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35 Cards in this Set
- Front
- Back
All money claims against other entities, including people, business firms, and other organizations.
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receivables
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A receivable created by selling merchandise or services on credit.
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accounts receivable
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Amounts customers owe, for which a formal, written instrument of credit has been issued.
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notes receivable
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The operating expense incurred because of the failure to collect receivables.
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uncollectible accounts expense
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The method of accounting for uncollectible accounts that provides an expense for uncollectible receivables in advance of their write-off.
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allowance method
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The method of accounting for uncollectible accounts that recognizes the expense only when accounts are judged to be worthless.
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direct write-off method
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The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age.
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aging the receivables
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The amount that is due at the maturity or due date of a note.
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maturity value
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A note that the maker fails to pay on the due date.
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dishonored note receivable
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An estimate of the length of time the accounts receivable have been outstanding.
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number of days' sales in receivables
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Measures how frequently during the year the accounts receivable are being converted to cash.
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accounts receivable turnover
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A written promise to pay a sum of money on demand or at a definite time.
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promissory note
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All money claims against other entities, including people, business firms, and other organizations are called _____________.
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receivables
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Allowance for Doubtful Accounts has a debit balance of $1,500 at the end of the year, before adjustments. Sales for the year amounted to $740,000, and sales returns and allowances amounted to $25,000. If uncollectible accounts expense is estimated at 1% of net sales, the amount of the appropriate adjusting entry will be __________.
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$7,150
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Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year, before adjustments. Sales for the year amounted to $950,000, and sales returns and allowances amounted to $20,000. If the analysis of the accounts in the customers' ledger indicates doubtful accounts of $30,000, the amount of the appropriate adjusting entry will be ___________.
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$32,500
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The maturity value of a $300,000, 90-day, 12% note receivable is _______.
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$309,000
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The due date of a 90-day note receivable dated July 12 is ________.
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Oct 10
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A note that the maker fails to pay on the due date is referred to as a(n)_________ note.
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dishonored
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A(n)_______ _______is a formal, written instrument of credit that has been received for the amount a customer owes.
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note receivable
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The _______method of accounting for uncollectible accounts provides an expense for uncollectible receivables in advance of their write-off.
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allowance
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The ________ _____ ________ is a process of analyzing the accounts receivable and classifying them according to various age groupings, witht he due date being the base point for determining age.
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aging of receivables
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______ ______ ______ measures how frequently during the year the accounts receivable are being converted to cash.
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accounts receivable turnover
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The maturity value of a $150,000, 60-day, 15% note receivable is __________.
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$153,750
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The due date of a 120-day note receivable dated on August 18 is ____________.
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December 16
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A written promise to pay a sum of money on demand or at a definite time is called a(n)____________note.
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promissory
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What is the type of account and normal balance of Allowance for Doubtful Accounts?
a) asset, debit b) asset, credit c) contra asset, debit d) contra asset, credit ch8 |
d. The allowance for doubtful accounts is a contra asset account, normally with a credit balance.
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Assume that the allowance account has a credit balance of $170 at the end of the year, before adjustments. If the estimate of uncollectible accounts based on aging the receivables is $3,010, the amount of the adjusting entry for uncollectible accounts would be:
a) $170 b) $2,840 c) $3.010 d) $3,180 ch8 |
b. If the allowance account has a credit balance of $170 at the end of the year before ajudtments and if the estimate of uncollectible accounts based on aging the receivables is $3,010, the amount of the adjusting entry for uncollectible accounts is $2,840 ($3,010-$170).
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Assume that the allowance account has a debit balance of $250 at the end of the year, before adjustments. If the estimate of uncollectible accounts based on sales for the period is $2,200, the amount of the adjusting entry for uncollectible accounts would be:
a) $250 b) $1,950 c) $2,200 d) $2,450 ch8 |
c. If the allowance account has a debit balance of $250 at the end of the year befoe adjustments and if the estimate of uncollectible accounts based on sales for the period is $2,200, the amount of the adjusting entry for uncollectible accounts is $2,200. The balance of the allowance account does not affect the amount of the adjusting entry when th estimate is based upon sales.
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When the direct write-off method is used in accounting for uncollectible accounts, any uncollectible account is written off against the:
a) allowance account b) sales account c) accounts receivable account d) uncollectible accounts expense account ch8 |
a. incorrect. When the allowance method is used in accounting for uncollectible accounts, any uncollectible account is written off against the allowance account.
d. Correct. When the direct write-off is used in accounting for uncollectible accounts, any uncollectible account is written off against the uncollectible accounts expense account. The entry is a debit to the uncollectible accounts expense account and a credit to the accounts receivable account. |
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When the allowance method is used in accounting for uncollectible accounts, any uncollectible account is written off against the:
a) allowance account b) sales account c) accounts receivable account d) uncollectible accounts expense account ch8 |
a. correct. When the allowance method is used in accounting for uncollectible accounts, any uncollectible account is written off against the allowance account. The entry is a debit to the allowance account and a credit to the accounts receivable account.
d)incorrect. When the direct write-off method is used in accounting |
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after the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $430,000 and Allowance for Doubtful Accounts has a balance of $25,000. What is the expected realizable value of the accounts receivable?
a) $25,000 b) $405,000 c) $430,000 d) $455,000 ch8 |
b. After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $430,000 and Allowance for Doubtful Accounts has a balance of $25,00. The expected realizable value of the accounts receivable is $405,000 ($430,000-$25,000).
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On a promissory note, the one making the promise to pay is called the _________.
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maker
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The amount that is due on a note at the maturity or due date is called the _______.
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maturity value
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The due date of a 90-day note dated July 1 is ______.
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The due date of a 90-day note dated July 1 is September 29, determined as follows: 30days in July; 31 days in August; and 29 days in September.
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A 60-day, 12% note for $15,000, dated May 1, is received from a customer on account. The maturity value of the note is ________.
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The maturity value of a 60-day, 12% note for $15,000, dated May 1, is $15,300 computed as follows: [$15,000+($15,000x60/360 x 12%)]
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