Financial Accounting Chapter 9 Exam Questions with Correct Answers
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Course
Financial Accounting
Institution
Financial Accounting
This term represents all money claims against other entities, including people, business firms, and other organizations. - Answer-receivables
A note receivable due in 3 years is listed on the balance sheet under the caption: - Answer-Investments.
Selling receivables is also known as: - Answer...
Financial Accounting Chapter 9 Exam
Questions with Correct Answers
This term represents all money claims against other entities, including people, business
firms, and other organizations. - Answer-receivables
A note receivable due in 3 years is listed on the balance sheet under the caption: -
Answer-Investments.
Selling receivables is also known as: - Answer-factoring.
Under the direct write-off method: - Answer-bad debt expense is recorded when the
customer's account is deemed to be worthless.
When a customer's account is identified as uncollectible using the allowance for
doubtful accounts method, which of the following is the correct entry to record the write-
off? - Answer-debit to Allowance for Doubtful Accounts, credit to Accounts Receivable
(customer name)
The Allowance for Doubtful Accounts has a debit balance of $3,000 at the end of the
year (before adjustment), and Bad Debt expense is estimated at 2% of net sales. If net
sales are $600,000, the amount of the adjusting entry to record the provision for
doubtful accounts is: - Answer-$12,000.
The Allowance for Doubtful Accounts has a debit balance of $3,000 at the end of the
year (before adjustment), and the balance of Allowance for Doubtful Accounts is
estimated at $12,000. If Accounts Receivable are $700,000, the amount of the adjusting
entry to record the provision for doubtful accounts using the analysis of receivables
method is: - Answer-$15,000.
Which statement is true? - Answer-The allowance method uses an estimate based on
(1) a percent of sales or (2) an analysis of receivables.
The maturity value of a $2,000 promissory note, 5% interest due in 90 days is: -
Answer-$2,025.
Assume that Village Fabrics offers credit terms of 2/15, n/40 and has net sales of
$50,000 and beginning and ending accounts receivable balances of $2,100 and $2,400.
The accounts receivable turnover is: - Answer-22.2
Chapter 10 - Answer-Current liabilities and payroll
A(n) ________ lease is accounted for as if the lessee has, in fact, purchased the asset.
- Answer-capital
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