Multiple Choice Questions:

1. An aging of a company's accounts receivable indicates that $4,500 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a

a) Debit to Bad Debt Expense for $3,300.

b) Debit to Allowance for Doubtful Accounts for $3,300.

c) Credit to Allowance for Doubtful Accounts for $4,500.

d) Debit to Bad Debt Expense for $4,500.

2. The financial statements of the Melton Manufacturing Company reports net sales of $300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year and end of year, respectively. What is the average collection period for accounts receivable in days?

a) 48.7

b) 36.5

c) 96.1

d) 60.8

3. Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount by the manufacturer. They paid $400 for shipping and sales tax of $3,000. Stine estimates that the machinery will have a useful life of 10 years and a residual value of $20,000. If Stine uses straight-line depreciation, annual depreciation will be

a) $4,100

b) $4,072

c) $6,100.

d) $3,760

4. On January 1, a machine with a useful life of five years and a residual value of $40,000 was purchased for $120,000. What is the depreciation expense for year 2 under the double-declining-balance method of depreciation?

a) $38,400

b) $23,040

c) $28,800

d) $48,000

Answer rating: 100% (QA)

1 a Debit to ... View the full answer