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ACTG PRACTICE EXAM 2024 QUESTIONS & ANSWERS GRADED A+
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ACTG PRACTICE EXAM 2024 QUESTIONS & ANSWERS GRADED A+
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ACTG PRACTICEEXAM 2024
QUESTIONS &
ANSWERS
GRADED A+
Evatee 9/2/24 ACTG
, ACTG PRACTICE EXAM 2024 QUESTIONS &
ANSWERS GRADED A+
A company uses the Allowance method of accounting for Bad Debts. This
means that in the period when an Account Receivable actually becomes
uncollectible, the company will reduce Accounts Receivable and: Answer -
Decrease the Allowance for Doubtful Accounts account (This is a "write-off".
The journal entry is a debit to Allowance for Doubtful Accounts and credit to
Accounts Receivable.)
The concept of "accrual" accounting Answer - Recognizes revenues when they
are earned, and expenses when they are incurred.
The beginning balance in Accounts Receivable was $5,000. Sales on account
amounted to $20,000 and sales for cash amounted to $18,000. During the
period, $7,000 of Accounts Receivable was written off. If the ending balance in
accounts receivable was $1,200, the amount of cash collected from customers
is: Answer - 16,800 (When sales revenue occurs and cash is immediately
collected, you increase (debit) Cash and increase (credit) Revenue. Therefore,
the $18,000 is not included as an increase (debit) in A/R. The $7,000 write-off
decreases A/R.)
Our customer pays us in advance $500 for services which our company is to
provide in a future period. This event: Answer - Increases Assets and increases
Liabilities
Which of the following accounts are NOT found in the "Closing Entry Answer -
contributed capital
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