When a company using the allowance method writes off a specific customer's account receivable, which of the following statements are true? Total expenses remain the same. Total stockholders' equity remains the same. Total assets remain the same. None of the above.

Total stockholders' equity remains the same.

When using the allowance method, as Bad Debt Expense is recorded, which of the following statements is true? Total liabilities increase and stockholders' equity decreases. Total assets increase and stockholders' equity decreases. Total assets decrease and stockholders' equity decreases. Total assets remain the same and stockholders' equity remains the same.

Total assets remain the same and stockholders' equity remains the same.

For Carefree Company using the aging of accounts receivable method, what does the estimate of uncollectible receivables equal? The ending balance in the Allowance for Doubtful Accounts for the period. The change in the Allowance for Doubtful Accounts for the period. Both (a) and (c). Bad Debt Expense for the current period.

The change in the Allowance for Doubtful Accounts for the period.

Which of the following best describes the proper presentation of accounts receivable in the financial statements? Accounts Receivable in the asset section of the balance sheet and the Allowance for Doubtful Accounts in the expense section of the income statement. Accounts Receivable plus the Allowance for Doubtful Accounts in the asset section of the balance sheet. Accounts Receivable less Bad Debt Expense in the asset section of the balance sheet. Accounts Receivable less the Allowance for Doubtful Accounts in the asset section of the balance sheet.

Accounts Receivable less the Allowance for Doubtful Accounts in the asset section of the balance sheet.

If 5 percent notes receivable for $100,000 are created on January 1, 2021, what interest revenue will be recorded in 2021? No interest revenue will be recorded in 2021. The notes receivable will be classified as a current asset. None of the above. Interest Revenue of $5,000 will be recorded in 2021.

Interest Revenue of $5,000 will be recorded in 2021.

If the receivables turnover ratio decreased during the year, what does this indicate about receivables collections? Sales Revenues increased at a faster rate than Accounts Receivable increased. The days to collect also decreased. Receivables collections slowed down. None of the above.

Receivables collections slowed down.

In 2018, Coca-Cola Bottling had a receivables turnover ratio of 9.0. Which action could increase this ratio? Increase the percentages used to estimate bad debts. Factor its receivables. All of the above. Pursue collections more aggressively.

Pursue collections more aggressively.

Accounts Receivable Accounting: Allowance Method, Bad Debt, and Financial Reporting

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Finance - Personal Finance

michael1tekrzp Created by 10 mon ago

Cards in this deck(39)

When a company using the allowance method writes off a specific customer's account receivable, which of the following statements are true?

When using the allowance method, as Bad Debt Expense is recorded, which of the following statements is true?

For Carefree Company using the aging of accounts receivable method, what does the estimate of uncollectible receivables equal?

Which of the following best describes the proper presentation of accounts receivable in the financial statements?

If the Allowance for Doubtful Accounts opened with a $10,000 credit balance, had write-offs of $5,000, and a desired ending balance of $20,000, what was the Bad Debt Expense?

When an account receivable is 'recovered', what is the impact on total assets?

If 5 percent notes receivable for $100,000 are created on January 1, 2021, what interest revenue will be recorded in 2021?

If the receivables turnover ratio decreased during the year, what does this indicate about receivables collections?

In 2018, Coca-Cola Bottling had a receivables turnover ratio of 9.0. Which action could increase this ratio?

If VFC incurs a 3 percent fee to factor $10,000 of its Accounts Receivable, how will its Net Income change?

Which of the following should be capitalized when acquiring a piece of production equipment for a factory?

When recording depreciation, which of the following statements is true?

Under what depreciation method(s) is an asset's book value used to calculate depreciation each year?

To report the highest earnings possible according to GAAP, how should a company estimate depreciation?

A building was purchased with an estimated useful life of 20 years and a residual value of $20,000. If the Depreciation Expense for that year was $20,000, what was the original cost of the building?

Thornton Industries purchased a machine on July 1 for $45,000, depreciating it over 10 years with a residual value of $3,000. What is the Depreciation Expense for the year ended December 31?

ACME, Inc. sold a used piece of machinery for $7,500. If the Accumulated Depreciation was $4,000 and the original cost was $10,000, what was the gain or loss on disposal?

What assets should be amortized using the straight-line method?

How many of the following statements regarding goodwill are true: Goodwill is not reported unless purchased in an exchange, private companies can elect to amortize goodwill over 10 years or less, impairment of goodwill results in a decrease in net income?

The Simon Company and the Allen Company bought trucks for $30,000 each. Two years later, Simon's truck had a lower book value. What explains this difference?

Which of the following best describes Accrued Liabilities?

As of December 31, 2018, Shutterfly, Inc. had deductions for FICA taxes of $612,000. Which statement is true regarding this pay period?

How should PVH present its $100,000 debt, to be repaid over five years, on the balance sheet?

Which of the following does not impact the calculation of the cash interest payments to bondholders?

Which of the following is false when a bond is issued at a premium?

To determine if a bond will be issued at a premium, discount, or face value, what information is needed?

A bond is issued at a price of 103 and retired early at a price of 97. Which of the following is true?

Land O' Lakes, Inc. reported Income from Operations of $206 million, Net Income of $160 million, Interest Expense of $63 million, and Income Tax Expense of $15 million. What was the times interest earned ratio?

Big Hitter Corp. faces a possible $2,000,000 settlement. How should this be reported in the financial statements?

Which feature is not applicable to common stock ownership?

Which statement regarding treasury stock is false?

Which of the following statements about stock dividends is true?

Which of the following is ordered from the largest number of shares to the smallest number of shares?

Which of the following statements about the relative advantages of equity and debt financing is false?

A journal entry is not recorded on what date?

Which of the following transactions will increase the return on equity?

Which statement regarding dividends is false?

When stock is purchased with cash and held in treasury, what is the impact on the balance sheet equation?

In what situation does total stockholders' equity decrease?

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