| 1. | c |
Remember
that any entry to the Accounts Receivable account also requires
an entry to a
subsidiary account. |
| 2. | b |
|
| 3. | d |
Only the
direct write-off method debits an expense at the time a receivable
is written off. |
| 4. | b |
$44,700 –
$1,500 = $43,200 |
| 5. | a |
Assets are
overstated because the credit to the allowance has not been
recorded, so net
accounts receivable is too high. Expenses are understated because the debit
to uncollectible
accounts expense has not been recorded. |
| 6. | b |
When a receivable
is written off, there is no expense recorded, so there is no
effect on net
income. There is also no change in net accounts receivable because
the Accounts Receivable
and allowance accounts are reduced by the same amount. |
| 7. | c |
With a $350
previous debit balance, a $2,350 credit is needed to end with
a $2,000 credit balance. |
| 8. | d |
Net
realizable value means the amount collectible. |
| 9. | b |
Both
Accounts Receivable and the Allowance for Uncollectible Accounts
are reduced by $450. |
| 10. | d |
|
| 11. | a |
($120,000
× .01) + ($45,000 × .03) + ($30,000 × .1)
+ ($10,000 × .6) = $11,550. |
| 12. | a |
$11,550 –
$900 = $10,650. The amount of the adjustment compensates for
the existing
allowance balance. |
| 13. | d |
|
| 14. | c |
($120,000
× .09 × 60)/360 = $1,800 |
| 15. |
a |
Use
T accounts to visualize: |
| |
| |
Accounts
Receivable |
| |
|
| |
|
| bal.
62,300 |
|
| |
|
|
|
Allowance
for
Uncollectible Accounts |
| |
bal.
1,000 |
| |
3,300 |
| 3,000 |
|
| |
1,300 |
|
|
|
| | |
The net realizable
value is $62,300 – $1,300 = $61,000. The $3,300 expense
(period-end
adjustment) creates a $3,300 credit entry into the allowance account. The
write-offs during
the year are debits to the allowance account. |
| 16. | b |
The collectible
value is called the net realizable value. |
| 17. | c | |
| 18. | c | |
