Question 1

In computing the maturity date of a note,the date the note is issued is included but the due date is omitted.

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Question 2

The interest on a 6%,60-day note for $5,000 is $300.

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Question 3

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

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Question 4

If a promissory note is dishonored,the payee should still record interest revenue.

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Question 5

The equation for computing interest on an interest-bearing note is as follows: Interest = Maturity Value × Interest Rate × Time.

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Question 6

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a debit balance of $2,000.The Accounts Receivable balance is analyzed by aging the accounts and,the amount estimated to be uncollectible is $15,000.The amount to be recorded in the adjusting entry for the bad debt expense is $15,000.

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Question 7

The party promising to pay a note at maturity is the maker.

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Question 8

When a note is written to settle an open account,no entry is necessary.

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Question 9

When accounting for uncollectible receivables and using the percentage of sales method,the matching principle is violated.

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Question 10

If the maker of a note fails to pay the debt on the due date,the note is said to be dishonored.

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Question 11

The balance of Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

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Question 12

When using the analysis of receivables method for estimating uncollectible receivables,the amount computed in the analysis is usually the amount that would be recorded in the end-of-period adjusting entry.

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Question 13

The maturity value of a note receivable is always the same as its face value.

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Question 14

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a credit balance of $5,000.The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000.The amount to be recorded in the adjusting entry for the Bad Debt Expense is $45,000.

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Question 15

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a debit balance of $500.Credit sales for the period total $800,000.If bad debt expense is estimated at 1% of credit sales,the amount of bad debt expense to be recorded in the adjusting entry is $8,500.

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Question 16

When a note is received from a customer on account,it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

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Question 17

The maturity value of a 12%,60-day note for $5,000 is $5,600.

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Question 18

The due date of a 60-day note dated July 10 is September 10.

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Question 19

The balance in Allowance for Doubtful Accounts at the end of the year includes the total of all accounts written off since the beginning of the year.

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Question 20

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a credit balance of $250.The credit sales for the period total $500,000.If the company estimates uncollectible accounts at 1% of credit sales,the amount of bad debt expense to be recorded in an adjusting entry is $4,750.

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Quiz 8: Receivables

In computing the maturity date of a note,the date the note is issued is included but the due date is omitted.

The interest on a 6%,60-day note for $5,000 is $300.

A primary difference between the direct write-off and allowance method is whether or not bad debts is based on a percentage of sales.

If a promissory note is dishonored,the payee should still record interest revenue.

The equation for computing interest on an interest-bearing note is as follows: Interest = Maturity Value × Interest Rate × Time.

The party promising to pay a note at maturity is the maker.

When a note is written to settle an open account,no entry is necessary.

When accounting for uncollectible receivables and using the percentage of sales method,the matching principle is violated.

If the maker of a note fails to pay the debt on the due date,the note is said to be dishonored.

The balance of Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

When using the analysis of receivables method for estimating uncollectible receivables,the amount computed in the analysis is usually the amount that would be recorded in the end-of-period adjusting entry.

The maturity value of a note receivable is always the same as its face value.

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a debit balance of $500.Credit sales for the period total $800,000.If bad debt expense is estimated at 1% of credit sales,the amount of bad debt expense to be recorded in the adjusting entry is $8,500.

When a note is received from a customer on account,it is recorded by debiting Notes Receivable and crediting Accounts Receivable.

The maturity value of a 12%,60-day note for $5,000 is $5,600.

The due date of a 60-day note dated July 10 is September 10.

The balance in Allowance for Doubtful Accounts at the end of the year includes the total of all accounts written off since the beginning of the year.

At the end of a period (before adjustment),Allowance for Doubtful Accounts has a credit balance of $250.The credit sales for the period total $500,000.If the company estimates uncollectible accounts at 1% of credit sales,the amount of bad debt expense to be recorded in an adjusting entry is $4,750.