Chapter 8 Receivables OBJECTIVES Objj 1 Ob Desc Descri ribe be the the com commo mon n clas classi sifi ficat catio ions ns of of recei receivab vable les. s. Obj 23 Obj Obj 4 Obj 5 Descri Describe cribe be the the the direc natur narect ture of te-of and andoff the tfhemethod accoun achod countin ting unco uncolle llecti ctible ble rece receiva ivable bles. s.e receiva Descri Des be di tewritewri met of the tgheofaccount acco unting ing for for unc uncoll ollect ectibl ible receivable bles. s. Descri Describe be the the allow allowance ance method method of of accou accounti nting ng for for uncol uncollec lectib tible le rece receiva ivable bles. s. Comar Comaree the direc directt wri writete-off off and allow allowance ance meth methods ods o off account accounting ing for for un uncol collect lectibl iblee accounts. Descri Describe be the the natur nature" e" chara characte cteris ristic tics" s" and and accou accounti nting ng o off notes notes receiv receivabl able. e. Desc Descri ribe be the the reo reort rtin ing g of rece receiv ivab able less on the the bala balance nce she sheet et.. Obj ! Objj # Ob QUESTION GRID True/alse N! Ob# b#ec ecti tive ve " Di$$ Di$$ic icul ult% t% N!" N!" Ob#e Ob#ect ctiv ivee Di$$ Di$$ic icul ult% t% N!" N!" Ob#e Ob#ect ctiv ivee Di$$ Di$$ic icul ult% t% & ) ( * , . ' 8 + &&& &) $%-$1 $%-$1 $%-$1 $%-$1 $%-$1 $%-$1 $%-$2 $%-$2 $%-$3 $%-$3 $%-$3 $%-$3 &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' &' &8 &+ ))& )) )( )* ), ). )' )8 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$! $%-$! $%-$! &as' (oderate (oderate &as' (oderate (oderate &as' &as' &as' &as' &as' &as' (( (* (, (. (' (8 (+ **& *) *( ** $%-$! $%-$! $%-$! $%-$! $%-$! $%-$# $%-$# $%-)** $%-)** $%-)** $%-)** $%-)** &as' &as' &as' &as' &as' &as' &as' (oderate (oderate (oderate &as' &as' &( &* &, &. $%-$4 $%-$4 $%-$4 $%-$4 &as' &as' &as' &as' )+ ((& () $%-$! $%-$! $%-$! $%-$! &as' &as' &as' &as' *, *. $%-)** $%-)** &as' &as' 4$1 Chapter 8/Receivables 4$2 ultiple Ch!ice N! Ob# b#ec ecti tive ve " Di$$ Di$$ic icul ult% t% N!" N!" Ob#e Ob#ect ctiv ivee Di$$ Di$$ic icul ult% t% N!" N!" Ob#e Ob#ect ctiv ivee Di$$ Di$$ic icul ult% t% $%-$1 $%-$1 $%-$1 $%-$1 $%-$1 $%-$2 $%-$2 $%-$2 $%-$2 $%-$2 $%-$2 $%-$2 $%-$3 $%-$3 $%-$3 $%-$3 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' &as' (oderate (oderate &as' (oderate &as' (oderate (oderate &as' &as' &as' &as' )' )8 )+ ((& () (( (* (, (. (' (8 (+ **& *) *( ** *, *. *' *8 *+ ,,& ,) $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$4 $%-$! $%-$! (oderate (oderate &as' (oderate (oderate (oderate &as' &as' &as' (oderate (oderate (oderate (oderate &as' &as' (oderate (oderate (oderate (oderate &as' &as' &as' (oderate (oderate &as' &as' ,( ,* ,, ,. ,' ,8 ,+ ..& .) .( .* ., .. .' .8 .+ ''& ') '( '* ', '. '' '8 $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$! $%-$# $%-$# $%-$# $%-$# $%-)** $%-)** $%-)** $%-)** $%-)** $%-)** $%-)** $%-)** &as' (oderate &as' (oderate &as' &as' (oderate (oderate &as' &as' &as' &as' &as' (oderate &as' &as' &as' &as' &as' &as' (oderate (oderate (oderate (oderate Difficult (oderate & ) ( * , . ' 8 + &&& &) &( &* &, &. &' &8 &+ ))& )) )( )* ), ). E0ercise/Other N! " Ob#ectiv e Di$$ Di $$ic icul ult% t% N! " Ob# b#ec ecti tive ve & ) ( $%-$1 $%-$2 $%-$3 &as' &as' &as' 8 + &- $%-$4 $%-$4 $%-$4 * $%-$3 &as' && $%-$4 , $%-$3 &as' &) $%-$4 . $%-$3+$4 &as' &( $%-$4 ' $%-$4 (oderate &* $%-$4 Di$$ Di$$ic icul ultt % N! " Ob#ectiv e Di$$icult % Difficult &as' (oderat e (oderat e (oderat e (oderat e &, &. &' $%-$4 $%-$4 $%-$! (oderate &as' (oderate &8 $%-$# &as' &+ $%-$# &as' )- $%-$# (oderate e(oderat Chapter 8/Receivables 1r!ble2 N! Ob#ective " Di$$icult % N!" Ob# b#eectiv tive & ) ( $%-$3+$4+$# $%-$4 $%-$4 (oderate Difficult (oderate , . ' $%-$# $%-$# $%-$4+$# * $%-$! (oderate 8 $%-$# 4$3 Di$$i $$icul ultt % N! " Ob#ectiv e Di$$icult % &as' &as' (oderat e (oderat e + &&& $%-$# $%-)** $%-)** (oderate Difficult (oderate Chapter 83Receivables TRUE/45SE 1. ,otes receivabl receivablee and accoun accounts ts receivab receivables les can also be be called called trade trade receivab receivables. les. 4NS6 D/0 &as' O0 $%-$1 ,) ,) 0 ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 2. eceivables eceiv com owners ow an off hould d be disclos disclosed ed searatel' searatel' on on the balance balance sheet. sheet. ablesDfrom /0 coman' &asan' ' O ners 0 and $%d-$officers 1 icers sshoul 4NS6 ,) ,) 0 ))C )nal'tic )nal'tic )C*) /,-(easurement 3. eceivables eceivables not not currentl' currentl' collect collectible ible are are reorted reorted in the the investmen investments ts section section of the balance balance sheet. D/0 &as' O0 $%-$1 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 4. r rade ade receivabl receivables es occur occur when when two two comanies comanies trade or e6change e6change notes receivables receivables.. D/0 &as' O0 $%-$1 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 5. Other receivables receivables include include non trade trade receivab receivables les such such as loans to coman' coman' office officers. rs. D/0 &as' O0 $%-$1 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !. oth accounts accounts receivable receivable and and notes receivable receivable rerese reresent nt claims claims that are are e6ected e6ected to to be collected in cash. D/0 &as' O0 $%-$1 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #. 7hen comanies comanies sell sell their their receivab receivables les to other other comanie comanies" s" the transac transaction tion is is called called factoring factoring D/0 &as' O0 $%-$2 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 404 Chater %+eceivables %. Of the the two methods methods of accountin accounting g for uncollectibl uncollectiblee receivables receivables"" the allowance allowance method method rovides in advance for uncollectible receivables. D/0 &as' O0 $%-$2 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 8. 9enerall' 9enerall' acceted acceted accountin accounting g rinciles rinciles do not normall' normall' allow the the use direct direct write-o write-off ff method of accounting for uncollectible accounts. D/0 &as' O0 $%-$3 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1$. he direct write-off write-off method method records records uncollectible uncollectible accounts accounts e6ense in the 'ear the secific account receivable is determined to be uncollectible. 4NS6 D/0 &as' O0 $%-$3 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 11. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts is debited debited under the direct direct writ write-of e-offf method when an account is determined to be uncollectible. D/0 &as' O0 $%-$3 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 12. :nder the direct direct write-off write-off method" method" no attemt attemt is made to match ad Debt &6ense &6ense to sales revenues in the same accounting eriod. D/0 &as' O0 $%-$3 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 13. he difference difference between between )ccount )ccountss eceivable eceivable and its contra asset asset account is called called net reali;able value. 4NS6 D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 14. he estimate estimate based on sales sales method method violates violates the matching matching rincile. rincile. 4NS6 /0 tic &as ')C*) O 0 $%-$4 ,)00 / ,) ))CD)nal'tic )nal' )C* )/,-(easurement 15. 7hen the estimate estimate based based on anal'sis anal'sis of receivables receivables is is used" income income is reduced when when a secific receivable is written off. 4NS6 / D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1!. 7hen an account receivabl receivablee that has been written written off is subse<uentl' subse<uentl' collected collected"" the account receivable is reinstated. D/0 &as' O0 $%-$4 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 4$5 1#. )lthough )lthough )llowanc )llowancee for Doubtful Doubtful )ccounts )ccounts normall' normall' has a credit balance" balance" it ma' have either a debit or a credit balance balan ce before adjusting entries are recorded at the end of the accounting eriod. 4NS6 D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1%. )t the end of a eriod" before the accounts accounts are adjusted" adjusted" )llowa )llowance nce for Doubtful Doubtful )ccounts )ccounts has a credit balance of =25$" and net sales on account for the eriod total =5$$"$$$. f uncollectible accounts e6ense is estimated at 1> of net sales on account" the current rovision to be made for uncollectible accounts e6ense is =4"#5$. 4NS6 / D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 18. )t the end of a eriod" before the accounts accounts are adjusted" adjusted" )llowa )llowance nce for Doubtful Doubtful )ccounts )ccounts has a debit balance of =5$$" and net sales on account for the eriod total =%$$"$$$. f uncollectible accounts e6ense is estimated at 1> of net sales on account" the current rovision to be made for uncollectible accounts e6ense is =%"5$$. D/0 (oderate O0 $%-$4 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2$. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts is a liabilit liabilit' ' account. 4NS6 / D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 21. )t the end of a eriod" before the accounts accounts are adjusted" adjusted" )llowa )llowance nce for Doubtful Doubtful )ccounts )ccounts has a debit balance of =2"$$$. f the estimate of uncollectible accounts determined b' aging the receivables is =3$"$$$" the current rovision to be made for uncollectible acco accounts unts e6ense is =3$"$$$. 4NS6 / D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 22. )t end ofbalance a eriod" before the accounts acco unts areof adjusted" adjus ted" )llowa )llowance nce for Doubtful Doubtf ul )ccounts )ccounts hasthe a credit of =5"$$$. f the estimate uncollectible accounts determined b' aging the receivables is =5$"$$$" the current rovision to be made for uncollectible acco accounts unts e6ense is =45"$$$. D/0 (oderate O0 $%-$4 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 23. 7hen using the estimate-ba estimate-based-on sed-on-sal -sales es method" the entr' to record uncollectibl uncollectiblee accounts e6ense includes a credit to the )ccounts eceivable account. 4NS6 / D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 406 Chater %+eceivables 24. 7hen using using the estimate estimate based on anal'sis anal'sis of receivab receivables" les" the amount amount comuted comuted in the anal'sis is alwa's the re<uired amount that would be recorded in the adjusting entr'. D/0 &as' O0 $%-$4 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 25. he allowance allowance for doubtful doubtful accounts accounts is similar similar to accumulated accumulated dereciation dereciation in that the account reresents the total of all accounts written-off since the beginning 'ear. 'e ar. D/0 &as' O0 $%-$4 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2!. he e<uation for comuting interest on an interest-bearing interest-bearing note is as follows0 interest e<uals maturit' value times interest rate times time. 4NS6 / D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2#. he due date date of a !$-da' !$-da' note note dated dated ul' 1$ 1$ is etembe etemberr 1$. D/0 &as' O0 $%-$! 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2%. he maturit' maturit' value value of a 12>" !$-da' !$-da' note note for =5"$$$ =5"$$$ is =5"!$$. =5"!$$. D/0 &as' O0 $%-$! 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 28. he maturit' maturit' value value of a note receivable receivable is alwa' alwa'ss the same as its face face value. 4NS6 / D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3$. he interest interest on a !>" !$-da' !$-da' note note for =5"$$$ is is =3$$. D/0 &as' O0 $%-$! 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 31. he/ art' art' romising romi n0 ote$%at-$maturit' mat is the a'ee. a'ee. D/0 sing &asto ' a' Oanote ! urit' is 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 32. f the ma?er ma?er of a note fails to to a' the debt on the due date" date" the note is sai said d to be dishonored. dishonored. 4NS6 D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 33. 7hen a note is received received from a customer on account" account" it is recorded recorded b' debiting )ccount )ccountss eceivable and crediting ,otes eceivable. D/0 &as' O0 $%-$! 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 4$# 34. n comuting comuting the maturit' maturit' date date of a note" the date the note note is issued issued is included included but the due date is omitted. D/0 &as' O0 $%-$! 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 35. 7hen a note is written written to to settle an oen account account no entr' iiss necessar' necessar'.. 4NS6 / D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3!. f a romiss romissor' or' note note is dishonor dishonored" ed" the a'ee a'ee should should 7!t record interest income. D/0 &as' O0 $%-$! 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3#. he receivables receivables turnover turnover ratio ratio is comuted b' dividing dividing total gross gross sales b' the average net receivables during the 'ear. 4NS6 / D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3%. he balance balance of the allowance allowance for doubtful doubtful accounts accounts is added to accounts accounts receivabl receivablee on the balance sheet. D/0 &as' O0 $%-$# 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 38. he accounts accounts receivable receivable turnover measures measures the length length of time in da's it ta?es ta?es to collect a receivable. D/0 &as' O0 $%-$# 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 4$. ) !$-da' !$-da'"" 12> note receivable receivable for =2$"$$$" =2$"$$$" dated (a' 2$" is discounted discounted at the ban? on une 8 at 15>. he number of da's in the discount eriod is 2$. 4NS6 / D/0 (oderate O0 $%-) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 41. ) !$-da' !$-da'"" 12> note receivable receivable for =2$"$$$" =2$"$$$" dated (a' 2$" is discounted discounted at the ban? on une 8 at 15>. he roceeds are =2$"34$. D/0 (oderate O0 $%-) 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 42. f the roceeds roceeds from discount discounting ing a note receivable receivable are less less than the face value value of the note" nterest &6ense will be debited for the e6cess e6ce ss of the roceeds over the face value. D/0 (oderate O0 $%-) 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 408 Chater %+eceivables 43. he discounting discounting of a note receivable receivable creates creates a contingent liabili liabilit' t' that continues continues in effect effect until the due date of the note. D/0 &as' O0 $%-) 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 44. ) note note receivable receivable can be sold to a financial financial institut institution ion to secure cash before before the matur maturit' it' date. his t'e of transaction is called discounting the note receivable. D/0 &as' O0 $%-) 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 45. he amount of cash cash recei received ved for a discounted discounted noted noted is called maturit' maturit' value. value. D/0 &as' O0 $%-) 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 4!. he roceeds roceeds received received from discounti discounting ng a note receivable receivable at a ban? are e<ual to to the face value of the note less the discount charged b' the ban?. D/0 &as' O0 $%-) 4NS6 / ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement U5TI15E COICE 1. ) note receivab receivable le due in 1% months is liste listed d on the the balance balance sheet sheet under under the cation cation a. long-t long-term erm liabil liabiliti ities es b. fi6ed assets c. curr current ent as asse sets ts d. in inve vest stme ment ntss D/0 &as' O0 $%-$1 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2. he receivabl receivablee that is usuall' usuall' evidenced evidenced b' a formal formal instrume instrument nt of credi creditt is a@nA a. tr trade ade rece receiv ivab able le.. b. c. d. 4NS6 ,)00 ,) 3. note receivable. account accounts s receiva receivable ble.. income income ta6 ta6 recei receivabl vable. e. D/0 &as' O0 $%-$1 ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 7hich 7hich of the follow following ing receiva receivables bles would would 7!t be classified as an Bother receivable a. )dvance )dvance to an eml emlo'e o'eee b. nterest receivable c. efund efundabl ablee iincom ncomee tta6 a6 d. ,ote ,otess receiv receivabl ablee D/0 &as' O0 $%-$1 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 4$8 4. ,otes or accounts accounts receivab receivables les that that result result from sales transactio transactions ns are often called a. non-tra non-trade de rece receiva ivable bles. s. b. trade receivables. c. mercha merchandi ndise se receiv receivabl ables. es. d. sales sales receiv receivabl ables. es. D/0 &as' O0 $%-$1 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 5. he he term term Bre Brece ceiv ivab able lesB sB in incl clud udes es all all a. mone' claims claims against against other entities. entities. b. merchandise to be collected from individuals or comanies. c. cash cash to be aid aid to cred credito itors. rs. d. cash cash to be aid aid to debt debtors ors.. 4NS6 ) D/0 &as' O0 $%-$1 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !. 7hen 7hen does does an account account become become uncoll uncollect ectibl ible e a. when the debtor debtor fails fails to a' an an account accordi according ng to a sales contract contract b. when the debtor fails to a' a note on the due date c. there is no general general rule rule for when an account account becomes unc uncollect ollectible ible d. at the the end of the the fiscal fiscal 'ear e. uon receit receit of a certifi certified ed letter letter from the the debtor debtor 4NS6 C D/0 &as' O0 $%-$2 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #. he t'e t'e of account account and normal normal balance balance of of )llow )llowance ance for for Doubtful Doubtful )ccounts )ccounts is a. contra contra asset" asset" credit credit b. asset" debit c. lia liabil bilit' it'"" credit credit d. e6en e6ense se"" debi debitt e. e6en e6ense se"" ccre redi ditt 4NS6 ) /0 tic &as ')C*) O 0 $%-$2 ,)00 ))CD)nal'tic ,) )nal' )C* )/,-(easurement %. he two two methods methods of accounting accounting for for uncollecti uncollectible ble receivabl receivables es are the allowanc allowancee method method and the a. e<uit e<uit' ' meth method od b. direct write-off method method c. in inte tere rest st met metho hod d d. co cost st met metho hod d 4NS6 D/0 &as' O0 $%-$2 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 410 Chater %+eceivables 8. he direct direct write-off write-off method of account accounting ing for for uncoll uncollectibl ectiblee accounts accounts a. emhasi;es emhasi;es balance balance sheet sheet relati relationshi onshis. s. b. is not generall' acceted as a basis for estimating bad debts. c. emhasi;es emhasi;es cash reali;able reali;able value. d. emhasi;es emhasi;es the the matching matching of e6enses e6enses with with revenues. revenues. D/0 &as' O0 $%-$2 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1$. :nder the direct direct write-off write-off method method of accounting accounting for uncollectibl uncollectiblee accounts" accounts" ad Debts &6ense is debited a. at the the end of each each accountin accounting g eriod. eriod. b. when a credit sale is ast due. c. whenever whenever a re-determine re-determined d amount of credit credit sales sales have been made. d. when an account account is determine determined d to be worthless worthless.. D/0 &as' O0 $%-$2 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 11. )n alternat alternative ive name name for ad Debts Debts &6ense &6ense is is a. Collec Collectio tion n &6ense &6ense.. b. Credit Eoss &6ense. c. :ncollectibl :ncollectiblee )ccounts )ccounts &6ense. &6ense. d. Deadbea Deadbeatt &6ens &6ense. e. 4NS6 C D/0 &as' O0 $%-$2 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 12. wo wo methods of accounti accounting ng for uncollectibl uncollectiblee accounts are are the a. direct write-off write-off method and and the allowance allowance method. method. b. allowance method and the accrual method. c. allowance allowance method method and the the net reali;a reali;able ble method. method. d. direct write-off write-off method and and the accrual accrual method. method. D/0 &as' O0 $%-$2 4NS6 ) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 13. f the direct write-of write-offf method of accounting accounting for uncollect uncollectible ible receivables receivables is used" what general ledger account is debited to write off a customerFs account as uncollectible a. :ncollectibl :ncollectiblee )ccounts )ccounts *a'able *a'able b. )ccounts eceivable c. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts d. ad ad Debt Debt &6 &6en ense se D/0 &as' O0 $%-$3 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 411 14. f the direct write-of write-offf method of accounting accounting for uncollect uncollectible ible receivables receivables is used" what general ledger account is credited to write off a customerFs account as uncollectible a. :ncollectibl :ncollectiblee )ccounts )ccounts &6ense &6ense b. )ccounts eceivable c. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts d. ntere nterest st &6ense &6ense 4NS6 D/0 &as' O0 $%-$3 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 15. One of the wea?nesses wea?nesses of the the direct write-o write-off ff method method is that it a. understates understates accounts accounts receiva receivable ble on the balance balance sheet sheet b. violates the matching rincile c. is too diff difficult icult to use for man' man' comanies comanies d. is base based d on esti estimat mates es D/0 &as' O0 $%-$3 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1!. he E(, Co. uses the direct direct write-off write-off method method of accounting accounting for uncollectibl uncollectiblee accounts receivable. he entr' to write off an account that has been determined to be uncollectible would be as follows0 a. debit )llowa )llowance nce for Doubtful )ccounts )ccountsGG credit )ccounts )ccounts eceivable eceivable b. debit ales eturns and )llowance" )llowance" credit )ccounts eceivable c. debit :ncollectible )ccounts &6enseG credit )llowance for for Doubtful )ccounts d. debit )ccounts )ccounts eceivable" eceivable" credit credit :ncollectible :ncollectible )ccounts )ccounts &6ense e. debit :ncollectib :ncollectible le )ccounts )ccounts &6enseG &6enseG credit )ccounts )ccounts eceivable eceivable 4NS6 & D/0 (oderate O0 $%-$3 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1#. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts has a credit credit balance of =5$$ at the end of the 'ear @befor @beforee adjustmentA" and uncollectible accounts e6ense is estimated at 3> of net sales. f net sales are =!$$"$$$" the amount of the adjusting entr' to record the rovision for doubtful accounts is a. b. c. d. 4NS6 ,)00 ,) =1%" 1%"5$$ =1#"5$$ =1%" 1%"$$$ none none of th thee above above C D/0 (oderate O0 $%-$4 ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 412 Chater %+eceivables 1%. :nder the allowanc allowancee method" writing writing off an uncollectibl uncollectiblee account a. affects affects onl' onl' income income statem statement ent accounts. accounts. b. is not accetable ractice. c. affects affects onl' balance sheet accounts. accounts. d. affects affects both balance balance sheet and and income statemen statementt accounts. accounts. D/0 &as' O0 $%-$4 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 18. )n estimate estimate based on an anal'sis anal'sis of receivables receivables shows that =#%$ =#%$ of accounts receivable receivabless are uncollectible. he )llowance for Doubtful )ccounts has a debit balance b alance of =11$. )fter rearing the adjusting entr' at the end of the 'ear" the balance in the )llowance )llowance for Doubtful )ccounts is a. =11$ b. =#%$ c. =!#$ d. =%8$ 4NS6 D D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2$. f the allowance allowance method of accounting accounting for uncollecti uncollectible ble receivables receivables is used" used" what general ledger account is debited to write off a customerFs account as uncollectible a. :ncollectibl :ncollectiblee )ccounts )ccounts &6ense &6ense b. )llowance for Doubtful )ccounts )ccounts c. )ccount )ccountss eceiva eceivable ble d. ntere nterest st &6ense &6ense 4NS6 D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 21. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts has a credit credit balance of =%$$ at the end of the 'ear @befor @beforee adjustmentA" and an anal'sis of accounts in the customers ledger indicates doubtful accounts of =15"$$$. 7hich of the following entries records the roer rovision for doubtful accounts a. debit :ncollectible )ccounts &6ense" =%$$G credit )llowance for Doubtful )ccounts" =%$$ b. debit :ncollectible )ccounts )ccounts &6ense" =14"2$$G credit )llowance for Doubtful )ccounts" =14"2$$ c. debit )llowance )llowance for Doubtful )ccounts" =%$$G credit :ncollectible )ccounts &6ense" =%$$ d. debit )llowance )llowance for Doubtful )ccounts" =15"%$$G credit credit :ncollectible )ccounts &6ense" =15"%$$ D/0 (oderate O0 $%-$4 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 413 22. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts has a debit debit balance of =5$$ =5$$ at the end of the 'ear @before @before adjustmentA" and uncollectible accounts e6ense is estimated at 3> of net sales. f net sales are =!$$"$$$" the amount of the adjusting entr' to record the rovision for doubtful accounts is a. =1%" 1%"5$$ b. =1#"5$$ c. =1%" 1%"$$$ d. none none of th thee above above D/0 (oderate O0 $%-$4 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 23. )fter the accounts accounts are adjusted adjusted and closed at the end of the fisca fiscall 'ear" )ccounts )ccounts eceivable eceivable has a balance of =45$"$$$ = 45$"$$$ and )llowance for Doubtful )ccounts has a balance of =25"$$$. 7hat is the net reali;able value of the accounts receivable a. =25" 25"$$$ b. =425"$$$ c. =4 =45$ 5$"$ "$$$ $$ d. =4 =455 55"$ "$$$ $$ D/0 &as' O0 $%-$4 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 24. f the allowance allowance method of accounting accounting for uncollecti uncollectible ble receivables receivables is used" used" what general ledger account is credited to write off a customerFs account as uncollectible a. :ncollectibl :ncollectiblee )ccounts )ccounts &6ense &6ense b. )ccounts eceivable c. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts d. ntere nterest st &6ense &6ense D/0 &as' O0 $%-$4 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 25. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts is listed listed on the balance sheet sheet under the cation cation a. b. c. d. 4NS6 ,)00 ,) stoc?ho sto c?holde ldersH rsH e<uit' e<uit' investments fi fi6e 6ed d asse assets ts curr current ent ass asset etss D D/0 &as' O0 $%-$4 ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 414 Chater %+eceivables 2!. On the balance sheet" sheet" the amount shown shown for the )llowanc )llowancee for Doubtful )ccounts )ccounts is e<ual to the a. :ncollectibl :ncollectiblee accounts accounts e6ense e6ense for for the 'ear b. total of the accounts receivables written-off dur during ing the 'ear c. total estima estimated ted uncollectib uncollectible le accounts accounts as of the end of the 'ear d. sum of all accounts accounts that are are ast ast due. 4NS6 C D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2#. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts has a credit credit balance balance of =1"1$$ at the end of the 'ear 'ear @before adjustmentA" and an anal'sis of customersF accounts indicates doubtful doub tful accounts of =12"8$$. 7hich of the following entries records the roer rovision for doubtful accounts a. debit :ncollectible )ccounts &6ense" =14"$$$G credit )llowance for Doubtful )ccounts" =14"$$$ b. debit )llowance )llowance for Doubtful )ccounts" )ccounts" =14"$$$G credit :ncollectible )ccounts &6ense" =14"$$$ c. debit )llowance )llowance for Doubtful )ccounts" =11"%$$G =11"%$$G credit :ncollectible :ncollectible )ccounts )ccounts &6ense" =11"%$$ d. debit :ncollectible )ccounts &6ense" =11"%$$G credit )llowance for Doubtful )ccounts" )ccounts" =11"%$$ 4NS6 D D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2%. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts has a credit credit balance balance of =1"5$$ at the end of the 'ear 'ear @before adjustmentA" and an anal'sis of customersF accounts indicates doubtful doub tful accounts of =1#"8$$. 7hich of the following entries records the roer rovision for doubtful accounts a. debit )llowance )llowance for Doubtful )ccounts" =1!"4$$G credit :ncollectible )ccounts &6ense" =1!"4$$ b. debit )llowance )llowance for Doubtful )ccounts" )ccounts" =18"4$$G credit :ncollectible )ccounts &6ense" =18"4$$ c. debit :ncollectible )ccounts &6ense" =18"4$$G credit )llowance for Doubtful )ccounts" =18"4$$ d. debit :ncollectible )ccounts &6ense" =1!"4$$G credit )llowance for Doubtful )ccounts" =1!"4$$ D/0 (oderate O0 $%-$4 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 28. 7hat is the t'e of account account and normal balan balance ce of )llowance )llowance for Doubtful Doubtful ) )ccounts ccounts a. Contra Contra asset" asset" cre credit dit b. )sset" debit c. )sse )sset" t" cr credi editt d. Contra Contra asset" asset" deb debit it 4NS6 ) D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 415 3$. ) coman' coman' uses the estimate estimate of sales sales method to account for uncollect uncollectible ible accounts. accounts. 7hen 7hen the firm writes off a secific customerFs account receivable a. total current current asset assetss are are reduced reduced b. total e6enses for the eriod are increased c. total current current assets assets are reduced reduced and total total e6enses are are increased increased d. there is no effect effect on total total current current assets assets or total e6enses e6enses 4NS6 D D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 31. )n estimate estimate based on an anal'sis anal'sis of receivables receivables shows that =#%$ =#%$ of accounts receivable receivabless are uncollectible. he )llowance for Doubtful )ccounts has a debit balance b alance of =11$. )fter rearing the adjusting entr' at the end of the 'ear" the balance in the :ncollectible )ccounts &6ense is a. =11$ b. =#%$ c. =!#$ d. =%8$ D/0 (oderate O0 $%-$4 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 32. )C coman' uses uses the estimate estimate of sales method method of accounting accounting for uncollectibl uncollectiblee accounts. )C estimates that 3> of all credit sales will be uncollectible. On anuar' 1" 2$$5" the )llowance for Doubtful )ccounts had a credit balance of =2"4$$. During 2$$5" )C wroteoff accounts receivable totaling =1"%$$ and made credit sales of =1$$"$$$. )fter the adjusting entr'" the December 31" 2$$5" balance in the :ncollectible )ccounts &6ense would be a. =1"2$$ b. =3"$$$ c. =3"!$$ d. =#"2 #"2$$ D/0 (oderate O0 $%-$4 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 33. he balance in )llowanc )llowancee for Doubtful )ccount )ccountss must be carefull' considered considered rior to the end of the 'ear adjustment when al'ing which method a. direct direct writ write-o e-off ff meth method od b. estimate based on sales c. estimate estimate based based on an anal's anal'sis is of receivab receivables les d. both both @bA @bA and and @cA @cA D/0 &as' O0 $%-$4 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 416 Chater %+eceivables 34. Donovan Coman' Coman' uses the the estimate estimate based on anal'sis anal'sis of receivables receivables to to account for uncollectible accounts. he coman' has determined that the rish Coman' account is uncollectible. o write-off write-off this account" Donovan should debit a. :ncollectibl :ncollectiblee )ccounts )ccounts &6ense &6ense and credit )ccount )ccountss eceivable b. :ncollectible )ccounts )ccounts &6ense and credit )llowance for Doubtful )ccounts c. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts and credit )ccounts )ccounts eceivabl eceivablee d. )ccounts )ccounts receivable receivable and credit credit )llowance )llowance for Doubtful Doubtful )cc )ccounts ounts D/0 &as' O0 $%-$4 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 35. :sing the estimat estimatee based on sales method method of accounting for uncollect uncollectible ible accounts" accounts" the entr' to reinstate a secific receivable reviousl' written off would include a a. credit credit to ad ad Debt Debt &6ens &6ensee b. credit to )ccounts eceivable c. debit to to )llowanc )llowancee for Doubtful Doubtful )ccount )ccountss d. debit to )ccounts )ccounts eceivable eceivable 4NS6 D D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3!. )t the beginning of the 'ear" the balance in the the )llowance )llowance for Doubtful )ccounts is a credit of =54$. During the 'ear" =35$ of reviousl' reviousl' written-off accounts were reinstated and accounts totaling =41$ are written-off as uncollectible. he end of the 'ear balance in the )llowance for Doubtful )ccounts should be a. =35$ b. =41$ c. =4%$ d. =!$$ D/0 (oderate O0 $%-$4 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3#. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts has a debit debit balance of =%$$ =%$$ at the end of the 'ear @before @before adjustmentA" and an anal'sis of accounts in the customers ledger indicates doubtful accounts of =15"$$$. 7hich of the following entries records the roer rovision for doubtful accounts a. debit :ncollectible )ccounts &6ense" =%$$G credit )llowance for Doubtful )ccounts" =%$$ b. debit :ncollectible )ccounts )ccounts &6ense" =14"2$$G credit )llowance for Doubtful )ccounts" =14"2$$ c. debit )llowance )llowance for Doubtful )ccounts" =%$$G credit :ncollectible )ccounts &6ense" =%$$ d. debit :ncollectible )ccounts &6ense" =15"%$$G credit )llowance for Doubtful )ccounts" =15"%$$ 4NS6 D D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 41# 3%. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts has a debit debit balance of =1"1$$ =1"1$$ at the end of the 'ear @before adjustmentA" and an anal'sis of customersF accounts indicates doubtful doub tful accounts of =12"8$$. 7hich of the following entries records the roer rovision for doubtful accounts a. debit :ncollectible )ccounts &6ense" =14"$$$G credit )llowance for Doubtful )ccounts" =14"$$$ b. debit )llowance )llowance for Doubtful )ccounts" )ccounts" =14"$$$G credit :ncollectible )ccounts &6ense" =14"$$$ c. debit )llowance )llowance for Doubtful )ccounts" =11"%$$G =11"%$$G credit :ncollectible :ncollectible )ccounts )ccounts &6ense" =11"%$$ d. debit :ncollectible )ccounts &6ense" =11"%$$G credit )llowance for Doubtful )ccounts" )ccounts" =11"%$$ D/0 (oderate O0 $%-$4 4NS6 ) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 38. )llowance )llowance for Doubtful Doubtful )ccounts )ccounts has a credit credit balance balance of =1"5$$ at the end of the 'ear 'ear @before adjustmentA" and an anal'sis of customersF accounts indicates doubtful doub tful accounts of =1#"8$$. 7hich of the following entries records the roer rovision for doubtful accounts a. debit )llowance )llowance for Doubtful )ccounts" =1!"4$$G credit :ncollectible )ccounts &6ense" =1!"4$$ b. debit )llowance )llowance for Doubtful )ccounts" )ccounts" =18"4$$G credit :ncollectible )ccounts &6ense" =18"4$$ c. debit :ncollectible )ccounts &6ense" =18"4$$G credit )llowance for Doubtful )ccounts" =18"4$$ d. debit :ncollectible )ccounts &6ense" =1!"4$$G credit )llowance for Doubtful )ccounts" =1!"4$$ D/0 (oderate O0 $%-$4 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 4$. 7hen the allowance allowance method method is used to account account for uncollect uncollectible ible acco accounts" unts" ad Debts Debts &6ense is debited when a. a customer customerFs Fs account account becomes becomes ast ast due. due. b. c. d. 4NS6 ,)00 ,) an account becomes bad and is written off. a sal salee is is mad made. e. management management estimates estimates the amount amount of uncollecti uncollectibles. bles. D D/0 &as' O0 $%-$4 ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 41. he collection collection of an account that had been reviousl' reviousl' written written off under under the allowance allowance method of accounting for uncollectibles a. will increas increasee income in in the eriod eriod it is collect collected. ed. b. will decrease income in the eriod it is collected. c. does not affect affect income income in the the eriod it it is collected collected.. d. re<uires a correcting correcting entr' for the eriod in which the account was written off. off. D/0 &as' O0 $%-$4 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 418 Chater %+eceivables 42. )n aging of a coman'Fs coman'Fs accounts accounts receivable receivable indicates indicates that that =4"$$$ are estimat estimated ed to be uncollectible. f )llowance for Doubtful )ccounts has a =1"2$$ credit balance" the adjustment to record bad debts for the eriod will re<uire a a. debit to )llowance )llowance for Doubtf Doubtful ul )ccounts )ccounts for for =2"%$$. b. debit to ad Debts &6ense for =2"%$$. c. debit to )llowance )llowance for Doubtf Doubtful ul )ccounts )ccounts for for =4"$$$. d. credit to )llow )llowance ance for Doubtful Doubtful for =4"$$$. =4"$$$. D/0 (oderate O0 $%-$4 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 43. )n aging of a coman'Fs coman'Fs accounts accounts receivable receivable indicates indicates that that =3"$$$ are estimat estimated ed to be uncollectible. f )llowance for Doubtful )ccounts has a =1"2$$ debit balance" the adjustment to record bad debts for the eriod will re<uire a a. debit to ad ad Debt &6ense &6ense for =4"2$$. b. debit to ad Debts &6ense for =3"$$$. c. debit to ad ad Debts Debts &6ense &6ense for =1"%$$. d. credit to )llow )llowance ance for Doubtful Doubtful )ccounts )ccounts for =4"$$$. =4"$$$. D/0 (oderate O0 $%-$4 4NS6 ) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 44. )n aging of a coman'Fs coman'Fs accounts accounts receivable receivable indicates indicates that that =3"$$$ are estimat estimated ed to be uncollectible. f )llowance for Doubtful )ccounts has a =1"2$$ credit balance" the adjustment to record bad debts for the eriod will re<uire a a. debit to ad ad Debt &6ense &6ense for =4"2$$. b. debit to ad Debts &6ense for =3"$$$. c. debit to ad ad Debts Debts &6ense &6ense for =1"%$$. d. credit to )llow )llowance ance for Doubtful Doubtful )ccounts )ccounts for =4"$$$. =4"$$$. D/0 (oderate O0 $%-$4 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 45. ) debit debit balance balance in the )llowa )llowance nce for Doubtful Doubtful )ccount )ccountss a. b. c. d. 4NS6 ,)00 ,) is the the normal normal balance balance for for that that account. account. indicates that actual bad debt write-offs have been less than what was estimated. estimated. cannot occur if the the ercentage ercentage of receivables receivables method of estimati estimating ng bad debts is used. indicates that actual bad debt write-offs have e6ceeded revious rovisions for bad debts. D D/0 (oderate O0 $%-$4 ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 418 4!. o record estimated uncollectible accounts using the allowance method" the adjusting entr' would be a a. debit to ad Debts &6ense &6ense and a credit to )llowa )llowance nce for Doubtful Doubtful )ccounts )ccounts.. b. debit to )ccounts eceivable and a credit to )llowance for Doubtful )ccounts. c. debit to )llowanc )llowancee for Doubtful )ccount )ccountss and a credit to )ccount )ccountss eceivable. eceivable. d. debit to Eoss Eoss on Credit ales ales and a credit to )ccounts )ccounts eceivabl eceivable. e. 4NS6 ) D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 4#. he balance in )llowan )llowance ce for Doubtful Doubtful )ccounts )ccounts must must be considered considered rior to end of eriod adjustment when using which of the following methods a. )nal'sis )nal'sis of receivables receivables allowance allowance method method b. Direct write-off method method c. )ccr )ccrual ual meth method od d. ,et real reali;a i;able ble meth method od D/0 &as' O0 $%-$4 4NS6 ) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 4%. Iou Iou have just received received notice that a customer of 'ours 'ours with an )ccount eceivable balance of =1$$ has gone ban?rut and will 7!t ma?e an' future a'ments. )ssuming 'ou use the allowance method" the entr' 'ou ma?e is to a. debit ad Debt &6ense &6ense and credit )llowance )llowance for Doubtful Doubtful )ccount )ccounts. s. b. debit ad Debt &6ense and credit )ccounts eceivable. c. debit )llowa )llowance nce for Doubtful )ccounts )ccounts and credit )ccounts )ccounts eceivable. eceivable. d. debit )llowa )llowance nce for Doubtful )ccounts )ccounts and credit credit ad Debt &6ense. 4NS6 C D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 48. a anning nning Coman' Coman' uses the ercentage ercentage of receivables receivables method method for recording recording bad debts e6ense. he accounts receivable balance is =2$$"$$$ and credit sales are =1"$$$"$$$. )n aging of accounts receivable shows that 5> will be uncollectible. 7hat adjusting entr' will (anning Coman' ma?e if the )llowance for Doubtful )ccounts has a credit balance of =2"$$$ before adjustment a. ad Debts Debts &6ense &6ense %"$$$ %"$$$ )llowance for Doubtful )ccounts %"$$$ b. ad Debts &6ense 1$"$$$ )llowance for Doubtful )ccounts 1$"$$$ c. ad Debts Debts &6ense &6ense %"$$$ %"$$$ )ccounts eceivable %"$$$ d. ad Debts Debts &6ense &6ense 1$"$$$ 1$"$$$ )ccounts eceivable 1$"$$$ 4NS6 ) D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 420 Chater %+eceivables 5$. :nder the allowanc allowancee method" when when a 'ear-end 'ear-end adjustment adjustment is made for estim estimated ated uncollectible accounts a. Eiabil Eiabiliti ities es decr decreas ease. e. b. ,et ncome is unchanged. c. otal otal )ssets )ssets are unchange unchanged. d. d. otal otal )ssets )ssets decrease. decrease. 4NS6 D D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 51. he amount amount of a romissor romissor' ' note is called called the a. re real ali; i;abl ablee value value b. maturit' value c. fa face ce va valu luee d. roc rocee eeds ds D/0 &as' O0 $%-$! 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 52. he amount of the the romissor' romissor' note note lus the interest interest earned earned on the due date is called called the a. re real ali; i;abl ablee value value b. maturit' value c. fa face ce va valu luee d. net reali; reali;able able value value 4NS6 D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 53. ) !$-da'" 1$> note for =%"$$$" dated )ril )ril 15" is received from a customer on account. he face value of the note is a. =%"!$$ b. =#"2$$ c. =%"%$$ d. =%"$ %"$$$ 4NS6 D D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 54. ) 8$-da' 8$-da'"" 12> note for =1$"$$$" =1$"$$$" dated (a' 1" is received received from a customer on account. account. he maturit' value of the note is a. =1$" 1$"$$$ b. =1$"3$$ c. =45$ d. =8"5 8"55$ 4NS6 D/0 (oderate O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 421 55. nterest nterest on a note note can be calculated calculated without without ?nowledge ?nowledge of the the a. noteFs noteFs maturi maturit' t' date date b. rate of interest c. notes notes durat duratio ion n d. r rin inci cial al amoun amountt D/0 &as' O0 $%-$! 4NS6 ) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 5!. On ,ovember ,ovember 1" la;er Coman' Coman' receives receives a !> interest interest bearing bearing note from am Coman' Coman' to settle a =2$"$$$ account accoun t receivable. he note is due in si6 months. )t December 31" la;er should record interest revenue of a. =$ b. =1$$ c. =2$$ d. =!$$ D/0 (oderate O0 $%-$! 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 5#. a. f the ma?er ma?e r of a romissor' romissor' note fails fails to a' the note note on the due date" the note note is said to be dis dislac l aced ed b. disallowed c. dish dishon onor ored ed d. disc discou ount nted ed D/0 &as' O0 $%-$! 4NS6 C ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 5%. he journal journal entr' to record record a note received received from a customer customer to al' on account account is a. debit ,otes ,otes eceivableG eceivableG credit credit )ccounts )ccounts eceivabl eceivablee b. debit )ccounts eceivableG credit ,otes ,otes eceivable c. debit CashG credit ,otes eceivable eceivable d. debit ,otes ,otes eceivable eceivableGG credit credit ,otes *a'able *a'able 4NS6 ) D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 58. ) =!"$$$" 3$-da'" 12> note recorded on ,ovember 21 is not aid b' the ma?er at maturit'. maturit'. he journal entr' to recogni;e this event is a. debit Cash" Cash" =!"$!$G =!"$!$G credit credit ,otes ,otes eceivabl eceivable" e" =!"$!$ =!"$!$ b. debit )ccounts eceivable" =!"$!$G credit ,otes eceivable" =!"$$$G Credit nterest eceivable" =!$ c. debit ,otes ,otes eceivable" eceivable" =!"$!$G credit credit )ccounts )ccounts eceivabl eceivable" e" =!"$!$ d. debit )ccounts )ccounts eceivable" =!"$!$G credit ,otes eceivable" =!"$$$G Credit nterest evenue" =!$ D/0 (oderate O0 $%-$! 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 422 Chater %+eceivables !$. On ,ovember ,ovember 1" Jim Coman' Coman' acceted acceted a 3-month note receivabl receivablee as a'ment for for services services rovided to Chu Coman'. he he terms of the note were =%"$$$ face value and !> interest. Jim Coman' closes its boo?s at December 31 and does not use reversing entries. On /ebruar' 1" the journal entr' to record the collection of the note should include a credit to a. ,otes ,otes eceiv eceivabl ablee for = =%"1 %"12$ 2$ b. nterest eceivable for =12$ c. ntere nterest st even evenue ue for for =12$ =12$ d. ntere nterest st evenu evenuee for =4$ =4$ D/0 (oderate O0 $%-$! 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !1. ) note receivab receivable le or romissor' romissor' note a. has the art' to to whom the the mone' is is due as the ma?er. ma?er. b. is not a formal credit instrument. c. cannot be factored factored to another another art'. art'. d. ma' be used used to settle settle an an accounts accounts receivabl receivable. e. 4NS6 D D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !2. 7hen a coman' receives receives an interes interest-bea t-bearing ring note receivabl receivable" e" it will a. debit ,otes ,otes eceivable eceivable for for the maturit maturit' ' value of the the note. b. debit ,otes eceivable for the face value of the note. c. credit ,otes eceivabl eceivablee for the maturit maturit' ' value of the the note. d. credit ,otes eceivabl eceivablee for the face face value of the note. note. D/0 &as' O0 $%-$! 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !3. *ane Coman' Coman' receives receives a =3"$$$" 3-month" 3-month" !> romissor' romissor' note note from Dag Dag Coman' in settlement of an oen accounts receivable. 7hat entr' will *ane Coman' ma?e uon receiving the note a. ,otes ,otes eceiva eceivable ble 3"$ 3"$$$ $$ )ccounts eceivableKDag Coman' b. ,otes eceivable 3"$45 )ccounts eceivableKDag Coman' c. ,otes ,otes eceiva eceivable ble 3"$ 3"$45 45 )ccounts eceivableKDag Coman' nterest evenue d. ,otes ,otes eceiva eceivable ble 3"$ 3"$$$ $$ nterest eceivable )ccounts eceivableKDag Coman' nterest evenue 45 4NS6 ) D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3"$$$ 3"$45 3"$$$ 45 45 3"$$$ Chapter 8/Receivables 423 !4. he maturit' maturit' value value of a =2$"$$$" =2$"$$$" 8>" 4$-da' 4$-da' note receivab receivable le dated ul' ul' 3 is a. =2 =2$" $"$$ $$$. $. b. =2$"2$$. c. =2 =21" 1"%$ %$$. $. d. =2 =22" 2"$$ $$$. $. D/0 &as' O0 $%-$! 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !5. Larer Coman' Coman' lends lends Lewell Lewell Coman' =2$"$$$ =2$"$$$ on (arch 1" acceting acceting a four-mon four-month" th" !> interest note. Larer Coman' reares financial statements on (arch 31. 7hat adjusting entr' should be made before the financial statements can be reared a. Cash 1$ 1$$ nterest evenue 1$$ b. nterest eceivable 3$$ nterest evenue 3$$ c. ntere nterest st eceiva eceivable ble 1$$ nterest evenue 1$$ d. ,ote ,ote eceiva eceivable ble 2$" 2$"$$$ $$$ Cash 4NS6 C D/0 &as' O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2$"$$$ !!. right right Co. holds *ar? Co.Hs Co.Hs =2$"$$$" =2$"$$$" 12$ da'" 8> note. note. he entr' made b' right right Co. when the note is collected" assuming no interest has reviousl' been accrued is0 a. Cash Cash 2$"$ 2$"$$$ $$ ,otes eceivable 2$"$$$ b. )ccounts eceivable 2$"!$$ ,otes eceivable 2$"$$$ nterest evenue !$$ c. Cash Cash 2$ 2$"! "!$$ $$ ,otes eceivable 2$"$$$ nterest evenue d. )ccount )ccountss eceiva eceivable ble 2$"!$$ 2$"!$$ ,otes evenue nterest evenue 4NS6 C D/0 (oderate O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !$$ 2$"$$$ !$$ !#. eceivables eceivables are usuall' usuall' listed listed on the balance balance sheet after after Cash in what what order order a. )ccounts )ccounts eceivable" eceivable" ,otes ,otes eceivable" eceivable" nterest nterest eceivabl eceivablee b. nterest eceivable" ,otes eceivable" )ccounts )ccounts eceivable c. ,otes eceivable eceivable"" nterest nterest eceivable" eceivable" )ccounts )ccounts eceivable eceivable d. ,otes eceivable" eceivable" )ccount )ccountss eceivable" eceivable" nterest eceivable eceivable D/0 &as' O0 $%-$# 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 424 Chater %+eceivables !%. eceivables eceivables are usuall' usuall' listed listed in order a. of th thee due due da date te b. of the si;e c. alha alhabe beti tica call ll' ' d. of li li<ui <uidi dit' t' D/0 &as' O0 $%-$# 4NS6 D ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !8. )ccounts )ccounts eceivabl eceivablee urnov urnover er measures measures a. how fre<uentl' fre<uentl' during during the 'ear the the accounts receivab receivable le are converted converted to cash b. the number of da's outstanding c. the fair fair mar?et mar?et value of accounts accounts receivab receivable le d. the efficienc efficienc' ' of the accounts accounts a'able a'able function function 4NS6 ) D/0 &as' O0 $%-$# ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #$. he number number of da'sF da'sF sales sales in receivabl receivables es a. is an estimate estimate of the length length of time time the receivables receivables have been been outstanding outstanding b. c. d. 4NS6 ,)00 ,) measures the number of times the receivables turn over each 'ear is ,et Credit Cred it ales divided divided b' )ve ) verage rage eceivables eceivables is not meaningf meaningful ul and therefo therefore re is not not used used ) D/0 &as' O0 $%-$# ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement #1. n reference reference to a romissor' romissor' note" note" another another word for Bdiscount BdiscountBB is a. matu maturrit' it' b. sale c. u urrch chas asee d. in inte tere rest st 4NS6 D D/0 &as' O0 $%-) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #2. he amount received received b' the the endorser after after discounti discounting ng a note receivable receivable at the ban? is called called the a. roc rocee eeds ds b. maturit' value c. fa face ce va valu luee d. re real ali; i;abl ablee valu valuee 4NS6 ) D/0 &as' O0 $%-) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 425 #3. ) !$-da' !$-da'"" 12> note note for =1$"$$$" =1$"$$$" dated (a' (a' 1" is received received from from a customer customer on account. account. f the note is discounted on (a' 21 at 15>" the roceeds are a. =1#$ b. =8"%3$ c. =1$" 1$"$$$ d. =1 =1$" $"$3 $3$ $ 4NS6 D D/0 (oderate O0 $%-) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #4. ) !$-da' !$-da'"" 12> note note for =1$"$$$" =1$"$$$" dated (a' (a' 1" is received received from from a customer customer on account. account. f the note is discounted on une 1$ at 15>" the roceeds are a. =1 =1$" $"1 115 b. =1$"2$$ c. =1$" 1$"$$$ d. =1 =1$" $"$3 $3$ $ D/0 (oderate O0 $%-) 4NS6 ) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #5. ) !$-da'" note note foron=1$"$$$" =1$"$ (a' (a' is received received from from arevenue customer customer account. account. the!$-da' note is" 12> discounted (a'$$" 21 dated at 15>" the1"amount of interest or on e6ense to bef recorded b' the a'ee of the note on (a' 21 is a. =3$ intere interest st e6ens e6ensee b. =3$ interest revenue c. =1#$ intere interest st revenue revenue d. =1#$ intere interest st e6en e6ense se 4NS6 D/0 (oderate O0 $%-) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #!. ) !$-da' !$-da'"" 12> note received received from a customer customer for =5$"$$$" dated dated (a' 15" is endorsed to the ban? on (a' 25" and the ban? discounts the note at 15>. f the note is dishonored b' the ma?er and the ban? charges a =2$ rotest fee" what is the amount a'able to the ban? on ul' 14 a. =51" 51"$$$ b. =51"$2$ c. =5!" 5!"$2$ d. =5 =5$" $"$$ $$$ $ D/0 (oderate O0 $%-) 4NS6 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 426 Chater %+eceivables ##. ) 8$-da'" 12> note for =2$"$$$" dated )ril )ril 1$" is received from a customer on account. f the note is discounted at 15> on (a' 1$" the due date is a. ul' 8 b. ul' 1$ c. ul' 11 d. ul' % 4NS6 ) D/0 Difficult O0 $%-) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #%. ) 8$-da'" 12> note for =2$"$$$" dated )ril )ril 1$" is received from a customer on account. f the note is discounted at 15> on (a' 1$" the da's in the discount eriod are a. !$ b. 8$ c. 12$ d. 3$ D/0 (oderate O0 $%-) 4NS6 ) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement E9ERCISE/OTER 1. Other than accounts accounts receivable receivable and and notes notes receivable receivable"" name other receivables receivables that might might be be included in the general ledger. 4NS6 nterest eceivable" eceivables from Officers or &mlo'ees" a a6es 6es eceivable. D/0 &as' O0 $%-$1 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2. f sales sales ersonnel ersonnel are are allowed allowed to arove arove customer customer credit credit"" how might might the the cost of aroving aroving oor credit ris? be controlled 4NS6 )llow sales ersonnel to arove customer credit for onl' sales of small amounts. D/0 &as' O0 $%-$2 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3. On (arch (arch 31st 31st the coman' determines determines that that it needs to recogni;e recogni;e =1"85$.$$ =1"85$.$$ in uncolle uncollectibl ctiblee accounts e6ense based on an evaluation of accounts receivable. ournali;e this recognition. 4NS6 (ar 31st :ncollectible )ccounts &6ense 1"85$.$$ )llowance for Doubtful )ccounts 1"85$.$$ D/0 &as' O0 $%-$2 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement Chapter 8/Receivables 4. 42# ournali;e ournali;e the the following following transa transaction ction using using the the direct direct write-of write-offf met method hod of accounti accounting ng for uncollectible receivables. une 1$ eceived =1"3$$ from an Downs and wrote wrote off the remainder remainder owed of =4"2$$. Oct. 11 einstated the account of an Downs and received =4"2$$ cash in full a'ment. 4NS6 une 1$ Cash 1"3$$ ad Debt &6ense 4"2$$ )ccounts eceivable-an Downs 5"5$$ Oct 11 11 1 1 )ccounts eceivable-an Downs ad Debt &6ense 4"2$$ Cash )ccounts eceivable-an Downs 4"2$$ 4"2$$ 4"2$$ D/0 &as' O0 $%-$3 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement O*0 &6amle &6ercise %-1 5. (ega tamers tamers utili;es utili;es the the direct direct write-of write-offf method method for account accountss receivable. receivable. On On etember etember 15th it is notified b' the attorne's for Lub Ca en that Lub Ca en is ban?rut and no cash is e6ected in the li<uidation of Lub Ca enHs. ournali;e the =!55.$$ shown as accounts receivable from Lub Ca enHs as a write-off. 4NS6 et 15th :ncollectible )ccounts &6ense !55.$$ )ccounts eceivable - Lub Ca en !55.$$ D/0 &as' O0 $%-$3 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement !. he followin following g journal journal entries entries illust illustrate rate the the two methods methods of accounting accounting for for uncollect uncollectible ible receivables. dentif' each. @aA :ncollectible )ccounts &6ense )ccounts eceivable-illings 45$ @bA )llowance for Doubtful )ccounts )cccounts eceivable-Lelena ) 45$ 4NS6 @a @aAA Dire Direct ct 7ri 7rite te-O -Off ff (eth (ethod od @bA )l )llo lowa wanc ncee (etho ethod d 45$ 45$ 428 Chater %+eceivables D/0 &as' O0 $%-$3 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #. Determine Determine the amount to to be added to )llowa )llowance nce for Doubtf Doubtful ul )ccount )ccountss in each each of the following cases. ndicate the ending balance balance in each case. @aA @bA Credit Credit balance balance of =4$$ in in the allowance allowance account account just rior to adjustm adjustment. ent. )nal'sis )nal'sis of accounts receivable indicates doubtful accounts of =%"5$$. Credit Credit balance balance of =4$$ in in the allowance allowance account account just rior to adjustm adjustment. ent. :ncollectible accounts are estimated at 2> of sales" which totaled =1"$$$"$$$ for the 'ear. 4NS6 @aA =%"1$$ 1$$ an and =% =%"5$$ 5$$ @bA =2 =2$" $"$$ $$$ $ and and =2 =2$" $"4$ 4$$ $ D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement %. (ega ales ales has has 9ross 9ross sales sales of =1"525"$$$. =1"525"$$$.$$. $$. Of these sales" sales" =1"1#5"$$$.$$ =1"1#5"$$$.$$ were on on accounts receivable. During the 'ear of 2$$# there were sales returns returns and allowances and sales discounts on sales made on account of =55"$$$.$$. (ega ales calculates that ! 1+2> of the eriod sales less sales returns and allowances and sales discounts will be uncollectible. Calculate the net reali;able value of sales and write the journal entr' to recogni;e the eriod e6ense of uncollectible accounts. 4NS6 *eriod credit sales =1"1#5"$$$ Eess sales returns" allowances" and discounts 55"$$$ ,et sales on account =1"12$"$$$ *ercentage estimate for uncollectibles )mount calculated to be uncollectible ! 1+2> =#2"%$$.$$ Dec 31" 2$$# :ncollectible )ccounts &6ense #2"%$$.$$ )llowance for Doubtful )ccounts D/0 Difficult O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #2"%$$.$$ Chapter 8/Receivables 8. 428 ournali;e ournali;e the followi following ng transact transactions ions using using the the allowance allowance method method of of accounting accounting for uncollectible receivables. une 1$ eceived =1"3$$ from an Downs and wrote wrote off the remainder remainder owed of =4"2$$. Oct. 11 einstated the account of an Downs and received =4"2$$ cash in full a'ment. 4NS6 une 1$ Cash 1"3$$ )llowance for Doubt btfful )ccounts 4"2$ "2$$ )ccounts eceivable-an Downs 5"5$$ Oct 11 11 1 1 )ccounts eceivable-an Downs ad Debt &6ense 4"2$$ Cash )ccounts eceivable-an Downs 4"2$$ 4"2$$ 4"2$$ D/0 &as' O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement O*0 &6amle &6ercise %-2 1$. )t the end of the current 'ear" 'ear" )ccounts )ccounts eceivable eceivable has a balance balance of =#$$"$$$G )llowan )llowance ce for Doubtful )ccounts has a credit balance of =5"5$$G and net n et sales for the 'ear total =2"5$$"$$$. ad Debt &6ense is estimated at 1+2 of 1> of net sales. Determine @aA the amount of the adjusting entr' for uncollectible accountsG @bA the adjusted balances of )ccounts eceivable" )llowance of Doubtful )ccountsG and ad Debt &6enseG and @cA the net reali;able value of accounts receivable. 4NS6 @aA =12"5$$ @=2"5$$"$$$ × .$$5A )djusted alance @bA )ccounts eceivable )llowance for Doubtful )ccounts @=5"5$$ M =12"5$$A ad Debt &6ense =#$$"$$$ 1%"$$$ 12"5$$ @cA ,et reali;able value @ =#$$"$$$ - =1%"$$$A =!%2"$$$ D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement O*0 &6amle &6ercise %-3 430 Chater %+eceivables 11. )t the end of the current 'ear" 'ear" )ccounts )ccounts eceivable eceivable has a balance balance of =8$$"$$$G )llowan )llowance ce for Doubtful )ccounts has a credit balance of =3"5$$G and net n et sales for the 'ear total =3"$$$"$$$. ad Debt &6ense is estimated at 1+2 of 1> of net sales. Determine @aA the amount of the adjusting entr' for uncollectible accountsG @bA the adjusted balances of )ccounts eceivable" )llowance of Doubtful )ccountsG and ad Debt &6enseG and @cA the net reali;able value of accounts receivable. 4NS6 @aA =15"$$$ @=3"$$$"$$$ × .$$5A )djusted alance @bA )ccounts eceivable =8$$"$$$ )llowance for Doubtful )ccounts @=3"5$$ M =15"$$$A 1%"5$$ ad Debt &6ense 15"$$$ @cA ,et reali;able value @ =8$$"$$$ - =1%"5$$A =%%1"5$$ D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement O*0 &6amle &6ercise %-3 12. )t the end of the current 'ear" 'ear" )ccounts )ccounts eceivable eceivable has a balance balance of =#$$"$$$G )llowan )llowance ce for Doubtful )ccounts has a credit balance of =5"5$$G and net n et sales for the 'ear total =2"5$$"$$$. :sing the aging method" the balance of )llowance for Doubtful )ccounts is estimated as =25"$$$. Determine @aA the amount of the adjusting entr' for uncollectible accountsG @bA the adjusted balances of )ccounts eceivable" )llowance of Doubtful )ccountsG and ad Debt &6enseG and @cA the net reali;able value of accounts receivable. 4NS6 @aA =18"5$$ @=25"$$$ -=5"5$$A )djusted alance @bA @cA ) ivoau bbletful )ccounts @=5"5$$ M =18"5$$A )cllcoowuanntscefeocreD ad Debt &6ense =#$ $""$ $$ $$ $ 25 ,et reali;able value @ =#$$"$$$ - =25"$$$A =!#5"$$$ 18"5$$ D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement O*0 &6amle &6ercise %-4 Chapter 8/Receivables 431 13. )t the end of the current 'ear" 'ear" )ccounts )ccounts eceivable eceivable has a balance balance of =%$$"$$$G )llowan )llowance ce for Doubtful )ccounts has a credit balance of =3"5$$G and net n et sales for the 'ear total =3"$$$"$$$. ad Debt &6ense is estimated at 1+2 of 1> of net sales. Determine @aA the amount of the adjusting entr' for uncollectible accountsG @bA the adjusted balances of )ccounts eceivable" )llowance of Doubtful )ccountsG and ad Debt &6enseG and @cA the net reali;able value of accounts receivable. 4NS6 @aA =15"$$$ @=3"$$$"$$$ × .$$5A )djusted alance @bA )ccounts eceivable =%$$"$$$ )llowance for Doubtful )ccounts @=3"5$$ M 15"$$$A 1%"5$$ ad Debt &6ense 15"$$$ @cA ,et reali;able value @ =%$$"$$$ - =1%"5$$A =#%1"5$$ D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement O*0 &6amle &6ercise %-3 14. )t the end of the current 'ear" 'ear" )ccounts )ccounts eceivable eceivable has a balance balance of =8$$"$$$G )llowan )llowance ce for Doubtful )ccounts has a credit balance of =3"5$$G and net n et sales for the 'ear total =3"$$$"$$$. :sing the aging method" the balance of )llowance for Doubtful )ccounts is estimated to be =35"$$$. Determine @aA the amount of the adjusting entr' for uncollectible accountsG @bA the adjusted balances of )ccounts eceivable" )llowance of Doubtful )ccountsG and ad Debt &6enseG and @cA the net reali;able value of accounts receivable. 4NS6 @aA =31"5$$ @=35"$$$ -=3"5$$A )djusted alance @bA @cA ) ivoau bbletful )ccounts @=3"5$$ M =31"5$$A )cllcoowuanntscefeocreD ad Debt &6ense =8$ $""$ $$ $$ $ 35 ,et reali;able value @ =8$$"$$$ - =35"$$$A =%!5"$$$ 31"5$$ D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement O*0 &6amle &6ercise %-4 432 Chater %+eceivables 15. (ega tamers tamers utili;es utili;es the allowance for doubtful doubtful accounts accounts method for accounts accounts receivabl receivablee that are deemed uncollectible. On December D ecember 12th it is notified b' /anc /anc' ' 7heels and ir ires es that it is submitting =2#5.$$ in settlement of its =55$.$$ outstanding accounts receivable. Due to the ownerHs failing health the coman' is closing c losing and it e6ects to ma?e no further a'ments. ournali;e this declaration. 4NS6 Dec 12th Cash 2#5.$$ )llowance for Doubtful )ccounts 2#5.$$ )ccounts eceivable - /anc' 7heels and ires 55$.$$ D/0 (oderate O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1!. On une 3$th the the coman' has a credit credit balance balance of =2#"2#5.$$ =2#"2#5.$$ in its allowance allowance for doubtful doubtful accounts. )n evaluation of accounts receivable indicates that the roer balance should be =31"$25.$$. ournali;e this recognition. 4NS6 un 3$th :ncollectible )ccounts &6ense 3"#5$.$$ for Doubtful )ccounts D/0 &as' O0 )llowance $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 3"#5$.$$ 1#. 9ood Da' ervice ervice Center Center received received a 12$-da'" 12$-da'" !> note note for =5$"$$$" =5$"$$$" dated dated )ril )ril 12 from from a customer on account. @aA @aA @bA @bA @cA Dete Determ rmin inee tthe he due due dat datee of of the the no note te.. Dete Determ rmin inee tthe he matu maturi rit' t' value value of the the not note. e. ourna ournali; li;ee the eentr ntr' ' to reco record rd the the recei receitt of the the a' a'ment ment of the the no note te at maturi maturit' t'.. 4NS6 @aA )ugu )ugust st 1$ de detterm ermine ned d as fol follows lows00 )ril (a' une ul' )ugust otal @b @bAA 1% da's @3$-12A 31 da's 3$ da's 31 da's 1$ da's 12$ da's =51" =51"$$ $$$ $ N=5 N=5$" $"$$ $$$ $ M @=5$ @=5$"$ "$$$ $$ 6 !> !> 6 @12$ @12$+3 +3!$ !$A A @cA )ug. 1$ Ca Cash ,ote eceivable nterest evenue 51"$$$ 5$"$$$ 1"$$$ Chapter 8/Receivables 433 D/0 (oderate O0 $%-$! ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement O*0 &6amle &6ercise %-5 1%. Calcul Calculate ate the the foll followi owing0 ng0 @aA @bA f the the interest interest on a note is is =5$$" the the interest interest rate rate is !> and the the time time is !$ da's" da's" what is the rincial f the the rincial rincial of a note is is =3$"$$$" =3$"$$$" the interes interestt is =5$$ =5$$ and the the time is is !$ da's" da's" what is the interest rate 4NS6 @a @aAA =5$" =5$"$$ $$$ $ @= @=5$ 5$$ $ P 3! 3!$+ $+!$ !$AA Q .$! .$! @b @bAA 1$> 1$> @=5$$ @=5$$ Q =3$" =3$"$$$ $$$AA P @3!$ @3!$+! +!$A $A R 1$> 1$> D/0 &a &as' O0 $%-$# ,)00 ))C ,) ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 18. Determine Determine the due due date and amount amount of interes interestt due at maturit' maturit' on on the foll following owing notes0 notes0 @aA @bA Origination Date (ar 1 (a' 15 /ace )mount =4"$$$ =8"$$$ erm of ,ote !$ da's 8$ da's nterest ate 8> %> (aturit' Date SSSSSSSSSS SSSSSSSSSS nterest )mount SSSSSSSSSS SSSSSSSSSS 4NS6 @aA )ril 3$G =!$ R @=4"$$$ × .$8A × @!$+3!$A @bA )ugust 13G =1%$ R @=8"$$$ × .08) × (90/360) D/0 &a &as' O0 $%-$# ,)00 ))C ,) ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 2$. ased on the the following following data data and using using a 3!5-da' 'ear" 'ear" comute comute @aA @aA the accounts accounts receivab receivable le turnover and @bA the number of da'sH d a'sH sales in receivables. he industr' average is a collection eriod of once ever' 2$ da's" and the number n umber of da'sH sales sales in receivables average 1$. @cA Comment on this situation. 12+31+$# )ccounts eceivable" net 12+31+$% )ccounts eceivable" net /or the 'ear ended 12+31+$#" net credit sales /or the 'ear ended 12+31+$%" net credit sales 4NS6 @a @aAA =1"!$ =1"!$$" $"$$$ $$$ Q N@=8 N@=8$" $"$$$ $$$ M =#$" =#$"$$$ $$$AA Q 2 2 R 2$ @bA @cA =#$"$$$ =#$"$$$ Q @=1"! @=1"!$$"$ $$"$$$ $$ Q 3!5 da'sA da'sA R 15.8# 15.8# da's da's his his situa situatio tion n is bett better er than than the the indus industr' tr' averag average. e. =8$"$$$ =#$"$$$ =1"25$"$$$ =1"!$$"$$$ 434 Chater %+eceivables D/0 (oderate O0 $%-$# ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1ROB5E 1. /or a business business that that ma?es ma?es advance rovision rovision for uncoll uncollectibl ectiblee receivabl receivables es @aA ourna ournali; li;ee the entrie entriess to record record the foll followi owing0 ng0 @1A ecord the adjusti adjusting ng entr' entr' at December December 31" the end of the fiscal fiscal 'ear" 'ear" to rovide for doubtful accounts. he accounts receivable account has a balance of =%$$"$$$" and the contra asset account before adjustment has a debit balance of =!$$. )nal'sis of the receivables receivables indicates doubtful accounts of =2$"$$$. @2A n (arch (arch of the followi following ng fiscal fiscal 'ear" 'ear" the =55$ =55$ owed b' /la?e /la?e Co. on account account is written off as uncollectible. @3A &ight months months later" later" =2$$ of the /la?e /la?e Co. Co. account account is reinstated reinstated and a'ment a'ment of that amount is received. @4A n October" October" =4$$ is received received on the the =!$$ owed b' Doe Co. Co. and the the remainder remainder @bA written offin as@aA uncollectible. asedison the data @1A above" above" what what is the net net reali;able reali;able value of of the accounts accounts receivable as reorted on the balance sheet as of December 31 )ssuming )ssuming that that the the business business had had been following following the the direct direct writewrite-off off rocedure rocedure in accounting for uncollectible receivables" journali;e the entries to record the following0 @1A ecorde ecorded d the write write-of -offf of account account of of /la?e /la?e Co. N@aA N@aA @2A above above. . @2A einstated einstated account account of /la?e Co. for for =2$$ =2$$ and recorded recorded a'ment a'ment of of that that amount received N@aA @3A above. @3A ecorded ecorded the receit receit of =4$$ from from Doe Co. in in @aA @4A ab above ove and wrote wrote off the remainder owed as uncollectible. @cA Chapter 8/Receivables 4NS6 @aA @1A @2A @3A @4A @bA @bA :ncollectible )ccounts &6ense )llowance for Doubtful )ccounts 2$"!$$ 2$"!$$ )llowance for Doubtful )ccounts )ccounts eceivable-/la?e Co 55$ )ccounts eceivable-/la?e Co )llowance for Doubtful )ccounts 2$$ 55$ 2$$ Cash Ca )ccounts eceivable-/la?e Co 2$$ Cash )llowance for Doubtful )ccounts )ccounts eceivable-Doe Co 4$$ 2$$ 2$$ !$$ =# =#%$" %$"$$ $$$ $ @=%$ @=%$$" $"$$$ $$$ - =2$"$ =2$"$$$A $$A @cA @1A @2A @3A :ncollectible )ccounts &6ense )ccounts eceivable-/la?e Co 55$ )ccounts eceivable-/la?e Co :ncollectible )ccounts &6ense 2$$ Cash )ccounts eceivable-/la?e Co 2$$ Cash 4$$ :ncollectible )ccounts &6ense )ccounts eceivable-Doe Co 2$$ D/0 (oderate O0 $%-$3 $%-$4 $%-$# ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 55$ 2$$ 2$$ !$$ 435 436 2. he aging aging of /reedom /reedom ales ales is shown shown below. below. Calculate Calculate the amount amount of each eriodi eriodicit' cit' range range that is deemed to be uncollectible. he )llowance for Doub Doubtful tful )ccounts carries a credit balance of =1"135.$$. 7rite the adjusting entr' for the end of the current 'ear. Chater %+eceivables )ge nterval0 ,ot ast due 1T3$ da's ast due0 31T!$ da's ast due0 !1T8$ da's ast due0 81T1%$ da's ast due0 1%1T3!5 da's ast due0 Over 3!5 da's ast due0 otal0 alance0 #5$"$$$ 4#"5$$ 21"#5$ 11"25$ 5"$!5 2"5$$ 1"145 %38"21$ &st :ncollectible )ccts *ercentage0 )mount0 2.5$> 5.$$> 1$.$$> 2$.$$> 3$.$$> 5$.$$> 85.$$> 4NS6 )ge nterval0 ,ot ast due 1T3$ da's ast due0 31T!$ da's ast due0 !1T8$ da's ast due0 81T1%$ da's ast due0 1%1T3!5 da's ast due0 Over 3!5 da's ast due0 otal0 Dec 31 alance0 #5$"$$$ 4#"5$$ 21"#5$ 11"25$ 5"$!5 2"5$$ 1"145 %38"21$ &st :ncollectible )ccts *ercentage0 )mount0 2.5$> 1%"#5$.$$ 5.$$> 2"3#5.$$ 1$.$$> 2"1#5.$$ 2$.$$> 2"25$.$$ 3$.$$> 1"518.5$ 5$.$$> 1"25$.$$ 85.$$> 1"$%#.#5 28"4$#.25 :ncollectible )ccounts &6ense 2%"2#2.25 )llowance for Doubtful )ccounts Calc Ca lcul ulat atio ion n of e6ens e6ense0 e0 )mo )mount unt of of calcu calcula late ted d uncoll uncollec ecti tibl blee accou account ntss Eess credit balance of account )dditional credit amount to establish calcHd value D/0 Difficult O0 $%-$4 ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 2%"2#2.25 =28"4 =28"4$# $#.25 .25 1"135.$$ =2%"2#2.25 Chapter 8/Receivables 3. 43# (r. * issued issued a 8$-da' 8$-da'"" #> note note for =2$$"$$$" =2$$"$$$" dated /ebruar /ebruar' ' 3rd to to U7V Co. on account. account. @aA Determine the due date of the note. @bA Determine the interest. @bA Determine the maturit' maturit' value of the the note. @cA ournali;e the entr' to record record the receit of the note b' U7V Co. @dA ournali;e the entr' to record the receit of a'ment of the note at maturit' b' U7V U7V Co. 4NS6 @aA (a' 4 /eb 4 - /eb 2% (arch )ril (a' @b @bAA 25 da's 31 da's 3$ da's 4 da's 8$ da's nte ntere rest st R /ace /ace )m )moun ountt @or @or ri rinci ncia alA lA P ate ate P ime ime nterest R =2$$"$$$ × .07 × 90/360 nterest R =3"5$$ W@@cA cA (atu (aturi rit' t' Ualu luee R /a /ace ce )moun mountt M nte ntere rest st (aturit' Ualue Ualue R =2$$"$$$ M 3"5$$ (aturit' Ualue R =2$3"5$$ @dA Cash 203,500 ,otes eceivable nterest evenue D/0 (o (oderate 200,000 3,500 O0 $%-$4 ,)00 ))C ,) ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 4. East Da' ervice ervice Center Center received received a 8$-da' 8$-da'"" !> !> note note for =5$"$$$" dated (arch 12 from from a customer on account. @aA @bA @c @cAA Determine the due date of the note. Deter erm mine th the m maaturit' valu alue of of th the no note. our ournal nali; i;ee the the ent entr' r' to to rec recor ord d tthe he rec recei eit t of the the a a'm 'ment ent of the the no note te at matu maturi rit' t'.. 438 Chater %+eceivables 4NS6 @aA une 1$ 1$ de determi rmined ned as as fo follows0 (arch )ril (a' une otal @bA 18 da's @31-12A 3$ da's 31 da's 1$ da's 8$ da's =5$"#5$ N=5$"$$$ M @=5$"$$$ × !> × @8$+3!$A @cAX une 1$ Cash ,ote eceivable nterest evenue D/0 (o (oderate 50,750 50,000 750 O0 $%-$! ,)00 ))C ,) ))C )nal'tic )nal'tic )C*) )C*) /,-(easurement 5. 7olfe 7olfe Coman' Coman' issued issued a !$-da'" !$-da'" %> note note for =15"$$$" =15"$$$" dated dated )ril )ril 5" 5" to Eam Eamb b Coman' on account. @a @aAA @bA @cA Dete Determ rmin inee the the due due dat datee of th thee note note.. Determ Determine ine the maturi maturit' t' value value o off the the note note.. ourna ournali; li;ee the entrie entriess to record record the foll followi owing0 ng0 @1A @1A re recei ceit t of of the the not notee b' the the a'e a'ee" e" and and @2A receit receit b' the the a'ee a'ee of the the amount amount due on the note at maturit'. maturit'. ound answers answers to the nearest =1. 4NS6 @aA une 4 @bA =15"2$$ @cA ,ote eceivable-7olfe Co )ccount eceivable-7olfe Co 15"$$$ Cash ,ote eceivable-7olfe Co nterest evenue 15"2$$ D/0 &as' O0 $%-$# ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 15"$$$ 15"$$$ 2$$ Chapter 8/Receivables !. On the basis basis of the followin following g data related related to to assets assets due within within one one 'ear for for 7al 7all' l' Co." reare a artial balance sheet in good form at December 31" 2$$5. how total current assets. Cash ,otes receivable )ccounts receivable )llowance for doubtful accounts nterest receivable =125"$$$ 5$"$$$ 2#5"$$$ 25"$$$ 1"$$$ 4NS6 7all' Co. alance heet December 31" 2$$5 )ssets Current assets0 Caash C ,otes receivable )cccounts receivable ) Eess allowance for doubtful accounts nterest receivable otal current assets =125"$$$ 5$"$$$ =2#5"$$$ 25"$$$ 25$"$$$ 1"$$$ =42!"$$$ D/0 &as' O0 $%-$# ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement #. 438 our ournal nali; i;ee the foll follow owin ing g trans transac acti tion ons0 s0 (ar.. 1 (ar (a' 3$ Dec.. 11 Dec eceiv eceived ed a 8 8$-d $-da' a'"" 1$> 1$> note note for for =3!" =3!"$$$" $$$" dated dated (arch (arch 1" from from ur?e ur?e Co. Co. on account. he he not notee of (arc (arch h 1 was was dish dishon onor ored ed.. )ccet )cceted ed =33 =33"$$ "$$$ $ in full full sett settlem lement ent of the amount amount owed owed on the note note dishonored on (a' 3$. he allowance method of accounting for uncollectible receivables is used. 440 Chater %+eceivables 4NS6 (ar. 1 ,otes eceivable )ccounts eceivable-ur?e Co. 3!"$$$.$$ 3!"$$$.$$ (a'. 3$ )ccounts eceivable-ur?e Co. ,otes eceivable nterest evenue 3!"8$$.$$ Dec. 11 33"$$$.$$ 3"8$$.$$ 3!"$$$.$$ 8$$.$$ Ca Cash )llowance for Doubtful )ccounts )ccounts eceivable-ur?e Co. 3!"8$$.$$ D/0 (oderate O0 $%-$4 $%-$# ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement %. he follow following ing are are the the current current asset assetss from from La' La' Co. Co. as of December December 31" 2$$#0 2$$#0 )ccounts eceivable 42"$$$ )llowance for Doubtful )ccounts Cash nterest eceivable (erchandise nventories ,otes eceivable 3"$$$ #4"$$$ 3"5$$ 1$4"$$$ 1$$"$$$ *reare the current asset section of the balance sheet. 4NS6 La' Co. alance heet December 31" 2$$# )ssets Current )ssets0 Cash ,otes eceivable )ccounts eceivable Eess allowance for doubtful accounts nterest eceivable (erchandise nventor' otal Current )ssets D/0 (oderate O0 $%-$# ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement = #4"$$$ 1$$"$$$ 42"$$$ 3"$$$ 38"$$$ 3"5$$ 1$4"$$$ 32$"5$$ Chapter 8/Receivables 8. 441 /or the the fiscal fiscal 'ear 'earss 2$$# an and d 2$$%" 2$$%" )C )C Co. reo reorte rted d the follo followin wing0 g0 ,et ales )ccounts eceivable Iear Ie ar &nded December 31" 2$$# 2$$% =44"123"4%! =3!"124"8!1 #48"321 #18"3!5 @aA Comute the accounts receivable turnover turnover for 2$$%. @bA Comute the number of da'sH sales in receivable at tthe he end of 2$$%. 4NS6 @aA )ccount )ccountss recei receivabl vablee turnove turnoverr R ,et ,et ales ales + )verage erage ac accou counts nts rece receiva ivable ble )ccounts receivable turnover R 3!"124"8!1 + @@#48"321M#18"3!5A+2A )ccounts receivable turnover R 48.18 @bA ,umber ,umber of da's da'sHH sales sales in recei receivabl vables es R )ccou )ccounts nts recei receivabl vable" e" end of 'ear+ 'ear+) )ve ve.. dail' sales ,umber of da'sH sales in receivables R #18"3!5+@3!"124"8!1+3!5 da'sA ,umber of da'sH sales in receivables R #.3 D/0 (oderate O0 $%-$# ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 1$. ournali;e ournali;e the follow following ing transa transactions ctions00 (ar.. 1 (ar )r. 3$ )r )r.. 3$ )r (a' 1$ eceiv eceived ed a !$ !$-da' -da'"" 1$> 1$> note note for =24"$$$ =24"$$$"" dated dated toda' toda'"" from from o' Co. Co. on account. ece eceiv ived ed amo amount unt due due on note note above above.. eceived eceived a 8$-da'" 8$-da'" 1$> 1$> note note for =4"%$$" dated )ril )ril 3$" 3$" from from ear ear Co. on account. Discounted Discounted the note note dated )ril )ril 3$ at hird hird ,atio ,ational nal an? an? at a discount discount rate rate of 1$>. 442 Chater %+eceivables 4NS6 (ar. 1 )r. 3$ )r. 3$ (a' 1$ ,otes eceivable )ccounts eceivable-o' Co 24"$$$ Cash ,otes eceivable nterest evenue 24"4$$ ,otes eceivable )ccounts eceivable-ear Cash nterest evenue ,otes eceivable 24"$$$ 24"$$$ 4$$ 4"%$$ 4"%$$ 4"%13.33 1$.33 4"%$$.$$ D/0 Difficult O0 $%-) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement 11. account. mall Co. CoOn . received =1$"$$$" =1$")shle' $$$" 12>" 8$-d a' note"the dated datnote ed October 1" from frat om 7ade 7ade Co. on the Octobera 31" Co. 8$-da' discounted at the ban? 8>. Determine items below and insert answers in the saces rovided. @aA @bA @cA @dA @eA @f @fAA Due date of note (aturit' value of note Discount eriod Discount amount *roceeds from discounting note nte ntere rest st SSSSS SSSSSSS SSSSS SSSSSS SSSSS SSSSS SSSSS SSSSS SSSS S @insert evenue or &6enseA 4NS6 @aA @bA @cA @dA @eA @fA December 3$ =1$"3$$ !$ da's =15$.$$ =1$"15$.$$ evenue =1 =15$.$$ D/0 (oderate O0 $%-) ,)00 ))C )nal'tic ,) )nal'tic )C*) )C*) /,-(easurement SSSSSSSSSS SSSSSSSSSS SSSSSSSSSS da's SSSSSSSSSS SSSSSSSSSS SSSSSSSSSS