Multiple Choice Questions
33.The year-end adjusting entry to recognize uncollectible accounts expense will
A. increase assets and decrease equity.
B. decrease assets and decrease equity.
C. increase liabilities and increase equity.
D. decrease liabilities and increase equity.
34.On January 1, 2013, the Accounts Receivable balance was $18,500 and the balance in the Allowance for Doubtful Accounts was $1,400. On January 15, 2013 a $400 uncollectible account was written-off. The net realizable value of accounts receivable immediately after the write-off is:
A. $18,100.
B. $16,700.
C. $17,100.
D. $17,500.
On January 1, 2013 Garcia Company had an $8,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During 2013, Garcia provided $52,000 of service on account. The company collected $48,500 cash from account receivable. Uncollectible accounts are estimated to be 2% of sales on account.
35.Based on this information, the amount of cash flow from operating activities that would appear on the 2013 statement of cash flows is:
A. $47,530.
B. $52,000.
C. $44,760.
D. $48,500.
36.The amount of uncollectible accounts expense recognized on the 2013 income statement is:
A. $160.
B. $500.
C. $970.
D. $1,040.
37.The amount of uncollectible accounts expense recognized on the 2011 income statement was
A. $2,040.
B. $660.
C. $2,850.
D. $27,000.
38.The net realizable value of Morgan's receivables at the end of 2011 was
A. $24,150.
B. $24,960.
C. $29,850.
D. $27,000.
39.The balance in Accounts Receivable at the beginning of the period amounted to $1,600. During the period $6,400 of credit sales were made to customers. If the ending balance in Accounts Receivable amounted to $1,000, and uncollectible accounts expense amounted to $400, then the amount of cash inflow from customers that would appear in the operating section of the cash statement would be:
A. $6,600.
B. $6,400.
C. $8,000.
D. None of these.
On January 1, 2013, Karma Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $62,000 and $1,000, respectively. During the year Karma reported $145,000 of credit sales. Karma wrote off $1,100 of receivables as uncollectible in 2013. Cash collections of receivables amounted to $149,100. Karma estimates that it will be unable to collect one percent (1%) of credit sales.
40.The amount of uncollectible accounts expense recognized in the 2013 income statement will be:
A. $1,450.
B. $620.
C. $1,491.
D. $1,100.
41.Karma's entry to recognize the write-off of the uncollectible accounts will
A. increase total assets and total equity.
B. increase total assets and decrease total equity.
C. decrease total assets and total equity.
D. not affect total assets or total equity.