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35 Cards in this Set

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All money claims against other entities, including people, business firms, and other organizations.
ch8
receivables
A receivable created by selling merchandise or services on credit.
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accounts receivable
Amounts customers owe, for which a formal, written instrument of credit has been issued.
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notes receivable
The operating expense incurred because of the failure to collect receivables.
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uncollectible accounts expense
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
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
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
The amount that is due at the maturity or due date of a note.
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maturity value
A note that the maker fails to pay on the due date.
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dishonored note receivable
An estimate of the length of time the accounts receivable have been outstanding.
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number of days' sales in receivables
Measures how frequently during the year the accounts receivable are being converted to cash.
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accounts receivable turnover
A written promise to pay a sum of money on demand or at a definite time.
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promissory note
All money claims against other entities, including people, business firms, and other organizations are called _____________.
receivables
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 __________.
$7,150
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
The maturity value of a $300,000, 90-day, 12% note receivable is _______.
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$309,000
The due date of a 90-day note receivable dated July 12 is ________.
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Oct 10
A note that the maker fails to pay on the due date is referred to as a(n)_________ note.
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dishonored
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
The _______method of accounting for uncollectible accounts provides an expense for uncollectible receivables in advance of their write-off.
allowance
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
______ ______ ______ measures how frequently during the year the accounts receivable are being converted to cash.
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accounts receivable turnover
The maturity value of a $150,000, 60-day, 15% note receivable is __________.
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$153,750
The due date of a 120-day note receivable dated on August 18 is ____________.
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December 16
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
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
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d. The allowance for doubtful accounts is a contra asset account, normally with a credit balance.
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
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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).
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
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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.
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
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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.
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
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
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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).
On a promissory note, the one making the promise to pay is called the _________.
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maker
The amount that is due on a note at the maturity or due date is called the _______.
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maturity value
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.
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 ________.
ch8
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%)]