2122-1 FA Quiz A/R

Total points23/25
The respondent's email (jhe.silfavan@wvsu.edu.ph) was recorded on submission of this form.

 
The two methods of accounting for uncollectible accounts are the direct write-off
method and the 1/1

Allowance Method
Bad Debt Method
Accrual Method
Net Realizable Method

 
Under the direct write-off method of accounting for uncollectible accounts, Bad Debt
Expense is debited1/1

when a credit sale is past due.

when an account is determined to be uncollectible.  
at the end of each accounting period.
whenever a pre-determined amount of credit sales have been made.

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

Credit
Discount
Accounting
Maturity

 
On June 1, P8000 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? 1/1

P7920
P7200
P8000
P7840

 
On June 1, P8000 of goods are sold with credit terms of 1/10, n/30. On June 3 the
customer returned P1000 of the goods. How much should the seller expect to receive
if the buyer pays on June 8? 1/1

P7000
P6920
P7920
P6930
 
When the Allowance for Doubtful Accounts appears on a company's financial
statements, its balance will be a __________ balance. 1/1

Running
Debit
None of these
Credit
 
On which financial statement would you expect to find Allowance for Doubtful
Accounts? 1/1

Income Statement
Statement of Cash Flows
Statement of Changes in Equity
Balance Sheet
 
Which method of reporting losses on accounts receivable is required for income tax
purposes? 1/1

Direct Write-off  
Allowance
None of these
Aging of accounts

 
Which method of reporting losses on accounts receivable is to be used for financial
reporting? 1/1

Aging of accounts
Allowance
Direct Write-off
None of these

 
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. 0/1

Credit Of P12,000
Debit Of P12,000
Credit Of P28,000
Debit Of P28,000

Correct answer
Credit Of P12,000

 
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. 1/1

Credit Of P38,000
Debit Of P2,000
Credit Of P2,000
Debit Of P38,000

 
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. 1/1

Credit Of P23,000  
Debit Of P3,000
Debit Of P17,000
Credit Of P17,000
Debit Of P23,000
Credit Of P3,000

 
Which account should be debited for P1,800 when writing off the account? 0/1
Bad Debts Expense
Accounts Receivable
None of these
Allowance For Doubtful Accounts

Correct answer
Allowance For Doubtful Accounts
 
Which account should be credited for P1,800 when writing off the account? 1/1

Allowance For Doubtful Accounts

Accounts Receivable
None of these
Bad Debts Expense

 
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? 1/1

Allowance For Doubtful Accounts

Bad Debts Expense
Accounts Receivable
None of these

 
Under the direct write off method, which account is debited when a company writes off
one of its accounts receivable? 1/1

Accounts Receivable
Allowance For Doubtful Accounts
Bad Debts Expense
None of these
 
An aging of a company's accounts receivable indicates that P6,000 are estimated to
be uncollectible. If Allowance for Doubtful Accounts has a P2,000 debit balance, the
adjustment to record bad debts for the period will require a 1/1

debit to Bad Debt Expense for P8,000.

debit to Allowance for Doubtful Accounts for P8,000.
debit to Bad Debt Expense for P4,000.
credit to Allowance for Doubtful Accounts for P4,000.

 
A debit balance in the Allowance for Doubtful Accounts 1/1

is the normal balance for that account.

indicates that actual bad debt write-offs have exceeded previous provisions for bad debts.
indicates that actual bad debt write-offs have been less than what was estimated.
cannot occur if the percentage of receivables method of estimating bad debts is used.

 
Using the percentage-of-receivables method for recording bad debt expense,
estimated uncollectible accounts are P45,000. If the balance of the Allowance for
Doubtful Accounts is P6,000credit before adjustment, what is the amount of bad debt
expense for that period? 2/2

P45,000
P39,000  
P51,000
P6,000

 
Using the percentage-of-receivables method for recording bad debt expense,
estimated uncollectible accounts are P45,000. If the balance of the Allowance for
Doubtful Accounts is P6,000debit before adjustment, what is the balance after
adjustment?2/2

P45,000  
P39,000
P51,000
P6,000

 
Non-trade receivables should be reported separately from trade receivables. Why is
this statement either true or false? 1/1

It is true because trade receivables are current assets and non-trade receivables are long term.
It is false because all current receivables must be grouped together in one account.
It is true because non-trade receivables do not result from business operations and should
not be included with accounts receivable.
It is false because management can decide how to report receivables.

 
WWW Merchandising had net credit sales of P2,250,000 in year 2021. Allowance for
Doubtful Accounts on January 1, 2021 had a credit balance of P54,000. During 2021,
P90,000 of uncollectible accounts receivable were written off. Past experience
indicates that the allowance should be 10% of the balance in receivables (percentage
of receivables basis). If the accounts receivable balance at December 31 was
P600,000, what is the required adjustment to the Allowance for Doubtful Accounts at
December 31, 2021?2/2

P 60,000
P 25,000
P 96,000  
P 90,000