Ch. 8 Quiz-study 7

If a company fails to record estimated bad debt expense A. receivables are understated. B. expenses are understated. C. revenues are understated. D. liabilities are understated.

Under the Allowance Method, when an account becomes uncollectible and must be written off, A. Sales should be debited B. Bad Debt Expense should be credited C. Allowance for Doubtful Accounts should be credited D. Accounts Receivable should be credited

An aging of a company's accounts receivable indicates that $3,000 are estimated to be uncollectible. If the Allowance for Doubtful Accounts has a $800 debit balance, the adjustment to record bad debts for the period will require a A. credit to the Allowance for Doubtful Accounts for $800 B. debit to Bad Debt Expense for $3,000 C. debit to Bad Debt Expense for $2,200 D. debit to Bad Debt Expense for $3,800

If a company uses the allowance method to account for uncollectible accounts, the entry to write-off an uncollectible account only involves balance sheet accounts. T/F

Voight Company's account balances at December 31 for Accounts Receivable was $1,400,000 and for the Allowance for Doubtful Accounts was $70,000 (credit). An aging of accounts receivable indicated that $108,000 are expected to become uncollectible. The amount of the adjusting entry to record Bad Debt Expense at December 31 is

Under the direct write-off method, no attempt is made to match bad debt expense to sales revenues in the same accounting period. T/F

A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services. T/F

On July 15, Fowler Company sells merchandise on account to Coffey Co. for $1,500, terms 2/10, n/30. On July 20, Coffey Co. returns merchandise worth $600 to Fowler Company. On July 24, payment is received from Coffey Co. for the balance due. What is the amount of cash received?

An aging of a company's accounts receivable indicates that $14,000 are estimated to be uncollectible. If the Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a A. debit to Bad Debt Expense for $14,000 B. debit to Bad Debt Expense for $12,900 C. debit to the Allowance for Doubtful Accounts for $12,900 D. a credit to the Allowance for Doubtful Accounts for $14,000

If a retailer assesses a finance charge on the amount owed by a customer, Accounts Receivable is debited for the amount of the interest. T/F