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What is the net effect of a collection of an account

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Question 1 - On January 1, 2016, Colt Co. issued ten-year bonds with a face amount of $1,000,000 and a stated interest rate of 6% payable annually on January 1. The bonds were priced to yield 8%. The approximate total issue price of the bonds was:

a. $1,122,888

b. $886,996

c. $1,134,198

d. $865,795

e. $1,147,202

Question 2 - When the allowance method of recognizing uncollectible accounts is used, what is the net effect of a collection of an account previously written off on gross Accounts Receivable and Bad Debt Expense, respectively?

a. Increase, Decrease

b. Increase, No Effect

c. No Effect, Decrease

d. No Effect, Increase

Question 3 - Which income statement line item will appear if the "Net" method of accounting for discounts is used, but not the "Gross" method?

a. Gross Profit

b. Purchase Discounts

c. Cost of Goods Sold

d. Freight-Out

e. Purchase Discounts Lost

e. No Effect, No Effect

Reference no: EM132479895

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