Please solve all the MCQ with detailed answer for both correct and incorrect answers (Answers to the Self-Study Questions dare available at the end of this chapter.)1. A firm, using the allowance method of recording credit losses, wrote off a customer's accountin the amount of $500. Later, the customer paid the account. The firm reinstated the accountby means of a journal entry and then recorded the collection. What is the result of theseprocedures?a. Increases total assets by S500b. Decreases total assets by $500c. Decreases total assets by S1,000d. Has no effect on total assetsL01, 2LO22. A firm has accounts receivable of $90,000 and a debit balance of $900 in the Allowance forDoubtful Accounts. Two-thirds of the accounts receivable are current and one-third is past due.The firm estimates that two percent of the current accounts and five percent of the past dueaccounts will prove to be uncollectible. The adjusting entry to provide for the bad debts expenseunder the aging method should be for what amount?a. $2,700b. $3,600c. $1,800d. $4,5003. A firm receives a six-month note from a customer. The note has a face amount of $4,000 and aninterest rate of nine percent. What is the total amount of interest to be received?a. $1,080b. $30c. $360d. $180LO4ATRC4. A business has net sales of $60,000, a beginning balance in Accounts Receivable of $5,000, andan ending balance in Accounts Receivable of $7,000. What is the company's accounts receivableturnover?10.0b. 12.0c. 8.6d. 9.2LO5a.5. A business has an accounts receivable turnover of ten. What is the company's average collectionperiod?36.0LOSa.b.30.8c.34.6d. 36.5

Allowance method is referring to record expected bad debts that can be generated from credit revenue…

1. A firm, using the allowance method of recording credit losses, wrote off a customer's account in the amount of $500. Later, the customer paid the account. The firm reinstated the account by means of a journal entry and then recorded the collection. What is the result of these procedures? a. Increases total assets by $500 b. Decreases total assets by $500 Decreases total assets by $1,000 d. Has no effect on total assets C.

1. A firm, using the allowance method of recording credit losses, wrote off a customer's account in the amount of $500. Later, the customer paid the account. The firm reinstated the account by means of a journal entry and then recorded the collection. What is the result of these procedures? a. Increases total assets by $500 b. Decreases total assets by $500 Decreases total assets by $1,000 d. Has no effect on total assets C.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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