ACCOUNTS RECEIVABLE 1 - QUIZ

1. When a sale is made with the credit terms of 2/10, net 30, the "10" refers to the __________ period.

2.On June 1, P800 of goods are sold with credit terms of 1/10, n/30. How much should the seller expect
to receive if the buyer pays on June 8? P720; P784; P792; P800

3.On June 1, P800 of goods are sold with credit terms of 1/10, n/30. On June 3 the customer returned
P100 of the goods. How much should the seller expect to receive if the buyer pays on June 8? P692
;P693; P700; P792

4. With credit terms of 2/10, n/30, the annual interest rate for paying in 10 days instead of 30 days is
closest to: 2%; 24%; 30%; 36%

5.When the terms of a sale are FOB __________, ownership of goods will transfer to the customer at
the customer's dock.

6. The seller is responsible for the costs of shipping its goods to the buyer when the terms of the sale are
FOB: Destination; Shipping Point

7. The buyer is responsible for the costs of shipping when goods are sold with the terms FOB:
Destination ; Shipping Point

8. When the Allowance for Doubtful Accounts appears on a company's financial statements, its balance
will be a __________ balance. Debit OR Credit

9. On which financial statement would you expect to find Allowance for Doubtful Accounts? Balance
Sheet OR Income Statement

10. Which method of reporting losses on accounts receivable is required in the U.S. for income tax
purposes? Allowance or Direct Write-off

11. Which method of reporting losses on accounts receivable is to be used for financial reporting?
Allowance OR Direct Write-off

12. The seller of goods that is offering credit terms of net 30 days will likely be one of its customer's
__________ creditors until it receives payment. Secured OR Unsecured

13. After several years of operations, a company's Bad Debts Expense for a given year is likely to be the
same as its balance in Allowance for Doubtful Accounts. True OR False

14. A company estimates that P20,000 of its P500,000 of accounts receivable will be uncollectible. Its
Allowance for Doubtful Accounts presently has a credit balance of P8,000. The adjusting entry will
include a __________ to the Allowance for Doubtful Accounts. Debit Of P12,000; Credit Of P12,000;
Debit Of P28,000; Credit Of P28,000

15. A company estimates that P20,000 of its P500,000 of accounts receivable will be uncollectible. Its
Allowance for Doubtful Accounts presently has a credit balance of P18,000. The adjusting entry will
include a __________ to Bad Debts Expense. : Debit Of P2,000 ; Credit Of P2,000; Debit Of P38,000
Credit Of P38,000

16. A company estimates that P20,000 of its P500,000 of accounts receivable will be uncollectible. Its
Allowance for Doubtful Accounts presently has a debit balance of P3,000. The adjusting entry will
include a __________ to Allowance for Doubtful Accounts. Debit Of P3,000 Credit Of P3,000; Debit Of
P17,000; Credit Of P17,000; Debit Of P23,000; Credit Of P23,000

Use the following information for questions 17-21: A company is expecting thousands of credit sales
transactions each week with terms of net 30 days. The company uses the allowance method and it
prepares weekly financial statements. It believes that 0.001 of its credit sales will be uncollectible. The
company's credit sales for its first week of operations are P500,000. The credit sales for its second week
are P600,000.

17. The company's bad debts expense for its first week of operations will be P __________.

18. The balance in Allowance for Doubtful Accounts at the end of the first week will likely be P
__________.

19. The company's bad debts expense for its second week of operations will be P __________.

20.The amount of accounts receivable that you expect will be written off by the end of the company's
second week of operations is P __________.

21.The balance in Allowance for Doubtful Accounts at the end of the second week of operations will
likely be P__________.

Use the following information for questions 22-25: A company's Allowance for Doubtful Accounts has a
credit balance of P25,000. It learns that one of its accounts receivable amounting to P1,800 is worthless
and needs to be written off.

22. Which account should be debited for P1,800 when writing off the account? Allowance For Doubtful
Accounts; Accounts Receivable; Bad Debts Expense

23. Which account should be credited for P1,800 when writing off the account? Allowance For Doubtful
Accounts; Accounts Receivable; Bad Debts Expense

24. Assuming that after the account is written off, the supplier receives full payment from the customer.
Which account will not be involved in the accounting entries made at the time when the payment is
received? Allowance For Doubtful Accounts; Accounts Receivable; Bad Debts Expense

25. Under the direct write off method, which account is debited when a company writes off one of its
accounts receivable? Allowance For Doubtful Accounts; Accounts Receivable; Bad Debts Expense