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MGMT 200 Exam 2 || A+ GRADED SOLUTIONS.
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When a company provides services on account, which of the following accounts is debited? correct answers accounts receivable The amount of cash owed to the company by its customers from the sale of products or services on account is known as: correct answers accounts receivable A sales discou...

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  • August 9, 2024
  • 12
  • 2024/2025
  • Exam (elaborations)
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MGMT 200 Exam 2 || A+ GRADED SOLUTIONS.
When a company provides services on account, which of the following accounts is debited?
correct answers accounts receivable

The amount of cash owed to the company by its customers from the sale of products or
services on account is known as: correct answers accounts receivable

A sales discount is recorded by the seller as a(n): correct answers contra revenue

On January 18, a company provides services to a customer for $500 and offers the customer
terms 2/10, n/30. Which of the following would be recorded when the customer remits
payment on January 25? correct answers debit sales discount for $10

Which of the following refers to the seller reducing the customer's balance owed because of
some deficiency in the company's product or service? correct answers sales allowance

The entry to record the estimate for uncollectible accounts includes: correct answers a debit
to bad debt expense

Under the allowance method for uncollectible accounts, the balance of Allowance for
Uncollectible Accounts increases when: correct answers future bad debts are estimated

On December 31, the Accounts Receivable ending balance is $80,000. Assume that the
unadjusted balance of Allowance for Uncollectible Accounts is a debit of $500 and that the
company estimates 7% of the accounts receivable will not be collected. The amount of bad
debt expense recorded on December 31 will be: correct answers $6,100

On December 31, the Accounts Receivable ending balance is $80,000. Assume that the
unadjusted balance of Allowance for Uncollectible Accounts is a credit of $500 and that the
company estimates 7% of the accounts receivable will not be collected. The amount of bad
debt expense recorded on December 31 will be: correct answers $5,100

Schmidt Company's Accounts Receivable balance is $100,000, its adjusted balance in
Allowance for Uncollectible Accounts is $4,000, and its bad debt expense is $3,800. The net
realizable value of accounts receivable is: correct answers $96,000

If a company uses the allowance method of accounting for uncollectible accounts and writes
off a specific account: correct answers net accounts receivable do not change

If a company uses the allowance method of accounting for uncollectible accounts and collects
cash on an account receivable previously written off: correct answers there is no change in
total assets

Under the direct write-off method, uncollectible accounts are recorded: correct answers in the
period the account is determined actually collectible

A company provides services to a customer in the current year and then determines in the
following year that the customer's account needs to be classified as uncollectible. If the

, company uses the direct write-off method, which of the following would be recorded in the
following year at the time of the write-off? correct answers debit bad debt expense

On April 1, 20X1, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest
are due on March 31, 20X2 (one year later). On March 31, 20X2, Nelson Inc. will record
interest revenue of: correct answers $2,000

On April 1, 20X1, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest
are due on March 31, 20X2 (one year later). On December 31, 20X1, Nelsen will accrue
interest revenue of: correct answers $6,000

The receivables turnover ratio is a measure of: correct answers the number of times during a
year that the average accounts receivable balance is collected

what is the receivables turnover ratio? correct answers receivables turnover ratio = net
income/average accounts receivable

inventory correct answers things that firms will use to make a finished product for customers;
an asset on the balance sheet

true or false? Wholesalers resell inventory to end users. correct answers false

true or false? The cost of inventory sold during a period is reported on the income statement.
correct answers true

LIFO correct answers last in first out; last units purchased are the first ones solde

weighted average cost method correct answers an inventory costing method that assigns the
same unit cost to all units available for sale during the period-

cost of goods available for sale/number of units available for sale

When inventory costs are rising, the _____ results in a higher reported inventory. correct
answers FIFO method

Accountants often call FIFO the balance-sheet approach because _____. correct answers the
amount it reports for ending inventory better approximates the current cost of inventory

Which of the following is true of a period of falling inventory costs? correct answers LIFO
will report higher gross profit than FIFO.

Which of the following is an advantage of using LIFO in a period of rising costs? correct
answers results in lower taxes

The LIFO conformity rule requires that _____. correct answers a company that uses LIFO for
tax reporting to also use LIFO for financial reporting

Which of the following represents the balance of Cost of Goods Sold at the end of the year?
correct answers The cost of inventory not yet sold by the end of the year.

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