The expense recognition (matching) principle, as applied to bad debts, requires:
answer
The use of the allowance method of accounting for bad debts
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The allowance method based on the idea that a given percent of a company's credit sales for the period is uncollectible is:
answer
The percent of sales method
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The person who signs a note receivable and promises to pay the principal and interest is the:
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Maker
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Sellers allow customers to use credit cards for all of the following reasons except:
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To be able to charge more due to fees and interest.
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The maturity date of a note receivable:
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Is the day the note is due to be repaid.
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A credit sale of $5,275 to a customer would result in which of the following?
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A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger.
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A promissory note:
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Is a written promise to pay a specified amount of money at a certain date.
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A 90-day note issued on April 10 matures on:
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July 9.
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Valley Spa purchased $10,800 in plumbing components from Tubman Co. Valley Spa signed a 60-day, 10% promissory note for $10,800. If the note is dishonored, but Tubman intends to continue collection efforts, what is the journal entry to record the dishonored note? (Use 360 days a year.)
A company borrowed $16,000 by signing a 180-day promissory note at 12%. The total interest due on the maturity date is: (Use 360 days a year.)
answer
$960.00
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A company borrowed $29,000 by signing a 90-day promissory note at 12%. The maturity value of the note is: (Use 360 days a year.)
answer
$29,870.00
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Jervis accepts all major bank credit cards, including those issued by Northern Bank (NB), which assesses a 4.0% charge on sales for using its card. On June 28, Jervis had $5,200 in NB Card credit sales. What entry should Jervis make on June 28 to record the deposit?
On July 9, Mifflin Company receives an $8,900, 90-day, 12% note from customer Payton Summers as payment on account. What entry should be made on the maturity date assuming the maker pays in full, and no adjusting entries have been made related to the note? (Use 360 days a year.)
answer
Debit Notes Receivable for $78,000; credit Cash $78,000.
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Jasper makes a $40,000, 90-day, 7.5% cash loan to Clayborn Co. Jasper's entry to record the collection of the note and interest at maturity should be: (Use 360 days a year.)
