john smith
New member
$500,000 and accounts receivable? 1) The financial statements of Hudson Manufacturing Company report net sales of $500,000 and accounts receivable
a.29.2
b.36.5
c.21.9
d.52.1
2) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $500,000 and credit sales are $2,000,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
A. Bad Debts Expense25,000
Allowance for Doubtful Accounts 25,000
B. Bad Debts Expense20,000
Allowance for Doubtful Accounts 20,000
C. Bad Debts Expense25,000
Accounts Receivable 25,000
D. Bad Debts Expense20,000
Accounts Receivable 20,000
3) Black Company provides for bad debts expense at the rate of 2% of credit sales. The following data are available for 2010:
Allowance for doubtful accounts, 1/1/10 (Cr.)$10,500
Accounts written off as uncollectible during 20106,500
Credit sales in 20101,500,000
The Allowance for Doubtful Accounts balance at December 31, 2010, should be:
A. $34,000
B. $30,000
C. $25,000
D. $6,500
4) When a note is accepted to settle an open account, Notes Receivable is debited for the note's
A. maturity value.
B. face value.
C. net realizable value.
D. face value plus interest.
5) The best managed companies will have
A. a very lenient credit policy.
B. some accounts that will prove to be uncollectible.
C. no uncollectible accounts.
D. a very strict credit policy.
6) Notes receivable are recognized in the accounts at
A. maturity value.
B. cash (net) realizable value.
C. face value.
D. gross realizable value.
7) The maturity value of a $90,000, 10%, 60-day note receivable dated July 3 is
A. $90,000.
B. $105,000.
C. $91,500.
D. $99,000.
8) The balance of Allowance for Doubtful Accounts prior to making the adjusting entry to record estimated uncollectible accounts
A. is relevant when using the percentage of receivables basis.
B. is relevant to both bases of adjusting for uncollectible accounts.
C. is relevant when using the percentage of sales basis.
D. will never show a debit balance at this stage in the accounting cycle.
9) Parks Company receives a $5,000, 3-month, 8% promissory note from Todd Company in settlement of an open accounts receivable. What entry will Parks Company make upon receiving the note?
A. Notes Receivable5,000
Accounts Receivable-Todd Company 5,000
B. Notes Receivable5,100
Accounts Receivable-Todd Company 5,000
Interest Revenue 100
C. Notes Receivable5,000
Interest Receivable100
Accounts Receivable-Todd Company 5,000
Interest Revenue 100
D. Notes Receivable5,100
Accounts Receivable-Todd Company 5,100
10) Two bases for estimating uncollectible accounts are:
A. percentage of receivables and percentage of total revenue.
B. percentage of current assets and percentage of sales.
C. percentage of assets and percentage of sales.
D. percentage of receivables and percentage of sales.
11) The financial statements of Hudson Manufacturing Company report net sales of $500,000 and accounts receivable of $50,000 and $30,000 at the beginning and end of the year, respectively. What is the receivables turnover ratio for Hudson?
A. 7 times
B. 10 times
C. 12.5 times
D. 16.7 times
a.29.2
b.36.5
c.21.9
d.52.1
2) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $500,000 and credit sales are $2,000,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
A. Bad Debts Expense25,000
Allowance for Doubtful Accounts 25,000
B. Bad Debts Expense20,000
Allowance for Doubtful Accounts 20,000
C. Bad Debts Expense25,000
Accounts Receivable 25,000
D. Bad Debts Expense20,000
Accounts Receivable 20,000
3) Black Company provides for bad debts expense at the rate of 2% of credit sales. The following data are available for 2010:
Allowance for doubtful accounts, 1/1/10 (Cr.)$10,500
Accounts written off as uncollectible during 20106,500
Credit sales in 20101,500,000
The Allowance for Doubtful Accounts balance at December 31, 2010, should be:
A. $34,000
B. $30,000
C. $25,000
D. $6,500
4) When a note is accepted to settle an open account, Notes Receivable is debited for the note's
A. maturity value.
B. face value.
C. net realizable value.
D. face value plus interest.
5) The best managed companies will have
A. a very lenient credit policy.
B. some accounts that will prove to be uncollectible.
C. no uncollectible accounts.
D. a very strict credit policy.
6) Notes receivable are recognized in the accounts at
A. maturity value.
B. cash (net) realizable value.
C. face value.
D. gross realizable value.
7) The maturity value of a $90,000, 10%, 60-day note receivable dated July 3 is
A. $90,000.
B. $105,000.
C. $91,500.
D. $99,000.
8) The balance of Allowance for Doubtful Accounts prior to making the adjusting entry to record estimated uncollectible accounts
A. is relevant when using the percentage of receivables basis.
B. is relevant to both bases of adjusting for uncollectible accounts.
C. is relevant when using the percentage of sales basis.
D. will never show a debit balance at this stage in the accounting cycle.
9) Parks Company receives a $5,000, 3-month, 8% promissory note from Todd Company in settlement of an open accounts receivable. What entry will Parks Company make upon receiving the note?
A. Notes Receivable5,000
Accounts Receivable-Todd Company 5,000
B. Notes Receivable5,100
Accounts Receivable-Todd Company 5,000
Interest Revenue 100
C. Notes Receivable5,000
Interest Receivable100
Accounts Receivable-Todd Company 5,000
Interest Revenue 100
D. Notes Receivable5,100
Accounts Receivable-Todd Company 5,100
10) Two bases for estimating uncollectible accounts are:
A. percentage of receivables and percentage of total revenue.
B. percentage of current assets and percentage of sales.
C. percentage of assets and percentage of sales.
D. percentage of receivables and percentage of sales.
11) The financial statements of Hudson Manufacturing Company report net sales of $500,000 and accounts receivable of $50,000 and $30,000 at the beginning and end of the year, respectively. What is the receivables turnover ratio for Hudson?
A. 7 times
B. 10 times
C. 12.5 times
D. 16.7 times