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Financial Accounting Exam
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Financial Accounting Exam 2 2024-2025Which of the following accounts is debited when a company provides services on
account? - ANS Accounts Receivable
Which of the following transactions would result in an account receivable? - ANS
Providing services to customers on account.
The amount of cash owed to the company by its customers from the sale of products or
services on account is known as: - ANS Accounts Receivable.
A sales discount is recorded by the seller as a(n): - ANSWER Contra revenue.
On January 18, a company performs services for a customer and establishes the
customer's account receivable with a debit for $500. The company offers the customer
terms 2/10, n/30. Which of the following would be recorded when the customer remits
payment on January 25? - ANSWER Debit Sales Discount for $10.
Which of the following is the term for the seller decreasing customer's balance due
based on some deficiency in the company's product or service? - ANSWER Sales
Allowance.
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30.
Frederickson pays for the services on August 12. What amount would Sanders record
as revenue on August 4? - ANSWER $5,000.
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30.
Frederickson pays for the services on August 12. What is the amount of net revenues
(total revenue minus sales discounts) as of August 12? - ANSWER $4,850.
, The entry to record the estimate for uncollectible accounts includes: - ANSWER A debit
to Bad Debt Expense.
Allowance Method for Uncollectible Accounts Under the allowance method for
uncollectible accounts, the balance of Allowance for Uncollectible Accounts is
increased when: - ANSWER Future bad debts are estimated.
The Accounts Receivable balance for Schmidt Company is $100,000, its adjusted
balance in Allowance for Uncollectible Accounts is $4,000, and its bad debt expense is
$3,800. The net amount of accounts receivable is: - ANSWER $96,000.
During its first year of operations, a company provides for estimated future uncollectible
accounts in the amount of $5,600. How much would be reported as bad debt expense in
the current year's income statement? - ANSWER $5,600.
If the allowance method of accounting for uncollectible accounts is used and a specific
account is written off: - ANSWER Net accounts receivable do not change
If a firm uses the allowance method of accounting for uncollectible accounts and then
collects cash on an account receivable which it previously wrote off: - ANSWER There is
no change in total assets
The effect of writing off a specific account receivable is: - ANSWER A reduction in the
Allowance for Uncollectible Accounts
Accounts Receivable ending balance on December 31 is $80,000. Assume that the
unadjusted balance of Allowance for Uncollectible Accounts is a debit balance of $500,
and that the company estimates that 7% of accounts receivable will not be collected.
Bad debt expense recorded on December 31 will be: - ANSWER $6,100
Accounts Receivable balance on December 31 is $80,000. Assume the Allowance for
Uncollectible Accounts has an unadjusted credit balance of $500 and the company
estimates it will not collect 7% of accounts receivable. Bad debt expense recorded on
December 31 will be: - ANSWER $5,100
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