D. Accumulated DepreciationEquipmentThe physical count of inventory was incorrect, which overstated the ending inventory. This would cause the __________.Question 4 of 40 | A. Cost of Goods Sold to be overstated | | B. Cost of Goods Sold to be understated | | C. gross profit to be understated | | D. net income to be understated | Question 5 of 40A contra-revenue account with a debit balance for returned goods is called __________. | A. Sales Returns and Allowances | | B. Sales Discount | | C. the credit period | | D. the discount period | | Question 6 of 40 | 2.5 Points |
The contra-revenue accounts include __________. | A. Sales Tax Payable | | B. Sales Returns and Allowances | | C. Sales Discount | | D. both B and C | | Question 7 of 40 | 2.5 Points |
Urban Camping sold goods for $200 to a charge customer. The customer returned $90 worth of goods for credit. Which entry is required to record the return transaction? | A. debit Sales Returns and Allowances $90; credit Accounts Receivable $90 | | B. debit Sales Returns and Allowances $90; credit Sales $90 | | C. debit Sales $90; credit Sales Returns and Allowances $90 | | D. debit Accounts Receivable $90; credit Sales Returns and Allowances $90 | | Question 8 of 40 | 2.5 Points |
The goods a company has available to sell to customers are called __________. | A. supplies | | B. sales | | C. Cost of Goods Sold | | D. merchandise inventory | | Question 9 of 40 | 2.5 Points |
The information to prepare the Statement of Owners Equity comes from the __________. | A. income statement columns on the worksheet | | B. adjustments columns on the worksheet | | C. balance sheet columns on the worksheet | | D. general ledger | | Question 10 of 40 | 2.5 Points |
Cost of Goods Sold includes __________. | A. freight-in | | B. freight-out | | C. interest income | | D. net sales | | Question 11 of 40 | 2.5 Points |
At the start of the year, Northern Lights had $8,000 worth of merchandise. What do we know about Northern Lights? | A. It is a service business. | | B. It is a retail business. | | C. The company ended with a net income last year. | | D. The company ended with a net loss last year. | | Question 12 of 40 | 2.5 Points |
Which amount does not change during the period and is added to purchases when computing the cost of goods available for sale? | A. beginning inventory | | B. ending inventory | | C. periodic inventory | | D. freight-in | | Question 13 of 40 | 2.5 Points |
When completing a worksheet, __________. | A. the ending inventory amount appears in the income statement debit column | | B. the beginning inventory amount appears in the adjustment credit column | | C. the ending inventory amount appears in the unadjusted trial balance debit column of the worksheet | | D. the beginning inventory amount appears in the balance sheet debit column of the worksheet | | Question 14 of 40 | 2.5 Points |
Net sales equal __________. | A. gross sales | | B. gross sales - sales returns and allowances | | C. gross sales - sales returns and allowances - sales discounts | | D. sales discounts | | Question 15 of 40 | 2.5 Points |
Customer returned merchandise for credit. This will be recorded with __________. | A. a debit to an asset account | | B. a debit to a liability account | | C. a credit to an asset account | | D. None of these are correct | | Question 16 of 40 | 2.5 Points |
A wholesale customer returned merchandise having already paid for it within the cash discount period. The return will be recorded with __________. | A. a credit to an asset account | | B. a credit to a liability account | | C. a credit to Capital | | D. none of the above | | Question 17 of 40 | 2.5 Points |
In what category in a classified balance sheet is Mortgage Payable found? | A. Plant and Equipment | | B. Current Liabilities | | C. Long-term Liabilities | | D. both B and C | | Question 18 of 40 | 2.5 Points |
Which inventory appears in the balance sheet column of the worksheet? | A. ending inventory | | B. beginning inventory | | C. combination of beginning and ending inventories | | D. none of the above | | Question 19 of 40 | 2.5 Points |
Beginning merchandise inventory would be found on the worksheet in the __________. | A. income statement debit column | | B. income statement credit column | | C. balance sheet debit column | | D. balance sheet credit column | | Question 20 of 40 | 2.5 Points |
Which is true of the normal balance of an Income Summary? | A. The balance is debit. | | B. The balance is credit. | | C. The account does not have a normal balance. | | D. It depends on which financial statement it appears. | | Question 21 of 40 | 2.5 Points |
What would be the basis for the following journal entry if it appears on Travis Company records? | Allowance for Doubtful Accounts | 150 | | Accounts ReceivableTim Morgan | 150 | | A. The firm is estimating its uncollectible accounts. | | B. The firm is writing off a specific account. | | C. The firm is making a collection of a previously written-off account. | | D. It is a reversing entry. | | Question 22 of 40 | 2.5 Points |
Aging Accounts Receivable measures __________. | A. days a bill has been due but not paid | | B. months a bill has been due but not paid | | C. sales for the year | | D. all of the above | | Question 23 of 40 | 2.5 Points |
At December 31, 2012, Brookes Horse Stables unadjusted Allowance for Doubtful Accounts showed a debit balance of $432. An aging of the Accounts Receivable indicates probable uncollectible accounts of $1,000. The year-end adjusting entry for Bad Debts Expense __________. | A. includes a debit to the Allowance account for $568 | | B. includes a credit to the Allowance account for $42 | | C. includes a debit to the Allowance account for $822 | | D. includes a credit to the Allowance account for $1,432 | | Question 24 of 40 | 2.5 Points |
Town and Country Saddle learns the account receivable for a customer is uncollectible. The journal entry under the allowance method to write-off an account is to __________. | A. debit Allowance for Doubtful Accounts; credit Accounts Receivable | | B. debit Sales; credit Allowance for Doubtful Accounts | | C. debit Bad Debts Expense; credit Accounts Receivable | | D. debit Allowance for Doubtful Accounts; credit Bad Debts Expense | | Question 25 of 40 | 2.5 Points |
A company writes off a specific account as uncollectible, but later the customer pays. The journal entry to record the reinstatement under the allowance method includes a(n. __________. | A. increase to Cash | | B. decrease to Sales | | C. decrease to Allowance for Doubtful Accounts | | D. decrease to Bad Debts Expense | | Question 26 of 40 | 2.5 Points |
After aging the receivables, Tims Toys estimates that $900 will not be collected, and the Allowance account has a debit balance of $325. The adjusting entry would be for __________. | A. $575 | | B. $900 | | C. $1,225 | | D. $325 | | Question 27 of 40 | 2.5 Points |
No entry was recorded to reinstate a bad debt when making a collection. The allowance method is being used. This error would cause __________. | A. total assets to be overstated | | B. total liabilities to be understated | | C. net income to be understated | | D. None of these are correct | | Question 28 of 40 | 2.5 Points |
After having written off a customer under the direct write-off method, the account will be reopened when the customer __________. | A. sends the full amount to pay off the account | | B. sends any amount to pay on their account | | C. pays the collection bureau | | D. none of the above | | Question 29 of 40 | 2.5 Points |
Colleens account was written off for $800. She received an inheritance from her uncle and wants to clear her account. The entry to record this is to __________. | A. debit Cash and credit Accounts Receivable/Maggie | | B. debit Allowances for Doubtful Accounts, credit Accounts Receivable/Maggie, debit Cash, and credit Accounts Receivable/Maggie | | C. debit Accounts Receivable/Maggie, credit Allowance for Doubtful Accounts, debit Cash, and credit Accounts Receivable/Maggie | | D. debit Accounts Receivable/Maggie, credit Allowance for Doubtful Accounts, debit Accounts Receivable/Maggie, and credit Cash | | Question 30 of 40 | 2.5 Points |
Harrys Hardware estimates that approximately $1.75 out of every $100 of credit sales proves to be uncollectible. Barber calculates Bad Debts Expense using the __________. | A. income statement approach | | B. direct write-off method | | C. balance sheet approach | | D. aging the Accounts Receivable approach | | Question 31 of 40 | 2.5 Points |
Which method uses an aging of Accounts Receivable to calculate the Bad Debts Expense? | A. income statement approach | | B. balance sheet approach | | C. aging the Accounts Receivable | | D. direct write-off | | Question 32 of 40 | 2.5 Points |
Empire has a credit balance of $750 in its Allowance for Doubtful Accounts. The balance in the Accounts Receivable account is $80,500, with $2,415 estimated to be uncollectible after aging the accounts. Under the balance sheet approach, the debit to Bad Debt Expense will be __________. | A. $2,415 | | B. $3,165 | | C. $1,665 | | D. $750 | | Question 33 of 40 | 2.5 Points |
A detailed analysis of Accounts Receivable to determine how long each account has been outstanding is called __________. | A. analyzing the Accounts Receivable | | B. aging the uncollectible accounts | | C. aging the Accounts Receivable | | D. taking a percentage of sales on account | | Question 34 of 40 | 2.5 Points |
Miami Company uses Allowance for Doubtful Accounts. When Miami writes off an uncollectible account, there is a(n. __________. | A. decrease in Accounts Receivable | | B. decrease in expense | | C. increase in net income | | D. none of the above | | Question 35 of 40 | 2.5 Points |
Using the aging method, estimated uncollectible accounts are $3,000. If the balance in the Allowance for Doubtful Accounts is a $600 credit before adjustment, what is the Bad Debts Expense adjustment for the period? | A. $3,000 | | B. $600 | | C. $2,400 | | D. $3,600 | | Question 36 of 40 | 2.5 Points |
The journal entry to write off an account judged to be uncollectible under the allowance would include a debit to __________. | A. Sales | | B. Accounts Receivable | | C. Allowance for Doubtful Accounts | | D. Bad Debts Expense | | Question 37 of 40 | 2.5 Points |
Gross Accounts Receivable is $12,000. Allowance for Doubtful Accounts has a credit balance of $600. Net sales for the year are $100,000. In the past, 2% of sales had proved uncollectible, and an aging of the receivables indicates $1,900 as uncollectible. What would be the adjusted balance of the Allowance account under the balance sheet approach? | A. $2,000 | | B. $1,400 | | C. $2,500 | | D. $1,900 | | Question 38 of 40 | 2.5 Points |
What type of account is an Allowance for Doubtful Accounts? | A. Asset | | B. Contra-asset | | C. Revenue | | D. Contra-revenue | | Question 39 of 40 | 2.5 Points |
A company uses the allowance method and expects to not collect $15,000 of sales. The journal entry to record the estimated bad debt is __________. A. | Allowance for Doubtful Accounts | $15,000 | | Bad Debt Expense | $15,000 | | B. | Allowance for Doubtful Accounts | $15,000 | | Accounts Receivable | $15,000 | | C. | Accounts Receivable | $15,000 | | Allowance for Doubtful Accounts | $15,000 | | D. | Bad Debt Expense | $15,000 | | Allowance for Doubtful Accounts | $15,000 | | | Question 40 of 40 | 2.5 Points |
If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customers account as uncollectible? | A. Allowance for Doubtful Accounts | | B. Bad Debt Expense | | C. Accounts Payable | | D. Bad Debts Recovered | |
