41) Y Company obtained the following balances from its computerized accounting information system at the end of the year
before
adjustments:
Accounts receivable$ 27,000
Allowance for uncollectible accounts (3,000)
Net sales100,000
Bad debts expense0
The company estimates that 20% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, bad debts expense for the year will be:
A) $2,400.
B) $4,800.
C) $5,400.
D) $20,000.
42) Y Company obtained the following balances from its computerized accounting information system at the end of the year
before
adjustments:
Accounts receivable$ 27,000
Allowance for uncollectible accounts (3,000)
Net sales100,000
Bad debts expense0
The company estimates that 2% of net sales will be uncollectible. After the correct adjusting entry has been made, what is the Net accounts receivable on the year-end balance sheet?
A) This is a trick question. Accounts receivable appear on the income statement, not the balance sheet.
B) $24,000
C) $22,000
D) $27,000
43) Y Company obtained the following balances from its computerized accounting information system at the end of the year
before
adjustments:
Accounts receivable$ 27,000
Allowance for uncollectible accounts 300this is a
positive
number
Net sales100,000
Bad debts expense0
The company estimates that 20% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, the allowance for uncollectible accounts will be:
A) $(2,400).
B) $(4,800).
C) $(5,400).
D) $(20,000).
44) Y Company obtained the following balances from its computerized accounting information system at the end of the year
before
adjustments:
Accounts receivable$ 27,000
Allowance for uncollectible accounts 300this is a
positive
number
Net sales100,000
Bad debts expense0
The company estimates that 20% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, bad debts expense for the year will be:
A) $5,100.
B) $5,700.
C) $5,400.
D) $20,300.
45) Y Company obtained the following balances from its computerized accounting information system at the end of the year
before
adjustments:
Accounts receivable$ 27,000
Allowance for uncollectible accounts 300this is a
positive
number
Net sales100,000
Bad debts expense0
The company estimates that 2% of net sales will be uncollectible. After the correct adjusting entry has been made, what is the net accounts receivable on the year-end balance sheet?
A) This is a trick question. Accounts receivable appear on the income statement, not the balance sheet.
B) $24,000
C) $25,300
D) $27,000
46) It is realistic for a firm to assume that 100% of accounts receivable will be collected.
47) The direct write-off method and the allowance method are methods used to adjust the balance in accounts receivable to reflect uncollectible accounts.
48) The direct write-off method provides a good match between the revenue (sale) and the bad debts expense, because the write-off is matched directly with the sale.
49) The allowance method provides a good match between the revenue (sale) and the bad debts expense, because the write-off is matched directly with the sale.
50) Corporations use the allowance method because it is required by GAAP.