Question 1 of 20 0.0/ 5.0 points under the allowance method, bad debt

Question 1 of 20

0.0/ 5.0 Points

Under the allowance method, Bad Debt Expense is recorded

 

[removed]

A. as an estimate.

 

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B. when an individual account is written off.

 

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C. several times during the year as needed.

 

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D. None of the above

 

Question 2 of 20

0.0/ 5.0 Points

Which amount does not change during the period and is added to purchases when computing the cost of goods available for sale?

 

[removed]

A. Beginning inventory

 

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B. Ending inventory

 

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C. Periodic inventory

 

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D. Freight-in

 

Question 3 of 20

0.0/ 5.0 Points

Which method uses an aging of Accounts Receivable to calculate the Bad-Debts Expense?

 

[removed]

A. Income statement approach

 

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B. Balance sheet approach

 

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C. Aging the Accounts Receivable

 

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D. Direct write-off

 

Question 4 of 20

0.0/ 5.0 Points

The ending Merchandise Inventory account appears in the _______ on the worksheet.

 

[removed]

A. adjusted trial balance and balance sheet columns

 

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B. adjustment column

 

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C. adjustment, adjusted trial balance, and income statement columns

 

[removed]

D. adjustment, adjusted trial balance, and balance sheet column

 

Question 5 of 20

0.0/ 5.0 Points

When using a periodic inventory method, which account is increased when you buy merchandise inventory?

 

[removed]

A. Cost of Goods Sold

 

[removed]

B. Beginning Inventory

 

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C. Ending Inventory

 

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D. Purchases

 

Question 6 of 20

0.0/ 5.0 Points

Which of these is true about the normal balance of an income summary?

 

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A. The balance is debit.

 

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B. The balance is credit.

 

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C. The account doesn’t have a normal balance.

 

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D. It depends on which financial statement it appears.

 

Question 7 of 20

0.0/ 5.0 Points

Net realizable value can be defined as the

 

[removed]

A. Gross Accounts Receivable.

 

[removed]

B. Current Bad Debts Expense.

 

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C. amount of Accounts Receivable you don’t expect to collect.

 

[removed]

D. Gross Accounts Receivable minus the Allowance for Doubtful Accounts.

 

Question 8 of 20

5.0/ 5.0 Points

The beginning Merchandise Inventory account appears in the _______ on the worksheet.

 

[removed]

A. adjustment column

 

[removed]

B. trial balance and the balance sheet columns

 

[removed]

C. trial balance and adjustment columns

 

[removed]

D. All of the above

 

Question 9 of 20

0.0/ 5.0 Points

Indy Sport and Hobby’s Allowance for Doubtful Accounts had an unadjusted credit balance of $400. The manager estimates that $900 of the Accounts Receivable is uncollectible. Using the balance sheet approach, the year-end adjusting entry for Bad-Debts Expense includes a

 

[removed]

A. credit to the Bad-Debt Expense account for $500.

 

[removed]

B. debit to the Bad-Debts Expense account for $900.

 

[removed]

C. credit to the Bad-Debts Expense account for $1,300.

 

[removed]

D. debit to the Bad-Debts Expense account for $500.

 

Question 10 of 20

5.0/ 5.0 Points

Cost of goods sold equals

 

[removed]

A. beginning inventory + net purchases + freight-in + ending inventory.

 

[removed]

B. beginning inventory – net purchases – freight-in + ending inventory.

 

[removed]

C. beginning inventory + net purchases + freight-in – ending inventory.

 

[removed]

D. beginning inventory – net purchases + freight-in + ending inventory.

 

Question 11 of 20

5.0/ 5.0 Points

Which inventory appears in the balance sheet column of the worksheet?

 

[removed]

A. Ending inventory

 

[removed]

B. Beginning inventory

 

[removed]

C. Combination of beginning and ending inventories

 

[removed]

D. None of the above

 

Question 12 of 20

5.0/ 5.0 Points

Beginning and ending inventories for Webster’s Books are $9,000 and $6,000, respectively. The debit amounts (not including Income Summary) in the income statement columns of the worksheet total $14,000, and the credit amounts (not including Income Summary) total $15,500. The firm has a

 

[removed]

A. net income of $1,500.

 

[removed]

B. net loss of $1,500.

 

[removed]

C. net loss of $3,000.

 

[removed]

D. net income of $3,000.

 

Question 13 of 20

0.0/ 5.0 Points

At the start of the year, Northern Lights had $8,000 worth of merchandise. What do we know about Northern Lights?

 

[removed]

A. It’s a service business.

 

[removed]

B. It’s a retail business.

 

[removed]

C. The company ended with a net income last year.

 

[removed]

D. The company ended with a net loss last year.

 

Question 14 of 20

5.0/ 5.0 Points

Which type of account is an Allowance for Doubtful Accounts?

 

[removed]

A. Asset

 

[removed]

B. Contra-asset

 

[removed]

C. Revenue

 

[removed]

D. Contra-revenue

 

Question 15 of 20

0.0/ 5.0 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?

 

[removed]

A. $3,000

 

[removed]

B. $600

 

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C. $2,400

 

[removed]

D. $3,600

 

Question 16 of 20

0.0/ 5.0 Points

Harry’s Hardware estimates that approximately $1.75 out of every $100 of credit sales proves to be uncollectible. Barber calculates Bad-Debts Expense using the

 

[removed]

A. income statement approach.

 

[removed]

B. direct write-off method.

 

[removed]

C. balance sheet approach.

 

[removed]

D. aging the Accounts Receivable approach.

 

Question 17 of 20

0.0/ 5.0 Points

On December 31, 2012, Brooke’s Horse Stable’s 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 includes a

 

[removed]

A. debit to the Allowance account for $568.

 

[removed]

B. credit to the Allowance account for $42.

 

[removed]

C. debit to the Allowance account for $822.

 

[removed]

D. credit to the Allowance account for $1,432.

 

Question 18 of 20

0.0/ 5.0 Points

An account never used in a service business is

 

[removed]

A. Consulting Fees-Revenue.

 

[removed]

B. Interest Payable.

 

[removed]

C. Merchandise Inventory.

 

[removed]

D. Accumulated Depreciation–Equipment.

 

Question 19 of 20

0.0/ 5.0 Points

Fit City estimates it will collect $2,300 of the $2,425 owed by customers. The difference of $125 represents the

 

[removed]

A. Gross Accounts Receivable.

 

[removed]

B. Allowance for Doubtful Accounts.

 

[removed]

C. Net Realizable Value.

 

[removed]

D. Value of the Current Unpaid Receivables.

 

Question 20 of 20

0.0/ 5.0 Points

Beginning merchandise inventory would be found on the worksheet in the

 

[removed]

A. income statement debit column.

 

[removed]

B. income statement credit column.

 

[removed]

C. balance sheet debit column.

 

[removed]

D. balance sheet credit column.

 
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