Accounting System Applications
Accounting Review 10
Short Answer Exercise
Instructions:
Click the text box beside Name and enter your name. Press the tab key to move to the first answer box
and enter the first answer for the question on the left. Continue to press tab to advance to each answer
box. Most answers can be found in the Lesson Comments or in Chapter 12 of your QuickBooks text.
When you have answered all questions, save your changes and upload this document to Lesson 1
Assignments in NS Online. This exercise is worth 10 points.
Name
1. An outline of the projected incomes and expenses of a
business is known as a(n)
1)
2. Company A uses the Allowance Method, percentage of
receivables approach of estimating bad debts. The company
has an ending balance in Accounts Receivable of $50,000, an
ending balance in Allowance for Doubtful Accounts of $100,
and an ending balance in the Sales account of $275,000. The
company estimates that bad debts will be 5% of outstanding
accounts receivable. What amount should be recorded as
Bad Debt Expense?
1)
3. Company A uses the Allowance Method, percentage of
sales approach of estimating bad debts. The company has an
ending balance in Accounts Receivable of $50,000, an ending
balance in Allowance for Doubtful Accounts of $100, and an
ending balance in the Sales account of $275,000. The
company estimates that bad debts will be 1% of outstanding
sales. What amount should be recorded as Bad Debt
Expense?
1)
Continued on the next page.
4. Company B uses the Allowance Method to estimate and
record bad debts. Bad debts are estimated to be $1,000.
Draft the entry that you would record in the QB journal.
Account
Debit
5. Company C uses the Direct write-off Method to record bad
debts. The account of Joy Martin in the amount of $850
has been determined to be uncollectible. Draft the entry
that you would record in the QB journal.
Account
Debit