The balance in accounts receivable at the beginning of 2011

Reference no: EM13604845

1.The balance in accounts receivable at the beginning of 2011 was $600. During 2011, $3,200 of credit Sales were recorded. If the ending balance in accounts receivable was $500 and $200 in accounts receivable were written off during the year, the amount of cash collected from customers was
a) $3,100
b) $3,200
c) $3,300
d) $3,800

2.A company uses the allowance method to account for bad debts. What is the effect on each of the following accounts of the collection of an account previously written off?Allowance for Bad Debt Uncollectible Accounts Expense
a) Increase Decrease
b) No effect Decrease
c) Increase No Effect
d) No effect No effect

3.West Company: Amount to charge to bad debt expense under two methods.West Company had the following account balances at December 31, 2011 before recording bad debt expense for the year:

-Accounts receivable $900,000
-Allowance for uncollectible accounts (credit balance) 16,000
-Credit Sales for 2011 1,750,000

West is considering the following methods of estimating bad debts for 2011:

- Based on 2% of credit sales

- Based on 5% of year-end accounts receivable

4.What amount should West charge to bad debt expense at the end of 2011 under each method?

Percentage of Credit Sales Percentage of Accounts Receivable
a. $35,000 $29,000
b. $35,000 $45,000
c. $51,000 $29,000
d. $51,000 $45,000

5.Bad debt expense must be estimated in order to satisfy the matching principle where expenses are recorded in the same periods as the related revenues. In estimating the provision for doubtful accounts for a period, companies generally accrue

a. either an amount based on a percentage of total sales or an amount based on a percentage of accounts receivable after adjusting for any balance in the allowance for doubtful accounts
b. a percentage of accounts receivable transactions for the period
c. a percentage of total sales

d. either an amount based on a percentage of credit sales or an amount based on a percentage of accounts receivable after adjusting for any balance in the allowance for doubtful accounts.The next 2 questions are based on the following information:

6.Madison Corporation uses the allowance method to value its accounts receivable and is making the annual adjustments at fiscal year-end, November 30. The proportion of uncollectible accounts is estimated based on past experience, which indicates 1.5% of net credit sales will be uncollectible. Total sales for the year were $2,000,000, of which $200,000 were cash transactions. Madison has determined that the Norris Corporation accounts receivable balance of $10,000 is uncollectible and will write off this account before year-end adjustments are made. Listed below are Madison's account balances at November 30 prior to any adjustments and the $10,000 write-off.

Sales $2,000,000
Accounts receivable 750,000
Sales discounts 125,000
Allowance for doubtful accounts 16,500
Sales returns and allowances 175,000
Bad debt expense 0

1)The entry to write off Norris Corporation's accounts receivable balance of $10,000 will

a. Increase total assets and decrease net income.
b. Decrease total assets and net income.
c. Have no effect on total assets and decrease net income.
d. Have no effect on total assets and net income.

2) As a result of the November 30 adjusting entry to provide for bad debts, the allowance for doubtful accounts will

a.Increase by $30,000.
b.Increase by $25,500.
c.Increase by $22,500.
d.Decrease by $22,500.

Reference no: EM13604845

Questions Cloud

In a study to investigate the effect of the color paper : in a study to investigate the effect of the color paper blue green orange on response rates for questionnaires

A charge experiences a 050- nforce in the positive : a charge experiences a 0.50- nforce in the positive direction a . if this charge is replaced with a charge find the

If p 400 and the coefficient of kinetic friction between : if p 400 and the coefficient of kinetic friction between the 50- crate and the inclined plane is 0.25 determine the

So if you have a variance of 75 for a class average with a : so if you have a variance of 75 for a class average with a standard deviation of - 15. what grade will 96 of the class

The balance in accounts receivable at the beginning of 2011 : 1.the balance in accounts receivable at the beginning of 2011 was 600. during 2011 3200 of credit sales were recorded.

A hot dog vendor provides onions relish mustard ketchup : a hot dog vendor provides onions relish mustard ketchup dijon ketchup and hot peppers for your hot dog. how many

Which one of the following activities best exemplify : which one of the following activities best exemplify working capital management. for this exercise you will be choosing

If you have available several 30-uf capacitors each : if you have available several 3.0-uf capacitors each capable of withstanding 200v without breakdown how would you

Determine the heat that must be extracted to cool the gas : three moles of an ideal gas with temperature-independent cp 72r cv 52r is contained in a horizontal pistoncylinder

User Account

All Pages