accounts. The adjusting entry needed to record the estimated losses from uncollectible accounts is

At the end of the current year, the trial balance of Johannes' Sporting Goods Shop included the accounts and balances shown below. Credit sales were $220,000. Returns and allowances on these sales were $4,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 3 percent of accounts receivable. Accounts Receivable $ 63,000 Dr. Allowance for Doubtful Accounts 600 Dr. Sales 390,000 Cr. Sales Returns and Allowances 6,000 Dr. 1. What is the balance in the Allowance for Doubtful Accounts account after the adjusting entry for the estimated loss from uncollectible accounts is posted? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

On December 31, prior to adjustments, the balance of Accounts Receivable is $56,000 and Allowance for Doubtful Accounts has a debit balance of $1,200. The firm estimates its losses from uncollectible accounts to be 4% of accounts receivable at the end of the year. The adjusting entry needed to record the estimated losses from uncollectible accounts is

At the end of 2019, the trial balance of Bryant Paint Store included the accounts and balances shown below. Credit sales were $145,000. Returns and allowances on these sales were $2,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.3 percent of net credit sales. Accounts Receivable $ 18,000 Dr. Allowance for Doubtful Accounts 500 Dr. 1. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts for 2019? 2. What is the amount to be reported as Uncollectible Accounts Expense on the income statement for the year ended December 31, 2019?

The method of accounting for losses from uncollectible accounts that results in a valuation of the accounts receivable on the balance sheet that is a more reasonable estimate of the actual amount expected to be collected is

Match the description with the accounting terms.

Allowance for Doubtful Accounts may be used for the valuation of all types of receivables.

On December 31, prior to adjustments, the balance of Accounts Receivable is $22,000 and Allowance for Doubtful Accounts has a credit balance of $135. The firm estimates its losses from uncollectible accounts to be 4% of accounts receivable at the end of the year. The adjusting entry needed to record the estimated losses from uncollectible accounts is

On December 31, 2019, prior to adjustments, Accounts Receivable has a debit balance of $370,000 and the Allowance for Doubtful Accounts has a credit balance of $800. The firm estimates its losses from uncollectible accounts to be 3% of accounts receivable at the end of the year. The amount of the adjusting entry needed to record the estimated losses from uncollectible accounts is

Allowance for Doubtful Accounts has a debit balance of $700 at the end of the year, before adjustments. Sales for the year amounted to $920,000, sales discounts amounted to $31,200 and sales returns and allowances amounted to $42,300. - If the uncollectible accounts expense is estimated at 2% of net sales, the amount of the adjusting entry to record the estimated losses from uncollectible accounts will be

At the end of the current year, the trial balance of Bianca's Exports included the accounts and balances shown below. Credit sales were $9,200,000. Returns and allowances on these sales were $55,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 4 percent of accounts receivable. Accounts Receivable $ 1,960,000 Dr. Allowance for Doubtful Accounts 8,300 Cr. Sales 14,000,000 Cr. Sales Returns and Allowances 110,000 Dr. 1. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts? 2. What is the balance in the Allowance for Doubtful Accounts account after the adjusting entry for the estimated loss from uncollectible accounts is posted?

On December 31, 2019, prior to adjustments, the Allowance for Doubtful Accounts has a debit balance of $750. An aging of the accounts receivable produces an estimate of $6,500 of probable losses from uncollectible accounts. -The balance in the Allowance for Doubtful Accounts after the entry to record estimated losses from uncollectible accounts will be:

Allowance for Doubtful Accounts has a credit balance of $1,100 at the end of the year, before adjustments. Sales for the year amounted to $760,000, sales discounts amounted to $12,000 and sales returns and allowances amounted to $36,000. If the uncollectible accounts expense is estimated at 2% of net sales, the amount of the adjusting entry to record the estimated losses from uncollectible accounts will be

When using the allowance method, the collection of an account previously written off is recorded in the cash receipts journal only.

The adjusting entry to record estimated losses from uncollectible accounts consists of a

At the end of the current year, the trial balance of Aaron's Kitchen Supply Corporation included the accounts and balances shown below. Credit sales were $4,600,000. Returns and allowances on these sales were $27,500. Assume that the firm bases its estimate of the loss from uncollectible accounts on 4 percent of accounts receivable. Accounts Receivable $ 860,000 Dr. Allowance for Doubtful Accounts 5,400 Cr. Sales 7,000,000 Cr. Sales Returns and Allowances 55,000 Dr. 1. What is the balance in the Allowance for Doubtful Accounts account after the adjusting entry for the estimated loss from uncollectible accounts is posted? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

On December 31, prior to adjustments, the balance of Accounts Receivable is $32,000 and Allowance for Doubtful Accounts has a credit balance of $290. The firm estimates its losses from uncollectible accounts to be 5.5% of accounts receivable at the end of the year. The adjusting entry needed to record the estimated losses from uncollectible accounts is

When a firm uses the allowance method to provide for losses for uncollectible accounts, the collection of an account previously written off as uncollectible requires an entry to