H. Multiple Choice
Instructions: Place the appropriate choice in the blank.
	1. A note receivable due in 18 months is listed on the balance sheet under the caption
	a. long-term liabilities
	b. fixed assets
	c. current assets
	d. Investments
	2. Internal control over receivables is achieved when the employee who handles the accounting
	for receivables
	a. also is involved with the operating aspects of approving credit
	b. also is involved with the operating aspects of collecting receivables
	c. is not involved with the operating aspects of approving credit
	d. also is involved with authorizing adjustments to receivables
	3. The internal control objective most relevant to receivables is
	a. safeguard assets
	b. comply with laws and regulations
	c. operate efficiently
	d. assess risk
	4. The two methods of accounting for uncollectible receivables are the allowance method and the
	a. equity method
	b. direct write-off method
	c. interest method
	d. cost method
	5. If the allowance method of accounting for uncollectible receivables is used, what general ledger account
	is debited to write off a customer's account as uncollectible?
	a. Uncollectible Accounts Expense
	b. Allowance for Doubtful Accounts
	c. Accounts Receivable
	d. Interest Expense
	6. After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a
	balance of $450,000 and Allowance for Doubtful Accounts has a balance of $25,000. What is the
	net realizable value of the accounts receivable?
	a. $25,000
	b. $425,000
	c. $450,000
	d. $455,000
	7. If the allowance method of accounting for uncollectible receivables is used, what general ledger account
	is credited to write off a customer's account as uncollectible?
	a. Uncollectible Accounts Expense
	b. Accounts Receivable
	c. Allowance for Doubtful Accounts
	d. Interest Expense
	8. Allowance for Doubtful Accounts is listed on the balance sheet under the caption
	a. owner's equity
	b. Investments
	c. fixed assets
	d. current assets
	9. The balance in Allowance for Doubtful Accounts must be carefully considered prior to the end of the
	year adjustment when applying which method?
	a. direct write-off method
	b. estimate based on sales
	c. estimate based on an analysis of receivables
	d. both b. and c.
	10. Donovan Company uses the estimate based on analysis of receivables to account for uncollectible
	accounts. The company has determined that the Irish Company account is uncollectible.
	To write-off this account, Donovan should debit
	a. Bad Debts Expense and credit Accounts Receivable
	b. Bad Debts Expense and credit Allowance for Doubtful Accounts
	c. Allowance for Doubtful Accounts and credit Accounts Receivable
	d. Accounts receivable and credit Allowance for Doubtful Accounts
	11. Using the estimate based on sales method of accounting for uncollectible accounts, the entry
	to reinstate a specific receivable previously written off would include a
	a. credit to Bad Debt Expense
	b. credit to Accounts Receivable
	c. debit to Allowance for Doubtful Accounts
	d. debit to Accounts Receivable