86. Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited
a.when a credit sale is past due.
b.at the end of each accounting period.
c.whenever a pre-determined amount of credit sales have been made.
d.when an account is determined to be uncollectible.
87. An alternative name for Bad Debt Expense is
a.Deadbeat Expense.
b.Uncollectible Accounts Expense.
c.Collection Expense.
d.Credit Loss Expense.
88. A reasonable amount of uncollectible accounts is evidence
a.that the credit policy is too strict.
b.that the credit policy is too lenient.
c.of a sound credit policy.
d.of poor judgments on the part of the credit manager.
89. Bad Debt Expense is considered
a.an avoidable cost in doing business on a credit basis.
b.an internal control weakness.
c.a necessary risk of doing business on a credit basis.
d.avoidable unless there is a recession.
90. The best managed companies will have
a.no uncollectible accounts.
b.a very strict credit policy.
c.a very lenient credit policy.
d.some accounts that will prove to be uncollectible.
91. Two methods of accounting for uncollectible accounts are the
a.allowance method and the accrual method.
b.allowance method and the net realizable method.
c.direct write-off method and the accrual method.
d.direct write-off method and the allowance method.
92. The allowance method of accounting for uncollectible accounts is required if
a.the company makes any credit sales.
b.bad debts are significant in amount.
c.the company is a retailer.
d.the company charges interest on accounts receivable.
93. Bad Debt Expense is sometimes called
a.Allowance for Doubtful Accounts.
b.Loss from Default.
c.Uncollectible Accounts Expense.
d.None of these answer choices are correct.
94. When the allowance method of accounting for uncollectible accounts is used, Bad Debts Expense is recorded
a.in the year after the credit sale is made.
b.in the same year as the credit sale.
c.as each credit sale is made.
d.when an account is written off as uncollectible.
95. The method of accounting for uncollectible accounts that results in a better matching of expenses with revenues is the
a.aging accounts receivable method.
b.direct write-off method.
c.percentage of receivables method.
d.percentage of sales method.