ACCT 2301 CHAPTER 5 QUIZ

Which of the following best describes credit sales?

On July 8, Ray Inc. sold 100 printers to Office Rental Company at $600 each and offered a 2% discount for payment within 10 days. On July 15, Office Rental Company paid the full amount in cash. What should Ray Inc. record on July 15?

Eric Company has the following information: What is the amount of net revenues for Eric Company?

Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. The price reduction is an example of a

Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. This is an example of a

When customers purchase products on account, Spitz Manufacturing offers them a 2% reduction in the amount owed if they pay within 10 days. This is an example of a

On November 10 of the current year, Flores Mills provides services to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on December 5. How would Flores record the collection of cash on December 5?

Oswego Clay Pipe Company provides services of $45,300 to Southeast Water District #45 on April 12 of the current year with terms 1/15, n/60. What would Oswego record on April 12?

At December 31, Gill Co. reported accounts receivable of $291,000 and an allowance for uncollectible accounts of $750 (credit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 4% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:

At December 31, Gill Co. reported accounts receivable of $245,000 and an allowance for uncollectible accounts of $1,700 (debit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:

A company's adjustment for uncollectible accounts at year-end would include a

Allowance for Uncollectible Accounts is

At the end of 2015, Murray State Lenders had a balance in its Allowance for Uncollectible Accounts of $4,500 (credit) before any adjustment. The company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method. Murray State's adjustment on December 31, 2015, to record its estimated uncollectible accounts included a:

At the end of 2015, Murray State Lenders had a balance in its Allowance for Uncollectible Accounts of $4,500 (debit) before any adjustment. The company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method. Murray State's adjustment on December 31, 2015, to record its estimated uncollectible accounts included a:

When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write off the accounts using the allowance method?

Under the direct write-off method, what adjustment is made at the end of the year to account for possible future bad debts?

Under the direct write-off method, what adjustment is made at the time an actual bad debt occurs?

On February 1, 2015, Middleton Corp. lends cash and accepts a $2,300 note receivable that offers 20% interest and is due in six months. How much interest revenue will Middleton Corp report during 2015? (Do not round intermediate calculations.)

On February 1, 2015, Sanger Corp. lends cash and accepts a $7,500 note receivable that offers 20% interest and is due in six months. What would Sanger record on August 1, 2015, when the borrower pays Sanger the correct amount owed? (Do not round intermediate calculations.)

On September 1, 2015, Middleton Corp. lends cash and accepts a $3,500 note receivable that offers 9% interest and is due in six months. How much interest revenue will Middleton Corp report during 2015? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)