If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

a. Uncollectible Accounts Expense
b. Allowance for Doubtful Accounts
c. Accounts Receivable
d. Interest Expense

The direct write-off method of accounting for uncollectible receivables is.

A. an example of the balance sheet approach.

B. an example of the income statement approach.

C. not in conformity with GAAP.

D. in conformity with the matching principle.

A borrower has two alternatives for a loan: (1) issue a $150,000, 45-day, 4% note or (2) issue a$150,000, 45-day note that the creditor discounts at 4%. Calculate the amount of the interest expense for each option.

Indications that an account may be uncollectible include all of the following except:

a. the customer closes its business

b. customer files for bankruptcy

c. customer can not be located

d. customer is making small but regular payments

Under the Sarbanes-Oxley Act, management is responsible for:

a. The reliability of financial statements.
b. Increasing the company's stock price.
c. Analysts' having positive comments about the company's operations.
d. All of the other answers represent management responsibilities under the Sarbanes-Oxley Act.

The two methods of accounting for uncollectible accounts receivable are ________.

When using the direct write off method of accounting for uncollectible receivables the account allowance for doubtful accounts is debited when a specific account is determined to be uncollectible.

The amount of the promissory note plus the interest earned on the due date is called the:

a. realizable value

b. maturity value

c. face value

d. net realizable value

Required

Indicate whether the freight term is FOB destination or FOB shipping point.

• Sold merchandise and the buyer paid the freight costs.

Two methods of accounting for uncollectible accounts are the

a. direct write-off method and the allowance method
b. allowance method and the accrual method
c. allowance method and the net realizable method
d. direct write-off method and the accrual method

Using the estimate based on sales method of accounting for uncollectible accounts, the entry to reinstate a specific receivable previously written off would include a

a. credit to bad debt expense

b. credit to accounts receivable

c. debit to allowance for doubtful accounts

d. debit to accounts receivable

Analyze each of the following transactions by showing the effects on the accounting equation specifically, identify the accounts and amounts (including + or -) for each transaction.

b. The company estimates that $800 of its accounts receivable is uncollectible.

A company that uses the allowance method to account for uncollectible accounts:
a. records uncollectible accounts expense when a receivable is written off.
b. does not record uncollectible accounts until the amount becomes significant.
c. reports the net realizable value of its accounts receivable on the balance sheet.
d. None of these answer choices are correct.

What kind of an account is Allowance for Doubtful Accounts, and is its normal balance a debit or a credit?